AS the saying goes, what is seldom is wonderful and into this category, surely, must go the prospect of householders actually seeing their water bills go down - for the first time since privatisation.

For the call today by the industry's regulator, Ofwat, for a 14 per cent cut in water prices over the next five years - though the actual level will not be agreed until November - promises to bring down customers' bills by an average of £40.

The consumers' delight, however, must be tempered by the contrast with which they have gone up over the past 10 years - by three times faster than the rate of inflation and, on average, from £118 a year to £255.

If it has taken regulators all this time to win a round in their bout with this unloved fat cat industry, the conclusion can only be that it is long overdue.

Not only that, set against the record of the water companies' profit gushers and the shareholders' dividend deluge over this period, the question that is begged by this departure - even in the light of the scandal of government approval in the post-privatisation years of higher-than-inflation charges that swelled the companies' coffers - is: why has it taken so long to get some action on water prices?

But, even now, it is risky to applaud the prospect of cuts - when we await the water industry's response to Ofwat's proposals on charges over the next five years and when, only last month, we had North West Water implying, with apparent concurrence from the regulator's regional arm, that its bills could actually go up by a third more over that period if the company was made to go at its programme to clean up beaches and rivers at the pace it has been set by the government. And, indeed, in tune with this, we see the National Consumer Council looking askance at these cuts, warning that though bills may go down next year, they could shoot back up afterwards if Ofwat caves in to the industry's claims that it cannot afford further cuts in charges as well as the cost of meeting its environmental obligations.

But how about shareholders taking on more of that expense and customers having a much stronger guarantee of lower bills? Will the regulator pursue that line?

For while the dividend deluge has gone on and on and bills have rocketed up and up, it seems to have been a strategy that has seldom been employed and it would be wonderful if it was. And there is scope for shareholders, rather than consumers, to take a smaller cut so that consumers can have fairer prices - as we saw when the prospect of windfall taxes panicked the industry into giving money back to customers.

It has been milked since privatisation and the time has come for it to be stopped by much more rigorous regulation.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.