Water bills will not have to rise to pay for flood costs, the industry regulator promised yesterday. Ofwat chairman Philip Fletcher said that, unless there were “exceptional circumstances” involving new obligations, current price plans would remain untouched until 2010. His declaration follows warnings from Lady Young, chairman of the Environment Agency, that bills would have to rise to cover flood costs. He refused to comment on Lady Young’s statement at the weekend, but Ofwat points out that Hilary Benn, the Environment Secretary, has said the Government will meet the cost of improvements in flood defences. There may be little comfort in Mr Benn’s commitment since the growing flood costs will have to be met by taxpayers, but Mr Fletcher is anxious to avoid becoming embroiled in a tug of war over further price rises when the wider issues linked to flood defences and climate change will form part of the official inquiry into the flooding. Water companies were also surprised at Lady Young’s statement. One executive said: “She isn’t running the industry.” A spokesman for Water UK, the industry body, said: “We are very involved in terms of responsibilities for safeguarding water and sewage services but the issue of flood defences isn’t directly linked to water bills.” Consumers are already facing average increases of 18pc before inflation in the five years up to 2010. The extra money is helping to finance a £17bn investment programme, which will include replacing old water and sewage mains and reducing leakages. Spending in the first year lagged behind Ofwat targets but investment has speeded up over the past year and both Ofwat and Water UK are confident the five-year total of £8.4bn earmarked for infrastructure spending will be achieved. The industry says the improvements would have started earlier but for the EU-led programme to improve water quality, including bathing water. Water companies, alerted by the supply disruption to hundreds of thousands of homes in Gloucestershire and flooding risks at sewage plants, have been checking defences at installations around the country to see whether they need strengthening.

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