Workmen digging around pipes
Media playback is unsupported on your device
Video

Why Thames Water wants higher bills

Thames Water has explained why it wants to increase customer bills - and why it cannot make shareholders absorb more costs.

Thames Water has asked its regulator, Ofwat, for permission to raise prices.

It wants to put up bills by about £29 per household during 2014-15, but has asked Ofwat if it can spread the rise over more than one year.

Thames water's external affairs director Richard Aylard told BBC News that the increase was needed because of the cost of buying "very expensive land in London" to build a major new sewer.

He also said that the company needed to pay dividends to shareholders as the majority were pension funds which relied on the income.

Another problem particular to Thames Water, he said, was bad debt which he blamed on London's transient population "most of whom can afford to pay their bills, but we can't chase them".

Ofwat will examine the proposal and make a decision in three months.