Single social water tariff ‘ought to be non-negotiable’

Implementing a single social water tariff “ought to be non-negotiable”, Lord Godfrey Cromwell of the Industry and Regulators committee told Utility Week following the publication of the Lords’ report into water regulation.

The Affluent and the Effluent, published Wednesday (21 March), recommends government to introduce a social tariff to address water poverty while allowing essential investment to go ahead.

Cromwell said that not doing so would effectively force people into water poverty.

“What’s the alternative? Tell people they can’t have water?” Cromwell said. “The alternative is to turn off people’s taps and we can’t do that. In a civilised society we have to be able to supply the vulnerable with water through a social tariff.”

Proposals for a single social tariff have gained widespread support during the last two years, however environment secretary Therese Coffey previously dismissed it, which was noted in the report.

Cromwell also stressed the amount of investment required to bring water infrastructure up to the necessary standards to meet social and environmental needs should be raised outside of price controls through equity and debt, rather than burdening customers.

“Customers would be up in arms about why it’s taken companies so long, and [asking why] don’t they have the money already?”

Following decades of successive governments and regulators focusing on water supply at the detriment of the environment, Cromwell said: “We need a long-term strategy, a joined up approach across the regulators and given clear and prioritised objectives.

“To date they’ve prioritised water, they haven’t given sufficient weight to the environment, which is changing, but they’ve got to do both.”

He said government has “given every appearance” of listening to recommendations, but needs a forward-looking national strategy to avoid future water shortages.

Cromwell said of Ofwat’s announcement this week to change company licences that executive pay and bonuses was “only a tiny drop in the ocean of the problem really” and restricting bonuses was “hardly new or controversial”.

“The real issue is the massive scale of investment needed to put [things] right over time,” he said.

This includes the estimated £56 billion set out on the storm overflows reduction plan as well as spending for the Water Industry National Environment Plan (WINEP).

“Victorians faced with cholera had the vision, the expertise and the money to go out and do massive infrastructure projects we still use today. We need that sort of vision again today, which will take a long time to catch up, but before you start you don’t get to the end of it.”