Middle-class families could be forced to pay higher water bills to subsidise huge discounts for poorer households under a new Government scheme, according to reports. Plans for a nationwide social tariff on water will be presented to Keir Starmer as part of an industry-wide review on Monday, including a move to cut costs for poorer families, The Telegraph reports. While details on where the money would be recouped have not been confirmed, it would likely be found by increasing bills for other customers.
People across Britain are already paying high amounts for their water, with costs rising by an average of 26% in April, primarily linked to the prices of repairing long-neglected infrastructure. “Families across middle England face soaring water bills under the Labour Government, thanks to the triple whammy of above-inflation hikes, higher tariffs on multi-person households, and robbing Peter to pay Paul to fund tariffs for those on welfare benefits,” Shadow Housing Secretary Kevin Hollinrake said.
“This is on top of council tax bills going through the roof, and pay packets being squeezed due to Labour’s job tax,” he added.
“We can’t just keep increasing taxes and charges – record taxes are already making life too hard for people. The Government should be standing up for the makers, not the takers.”
The nationwide subsidy would replace a raft of schemes already enforced by suppliers, with proponents suggesting it could cut water bills for up to two million people.
Similar proposals were considered and ultimately rejected by the previous Conservative Government, however, on the grounds that hiking costs for middle class households would be unpopular with voters.
Environment Secretary Steve Reed is expected to pledge a complete overhaul of the water industry next week, including through investment in sewage networks and a rumoured abolition of regulator Ofwat.
Interim findings by Sir Jon Cunliffe, a former deputy governor of the Bank of England, whose full report on reform of the sector will be published on Monday, recommended proposals aimed to “strengthen” the social tariffs system and “tailor water bills to better reflect household consumption”.
The report found that existing inconsistent support meant “people in similar circumstances receiving significantly different levels of support, depending on what part of the country they live in”.
Responding to the findings, Mr Reed is expected to say: “Regulation has failed customers and the environment. We will introduce root and branch reform, so hard-working British families will never again face huge shock hikes to their bills like we saw last year.”