Poorer households could get a helping hand with their water bills under new government guidance published today.
After consulting on the plans, Defra has laid out guidance for new “social tariffs” – which give water companies room to introduce new lower tariffs for customers who are struggling to pay their bills.
An estimated 2.4 million households have difficulties meeting the costs of their water bills, according to Defra.
At the moment, water firms are bound by Ofwat’s licensing conditions leaving them unable to cut bills, fearing that it would contravene the law.
Deputy Prime Minister Nick Clegg announced the plans from the Rio+20 Conference in Brazil.
He said: “We’re clearing the way for water companies to give some much needed help to the millions of people who struggle to pay their water bills. If you’re struggling to make ends meet, not paying for essential utilities isn’t an option but it can mean making tough choices elsewhere – like sacrificing healthy meals for the family or new school books.
“Water companies can now begin to consult their customers on how to ensure the most vulnerable households receive extra support.”
The rule change does not means firms have to bring in social tariffs. Defra says this is because water prices vary across the country, with households in the south of England often paying more than those in the north. The average water bill in the UK is £1 a day but people in the south west pay a lot more.
A spokesman for Defra told ELN: “We’re clear we want them to introduce them but it is up to water companies. Some of the smaller water companies may not need to introduce them.”
Defra couldn’t say what the subsidy will be, so it is unclear what sort of help customers will receive.
Further reforms to the water industry will be proposed by the Government later this summer in the new Water Bill.