Households will continue to face rising water bills, but increases will be ‘small and steady’, the Environment Minister has said.
Steve Reed is expected to set out plans for a major reform of the water sector tomorrow, which will tackle sewage spills, invest in water infrastructure and abolish the industry’s beleaguered regulator Ofwat.
It comes as ministers seek to avoid a repeat of this year’s 26% increase in bills.
But while Mr Reed has promised that families will never again see ‘huge shock hikes’ to their bills, he was unable to rule out further above-inflation increases.
He told Sky News’s Sunday Morning With Trevor Phillips that bills should be ‘as low as possible’, he added that there needed to be ‘appropriate bill rises’ to secure investment.
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He said: ‘A small, steady increase in bills is what people expect.’
Asked about the possibility of expanding social tariffs to help households struggling with bills – a move that could see wealthier families pay more – Mr Reed said he had ‘not been convinced yet’ that this was necessary.
Mr Reed has also pledged to halve sewage pollution in England by 2030, after the Environment Agency said serious pollution incidents had risen by 60% in 2024.
He also suggested to the BBC that he would resign if the 2030 target was not achieved, provided he was still in the same job by then.
His comments come before a major report by former Bank of England deputy governor Sir Jon Cunliffe, which is expected to recommend sweeping reform to water regulation on Monday.
Sir Jon has been widely reported to be preparing to recommend the abolition of Ofwat, which has faced criticism over its handling of sewage spills and allowing water companies to pay large dividends while taking on significant debt and missing targets for investing in infrastructure.
On Sunday, Mr Reed would not say whether he would scrap Ofwat, but also declined to say he had confidence in the regulator.
He told the BBC’s Sunday With Laura Kuenssberg: ‘The regulator is clearly failing.’
MP Victoria Atkins, Shadow Secretary of State for Environment, Food and Rural Affairs, said: ‘After years of underperformance across the water industry, no one is pretending the situation is simple and we acknowledge more should have been done when we were in government. But honesty matters now more than ever.
‘This morning, Steve Reed made sweeping claims about investment and reform without addressing the practical costs or consequences for households.
‘Fixing the water system requires serious long-term work, which includes dealing with pollution, improving resilience, and restoring public confidence. We will engage constructively where there’s common ground, but we won’t let Labour duck accountability for the choices they’re making now.’
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