Ministers are urged to end the “postcode lottery” in the water sector through a uniform social tariff | Water industry
Ministers are under pressure to end the ‘postcode lottery’ for water by introducing a single social tariff for low-income households amid growing evidence that consumers are struggling to pay their bills.
Water companies in England and Wales offer their own social tariffs that provide discounts to low-income consumers. However, some of these tariffs are more generous than others, leading to large differences in the amounts consumers pay in different regions.
Activists argue that a central funding pool into which all water companies pay would help more people.
In a letter to water and floods minister Emma Hardy, seen by the Guardian, 14 charities said the new government had a “huge opportunity” to help people in poverty with their water costs.
The charities, including Independent Age, Money Advice Trust, Parkinson’s UK and Age UK, said such an initiative would “make a tangible positive difference to the lives of people of all ages on low incomes”.
They write: “A uniform social tariff for water would be a simple way to provide fair and consistent support to people in financial difficulty. It would help ensure that more people have access to the water they need without having to make extreme sacrifices.”
The Guardian reported last year that politicians under the previous Conservative government were positive about the idea of a single social tariff, but abandoned it after examining the issue in detail.
It is said that representatives of the water industry have now raised the idea with the Department for Environment, Food and Agriculture (Defra) and discussions are ongoing.
The water industry is facing massive criticism for its wastewater disposal, its debt, the salaries of its executives and a lack of investment.
According to sources, some companies had previously opposed a single social tariff because it would mean de facto subsidising companies in other regions that would need to make larger investments.
A study conducted by YouGov for Independent Age found that in England, 38 percent of over-65s with household incomes below £15,000 struggle to pay their water bills. In Wales, the figure was 29 percent.
Val Thomas, 77, from Essex, said she had reduced her water consumption. “I am so concerned about water consumption now, even though it is important for my health to maintain good hygiene, that I have reduced my water consumption a lot,” she said. “I only shower every other day and never use my bath.”
Activists had hoped that a uniform social tariff could be worked out before the water industry’s next price review period, which runs from 2025 to 2030.
However, applications for this review have already been submitted and last month the water regulator Ofwat provisionally stated that average water bills would rise by 21 percent over the next five years from April 2025.
Joanna Elson, chief executive of Independent Age, said: “We regularly hear of older people doing less washing and doing less laundry to reduce their bills to a more affordable level. That is not the age any of us would want to live to.”
“We call on the new UK government to take swift action to end the unfair postcode lottery by introducing a single social tariff for England and Wales. An address should not affect how much support someone in financial difficulty receives for their water bill.”
Separately, research by Citizens Advice found that up to a quarter of the UK population believe they may have to turn off their heating and hot water this winter due to rising energy costs. This rises to 31 percent for households with children and 39 percent for those on low incomes, the survey found.
Energy regulator Ofgem is expected to announce on Friday that energy bills across the UK will rise by 9% to an average of £1,714 a year from October.
Defra said: “We expect water companies to offer comprehensive support measures to customers who are struggling to pay their bills, including bill discount schemes and financial assistance plans.
“For far too long, investments have not kept pace with the challenges of an ageing infrastructure system, a rapidly growing population and climate change. It is not fair that customers have to bear the consequences of years of mismanagement.”