Shipley MP Chris Leslie today demanded a clampdown on powerful water companies after Yorkshire Water announced it was spending £276 million buying an American firm.

YW unveiled the deal to buy the US water supplier and plans for a new name, reflecting the company's growth away from its home county. It also announced a rise in profits, from £205m to £221m.

The group is buying Aquarion, a water supplier to parts of Connecticut and Long Island in New York, as the latest stage in its move to become a diverse, international company.

It is also changing the name of its holding company to Kelda Group, although its subsidiary waste and water business will still be known as Yorkshire Water Services.

Mr Leslie said: "I have already been in strenuous discussions with the chief executive of 'Kelda Group' Dr Kevin Bond about the company's profit and dividend strategy At the end of the day the Kelda Group will be making most of its profit off the backs of the ordinary population of this region, who have no choice at all but to purchase their product.

"Much greater attention needs to be paid to how much profit is being creamed off from the customer and for what purpose it is going towards.

"Too much money is leaking out of Yorkshire Water, the subsidiary, and going towards the Kelda Group, its expensive acquisitions and its shareholders. Profit should be used to improve the environment, or reduce customers' bills."

A YW spokesman said the company was already committed to investing £1.9 billion over the next five years in improvements to the water system in Yorkshire. Acquiring the American firm could help because the firm could learn from best practice there.

Chief executive Dr Kevin Bond said he planned to have non-regulated business expand to take up about 50 per cent of the group's turnover and 30 per cent of profits in the next six years.

Currently non-regulated operations make up around 15 per cent of turnover and less than ten per cent of profits. Revenues increased last year after bills were raised by 7.6 per cent last April (an average of around £23 on a household's annual bill).

Penny Ward, of the Water Watch group and the Aire Valley Conservation Society, said: "I would want to know where the money is coming from for this. It's our money, consumers' money, and it's sad that YW has departed from its initial job.

"It's strange that they are changing the name - it makes me wonder what they are ashamed of."

Pete Bowler, another Water Watch campaigner, added: "Yorkshire Water should be focusing on providing YW customers with the best service. Diversifying is a risk."

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