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Water poverty in the UK as rates increase, the recession hits

The Times UK reports that, “Ministers are considering setting up a £500m fund to support the growing number of households that are suffering from ‘water poverty’. The condition — defined as when water bills make up more than 3% of household spending — has been largely ignored until recently.”

“The number of people unable or unwilling to pay has soared to record levels during the recession…”

“Last year the value of bills more than a year in arrears jumped 16% to £804m. The value of bills more than three months late rose to £1.4 billion.”

“Thames Water, Britain’s biggest water company, has seen the number of late payers leap from 900,000 last year to 1.6m this year.”

They add, “The problem has been building up for 20 years. Since the industry was privatised in 1989, bills have increased by 42% after inflation.”

While the newspaper notes that these rate increases have helped fund infrastructure upgrades, The Daily Mail stated in July 1994 that, “The water industry has become the biggest rip-off in Britain. Water bills, both to households and industry, have soared. And the directors and shareholders of Britain’s top ten water companies have been able to use their position as monopoly suppliers to pull off the greatest act of licensed robbery in our history.”

Public Citizen has reported that, “On average, prices rose by over 50% in the first 4 years (after Margaret Thatcher privatized the ten regional water authorities)… The real value of the fees, salaries and bonuses paid to the director’s increased between 50% and 200% in most water companies…The profits of the 10 water companies rose 147% between 1990 and 1997…(and) the disconnection rate tripled in the first five years, with 18,636 households disconnected in 1994…”

The Ontario Teachers Pension Plan owns 27 percent of Northumbrian Water, which sells water services to 3.3 million people in the United Kingdom. In its last six-month reporting period, Northumbrian posted a $148-million profit.

The Canada Pension Plan owns one-third of Anglian Water Services, which sells water services to approximately six million people in the UK. In 2009, Anglian Water posted £317.3 million in profit for the financial year.

The full Times UK article is at http://business.timesonline.co.uk/tol/business/industry_sectors/utilities/article7086779.ece.