Question to the Department for Environment, Food and Rural Affairs:

To ask Her Majesty’s Government what discussions they have had with Ofwat concerning the profits made by water companies between 2010 and 2015.

The Government has regular discussions with Ofwat about its strategic priorities and objectives for regulation of the water sector.

Ofwat sets price controls independently of Government. This independence is crucial to ensure stable economic regulation which keeps investment costs down and customer bills low.

In 2009, Ofwat set price controls for the period from 2010 to 2015. During this period water companies benefited from several factors outside their control, including low taxation and low borrowing costs. In March 2013, Ofwat challenged companies to share gains with their customers. The then Secretary of State wrote to companies in November 2013 in support of Ofwat’s drive. As a result, companies absorbed costs and provided water bill discounts worth £435 million over this period.

In 2014, Ofwat delivered a tough price review which means that bills will fall by around 5% in real terms from 2015 to 2020.