'Social tariffs' proposal to help poorer residents could see £8 on water bills

HOUSEHOLDERS in South Devon face having more than an extra £8 slapped on their water bills under a government move to provide discounts for poorer residents.

The suggested levy would threaten to strip out a chunk of the £50 rebate being offered to every household in recognition of the underlying 'unfairness' of South West Water bills which are the highest in the country.

It comes as the Government published guidance paving the way for water companies to be able to cut bills for the most vulnerable customers.

However, these so-called social tariffs will have to be paid for by other South West Water customers.

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And this is acknowledged by the water firm which has said any scheme would '…need to balance the desire to help individuals who have difficulty paying their bills with the interests of all our customers'.

The Government rejected calls for a national cross-subsidy scheme, which would have spread the financial burden across the country.

This could have actually seen bills reduced as there is a greater need for assistance in the South West Water area due to higher charges.

In its guidance document to water companies, the Government says a charge of up to 1.5 per cent on the average bill would be a 'reasonable amount' for other householders not benefiting to pay for the discount scheme.

Based on the current average South West Water charge of £543, this would equate to an extra £8.14 on bills. The average water bill in England and Wales is £376.

The official guidance goes on: "This amount applies solely to the cross-subsidies of the social tariff and it excludes the costs of Watersure (an existing hardship scheme). This figure is offered as a broad indicator rather than a cap."

Environment Secretary Caroline Spelman said: "Many people on low incomes have been struggling to pay their water bills, and these new measures will give them much-needed help."

Lib Dem MP for Torbay Adrian Sanders said: "It sadly isn't a nationally pooled scheme whereby the South West would be a net beneficiary. It's an opportunity missed to build a fairer system."

Pointing to a package of help already in place to help customers, a spokesman for South West Water said: "We are already looking at several options for a new company social tariff, but we will need to examine the practicality of each with different groups of customers to help choose a model which will work in the long term.

"We also need to balance the desire to help individuals who have difficulty paying their bills with the interests of all our customers.

"Before we implement any new tariff we will consult a wide range of our customers and stakeholders on our proposals and take their feedback into account."