Yorkshire Water investors lose out as price hikes cut for the next six years

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YORKSHIRE Water said investors can expect no more than flat profits for the next six years following the move to cancel future bill increases.

The warning follows the decision to raise bills by inflation only until 2020 as the water industry bows to pressure to keep prices down.

In the six months to September 30, the water firm’s pre-tax profits rose 16 per cent to £89.2m following previous price increases, but following the decision to raise prices by inflation only, such hikes will become a thing of the past.

Water watchdog Ofwat is taking a tough line on tariffs and refused an application for an additional price increase asked for by Thames Water.

Ofwat chairman Jonson Cox recently wrote to all water companies asking them to consider whether they needed to increase their bills for 2014/15 by the full amount set out in the last price review, given the squeeze on household incomes. The price limits follow an outcry that Yorkshire Water paid no corporation tax last year.

Yorkshire Water’s chief executive Richard Flint said the firm works to the letter of the law and as a result of its tax efficiencies, customers pay £10 less a year.

The firm, which has five million customers, said it is planning to invest more than £3.8bn between 2015 and 2020 on a range of improvements.