Water firms are drinking in the last-chance saloon

Inside Business: Only three in 17 had their business plans approved by watchdog Ofwat as Labour reiterated its pledge to nationalise the industry

The regulator is imposing a hosepipe ban on the money flowing into shareholders’ pockets (Getty)

The privatised water industry of England and Wales is facing quite the squeeze. Regulator Ofwat has demanded a £50 average reduction in bills at the same time as ordering water companies to put more money into investment and to do a better job of cutting leaks and pollution.

It wants incidences of the latter to fall by more than a third, supply interruptions to fall by almost two-thirds, and more efforts to be made to encourage people to use less of a resource that is becoming increasingly precious as climate change marches on.

Good news? Surely, although it does once again raise the question of why it’s taken so long to get to this point and why the industry was allowed to borrow so much (£51bn) and pay out so much in dividends (£56bn) as water was pouring into the streets of England and Wales and sewage was mucking up the environment.