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by Karma Loveday

CCW slams Ofwat’s Covid price cap rise for protecting retailers more than customers

Consumer watchdog, CCW, has criticised Ofwat’s decision to temporarily increase retail prices for business customers to help recover bad debt costs linked to Covid. It argued wholesalers should take a share of the burden, and that protecting retailers has taken precedence over protecting customers.


Ofwat has ruled price caps in the business retail market can go up by 0.49% for two years from April 2022. This will enable retailers to share some of the unexpected bad debt costs that have arisen due to the Covid-19 pandemic with business customers. The rise is higher than the 0.31% consulted on in December. Ofwat explained the number now incorporates a proportion of bad debt costs reported by retailers during 2019/20.


Senior policy manager at CCW, Christina Blackwell, said: “This increase in the price caps will put a disproportionate burden on business customers at a time when many are still recovering from the impact of Covid-19. We believe the debt costs should be shared equally across customers, retailers, and wholesalers to avoid unfairly penalising business customers – many of whom are still not enjoying a positive experience of the retail water market.”


She added: “Systemic retailer failure would be undesirable, but protecting retailers appears to have taken precedence over alleviating the pressure on business customers, most of whom will not enjoy the same protection in their own sectors that water retailers are being given.”


The increases will affect non household customers who use less than 50 Ml of water a year and who have not contracted with a retailer.


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