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CMA bows to industry pressure at expense of consumers says Citizens Advice

29 Medi 2020

Citizens Advice reacts to the Competition and Market Authority’s (CMA’s) initial findings on the water industry’s appeal against the latest price control.

Dame Gillian Guy, Chief Executive of Citizens Advice, said:

“We’re disappointed the CMA’s initial findings are not recommending a better deal for customers - particularly at a time when so many people are struggling financially.

“Supplying an essential service shouldn’t be a one way street. The profits of these monopoly companies must be balanced by a fair deal for the general public. 

“When the expected cost of maintaining industry infrastructure is set unrealistically high, bills are inflated unnecessarily.

“We call on the CMA to look again at all the evidence before it makes a final decision.”

Background:

Today’s announcement of initial findings is expected to be followed by a final ruling by the end of the year. 

Our analysis showed Ofwat’s data was still too generous to the water network companies and their calculations would have led to an excess profit of £3 billion over the course of the next eight-year price control.

In evidence supplied to the CMA for use in considering this appeal by the water companies, Citizens Advice argued that the outcome should set a precedent for a better deal for customers which still allows the water network companies to make a profit and attract investors.

Our Monopoly Money report last year found that the energy, water, broadband and telephone networks had overcharged people a total £24.1 billion over the last 15 years of price controls. This was because the cost of capital (the investment needed to maintain the pipes and wires infrastructure) was set too high.

In its Excess Debt report last month, Citizens Advice showed one in 9 people, the equivalent of 6 million people across the UK, have reported falling behind on household bills because of coronavirus.

Notes to editors

  1. Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
  2. Citizens Advice is the statutory consumer advocate for energy and post. We provide supplier performance information to consumers and policy analysis to decision makers.
  3. The Citizens Advice Witness Service provides free, independent support for prosecution and defence witnesses in every criminal court in England and Wales.
  4. Citizens Advice offers Pension Wise services at 500 locations in England and Wales.
  5. Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  6. To get advice online or find your local Citizens Advice, visit citizensadvice.org.uk
  7. For consumer advice, call the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 to talk in Welsh.
  8. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
  9. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.