WHOOPEE. Water bills in York are to be slashed by 15 per cent from next April. Good news, eh?

Well, yes, it is. Except that the cuts won't be quite as big as you think, not everyone in York will benefit - and anyway, all Yorkshire Water are doing is honouring a commitment made to the Government and the people of York four years ago.

Those price cuts, first. Your Yorkshire Water bill comes in two parts: one for supply of clean water, and one for sewerage costs. The 15 per cent cut applies only to the clean water element of your bill - not to the sewerage element. At the moment, the average householder in York pays £94-a- year for their clean water; from April next year that will fall to just £80. The amount you pay for sewerage, however, will go up, from £117 now to £123. Overall, as a result of the changes, the average householder in York will see their water and sewerage bill reduced from £211 now, to £203 from April 1. That is a reduction: but a reduction of only four per cent, not 15.

Not every house in York will benefit from the cut, however. Only people living in homes that were formerly supplied by independent local company York Waterworks will enjoy the cheaper water. Homes built since that company was taken over by Yorkshire Water, in 1999, will not.

It is still good news, if you live in the right part of York. Even better news, however, is the fact that Yorkshire Water is committed to keeping water bills in York low when compared with the rest of Yorkshire.

From next April, people living elsewhere in Yorkshire will be paying on average £237 for their water and sewerage, compared with York's £203. That means York water bills will be about 14 per cent lower than those for the rest of Yorkshire.

Over the five years from 2005 to 2010, water and sewerage bills across the region will rise steadily by 3.6 per cent a year, on top of inflation - but the price differential between York and the rest of Yorkshire will remain. "York had always historically enjoyed cheaper water bills," a Yorkshire Water spokesman confirmed. "We undertook to continue that."

What that means is that, whatever people in Yorkshire at large are paying for their water by 2010 - it will depend on the rate of inflation, among other things - Yorkshire Water's 79,000 customers in York who were formerly supplied by York Waterworks, should still be paying significantly less.

The reason for this is, as the company's spokesman suggested, historical. Until 1999, while Yorkshire Water was responsible for York's sewage service, clean water in York was supplied by York Waterworks. Because in York there was a plentiful supply of water available locally from the River Ouse, it was comparatively cheap to supply. Yorkshire Water, by contrast, had to supply a much wider region - and the cost of piping water to homes over a widespread area was more expensive than simply supplying local York people from a York water supply. The upshot was that people in York paid on average 16 per cent less for their water than customers elsewhere in Yorkshire.

In 1999, Yorkshire Water decided it wanted to take over York Waterworks. York's MP, Hugh Bayley, called for the takeover to be referred to the Monopolies and Mergers Commission, warning it could lead to higher prices for York customers. The takeover was eventually permitted - but only after Yorkshire Water had agreed that the price differential between York Waterworks customers and those in the rest of Yorkshire would remain and that, by April 2004, there would be a sweetener in the form of a 15 per cent cut in the water element of York's water and sewerage bills. That promised 15 per cent cut was, in effect, compensation to the people of York for the loss of a small, independent company which, by providing competition for Yorkshire Water, had helped to keep water prices lower for everyone. It is that cut that Yorkshire Water will be implementing for all homes formerly supplied by York Waterworks from next April.

So, in terms of water prices at least, people in York (most of them) are lucky that they live on a river like the Ouse - and lucky that, historically, their water was supplied by a local, independent company.

But is it fair that most of York should continue to enjoy such comparatively cheap water, now our water is supplied by the same organisation that supplies the rest of Yorkshire? Mr Bayley thinks it is.

"We in York had had a very effective local water company for 200 years," says Hugh Bayley. "There was an argument that it should be taken over by a larger monopoly, and I think it was perfectly reasonable for people in York to say that that monopoly should not use its monopoly power to raise prices. I wanted to make sure that York householders would not suffer as a result."

What's more, it is important water users in York remember why they have such cheap water, he adds. "The public need to be aware that this commitment was given, so that they can be ready to cry foul if at any time Ofwat or Yorkshire Water start saying it is time to standardise prices," he says.

Updated: 09:10 Thursday, September 04, 2003