The FSB is calling for help for small businesses

The Federation of Small Businesses (FSB) said action should be taken to reduce proposed average rises, which it says mean a 29% hike for its members.

The FSB says guest houses, farms and smaller firms face average rises of �1,160 a year under planned increases.

Water companies say rises are needed to replace ageing pipes, improve quality and comply with environmental laws.

'Difficult to stomach'

But the FSB says action should be taken to reduce the proposed rises, which industry regulator, Ofwat, is due to give its view on later this week.

"Although as a percentage of annual turnover these amounts may not be huge, the massive price hikes will still be difficult to stomach," said FSB environment chairman, John Holbrow.

"Small firms need to carefully budget their outgoings and rely on predictable and stable utility services.

"Moreover, there are large numbers of small firms, such as laundrettes, farmers and restaurants that are high users of water, yet do not have access to the block tariffs afforded to big companies."

The steepest proposed increase in water bills is 45% in Southern Water, while the lowest is 17% in Anglian Water.

Customers compensated

Last month consumer group Watervoice said complaints about water firms were at their highest level for five years.

Watervoice received 12,293 complaints in the past year, a 27% increase on the figure for 2002-03.

The watchdog said most complaints had related to price rises but there were also more problems with water supply and bill administration.

Watervoice added that they managed to secure �776,705 in compensation for wronged consumers.

Recently, Watervoice called on the industry regulator Ofwat to stop water firms from increasing bills by �70 on average between 2005 and 2010.