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Labour to target those who refuse to pay water bill

By Western Morning News  |  Posted: October 02, 2012

  • 'Labour would force all water companies to offer social tariffs' Mary Creagh

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Graeme Demianyk hears Shadow Environment Secretary Mary Creagh’s plans to get tough with water bill dodgers.

Labour has promised a crackdown on water bill dodgers to fund a discount for the poorest families, conference has heard.

Mary Creagh, Shadow Environment Secretary, said a Labour government would attempt to claw back the £15-a-year added to every household's water charge by those refusing to pay.

The money would then be used to underwrite a cut for hard-pressed bill payers under so-called "social tariffs".

She went on that Labour would insist that all water companies offered discounts to the worst off. At present, firms are under no obligation to provide deals for families in need.

South West Water bill payers still suffer from the highest charges in the region despite the Government's £50 annual discount for every household from next April.

Mrs Creagh told delegates: "People are struggling to pay their water bills. Bad debt adds £15 a year to everyone's bill.

"We want water companies to cut that bad debt by taking tough action on those who won't pay in order to help those who can't pay.

"A Labour Government would force all water companies to offer social tariffs to help those most in need. But this Government wants to leave it to water companies to decide for themselves."

South West Water's average levy went up by £26 to £543 this year – the highest in the country and £167 more than the national average.

In June, the Government has issued guidance to water firms to create "social tariffs".

The document suggested water companies should push up prices for households not benefiting from the reduction by up to 1.5% to fund the discount. This would equate to adding £8 to the average South West Water bill.

The firm, which provides water and sewerage to 700,000 homes in the region, is looking at several options for a new company social tariff.

A committee of MPs this year found there is a "significant proportion" of bad debt in the water industry accrued by those who simply "won't pay", principally in the rental sector, where 80% of water debt can be found.

Unlike electricity and gas providers, no water company can disconnect supply to people's homes, on public health grounds. The Government has ruled out giving water companies this power.

Ministers are consulting on measures to reduce bad debt but Labour, in early proposals, think it could give water regulator Ofwat more powers to insists companies do more to tackle the problem.

The water industry wrote off £328 million of household debt in 2010-11. The cost amounts to nearly 4% of the average water bill.

Meanwhile, Mrs Creagh criticised the Conservative and Lib Dem coalition for being "out of touch" with rural communities – pointing to the plan to abolish the Agricultural Wages Board, which sets pay and conditions for thousands of Westcountry farm workers.

She said Labour had managed to delay legislation to scrap the body, meaning 23,460 rural workers had been given a pay rise yesterday that they would otherwise have missed out on.

"Next year, if the Tories have their way, they won't," she said.

"And when the AWB goes rural wages, over time, will sink to the legal minimum. The government's own assessment shows that the rural high street will lose £9 million a year as those workers lose their sick pay and holiday pay.

"But I promise you that I will be working with my shadow team to expose how out of touch the Tories and Lib Dems are with rural areas."

She concluded: "Labour has changed. Let's show people we are the change the country needs."

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  • AdrianFullam  |  October 04 2012, 8:14PM

    Again means-testing is being proposed, introducing another layer of "assessors", effectively non-productive office workers generating no wealth. In addition helping the "poorest families" is a laudable political objective, but to add this to the rack of means-tested benefits deepens the benefit trap. Already if someone tries to break from the world of benefits by getting a job, they are faced with losing benefits even more than pound-for-pound, such as housing benefit, council tax benefit, free school meals, free prescriptions, tax credits etc., now it would be cheap water as well. Going to work of course introduces new expenses and difficulties - work clothes, transport costs, childcare arrangements etc. So often, people on low wages are better off on benefits, despite a desire to be self-sufficient. The chasm to the higher wages on the other side of the valley is often too wide to contemplate, and this measure would widen it further. The whole concept of means-tested benefits should be resisted, the principle of Universal Credit (where every benefit is quantified and the net loss of benefit does not exceed wages earned) is sound. There are those who would like to see it fail, but a successful system would be the most progressive step in our welfare state since it's introduction. Let's hope the government can break with tradition and deliver a successful new system. The very basic needs of housing, warmth, water and food should be available to all in our modern society (in-kind, if need be), but so too should a clear path to self-improvement.

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  • Big_Ger  |  October 04 2012, 9:19AM

    Anyone who does not pay their water bill should be put on a "pay-as-you-go" meter. As always, the prudent and hard working end up having to subsidise the feckless and workshy. The "something for nothing brigade" should not be given any leeway.

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  • PaddyTrembath  |  October 03 2012, 6:00PM

    Taxman100, you are right that there will be those who would abuse the system, there are always those who do. My point is that it is wrong to penalise those at the "bottom end" of the financial ladder to get at the abusers. There are other ways to prevent, excessive, unsocial use of water than to charge at the point of service. Those who would abuse the system will always find ways around such a system. You are also right that it would have to be paid for from general taxation, but if we were to have a fair, transparent, taxation system, unlike the mess we have now, tax avoidance would be reduced, everyone would pay a fair proportion of the tax burden, according to their ability, and those things that are essentials for life, like clean water and waste disposal, would be funded fairly. (Admittedly, that raises the question of how to evaluate a fair proportion of the tax burden!)

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  • Taxman100  |  October 03 2012, 11:39AM

    PaddyTrembath. "Water, like Health services, should be free at the point of delivery". I agree in principle, but its provision would still have to paid for via general taxation. Which would mean those who do not pay tax, for a variety of reasons, including avoidance, would not contribute to the cost. Additionally, some would abuse the amount of water used if it was perceived as being, 'free'. ie: filling a swimming pool. The solution in that problem would be to 'cap' the amount of 'free' water available to each household. The provision of fresh, palatable water, will become increasing important as the population increases, and wars are already being fought over it!

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  • kernewekonan  |  October 03 2012, 10:45AM

    rip off water companies are the ones that labour ought to be getting to grips with. this £50 discount will only go into the already bulging coffers of these greedy companies by price rises. i have not got a problem with making people pay their way and their bills but lets us have it at least fair.

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  • PaddyTrembath  |  October 02 2012, 10:48PM

    nick113 wrote:- "@PaddyTrembath. The point is it is not people who cannot pay, it's people who won't pay. Far more people fail to pay for water bills compared to gas or electricity because they know there is no sanction." The fact that there are who don't pay their water bills than their utility bills, is, probably, as you quite rightly say there is no sanction. But, when you are in the position of not having enough money to pay all your bills, would you choose not to pay the one that provides your heating and cooking, but will cut you off, or would you choose not to pay the bill that won't? My point is, that whilst there will always be a handful of those who "play the system" for what they can get from it, the vast majority, who owe this money, are actually facing real hard choices. Unfortunately, it is the vast majority that we do not hear about, it is the handful of players that we do, and it tends to be the publicity given to them that creates public opinion, and eventually, political action. Action that the players will find a way around in a very short time, but will leave the vast majority who have no other choice even deeper in the dark and smelly. nick113 wrote:- "..........but the current situation penalises those who do pay their bills." Exactly why water should be free at the point of service. Exactly why water should never have been privatised. Payment for water should have remained included within the rating system. Payment for water should be based on the ability to pay.

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  • nick113  |  October 02 2012, 7:45PM

    @PaddyTrembath. The point is it is not people who cannot pay, it's people who won't pay. Far more people fail to pay for water bills compared to gas or electricity because they know there is no sanction. They are not poor, just anti-social elements who will steal what they can get away with. Of course there are public health issues, but the current situation penalises those who do pay their bills. In some countries, special "trickle feed" supplies are imposed, sufficient for health but making life very inconvenient for non-payers.

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  • Tony248  |  October 02 2012, 6:44PM

    Absolutely right, Paddy. It is not as if enough of it doesn't fall out of the sky. Privatising what was arguably the most essential of the services, and then (unlike electricity or gas) not allowing any form of competition, was one of the worst decisions made by any government ever. I do agree with Nick, though, that Labour do not sound convincing going on about it, after they had MANY years of huge majorities, could have dealt with it, but failed to do so.

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  • PaddyTrembath  |  October 02 2012, 4:27PM

    nick113 wrote:- "Spare me the rubbish about "privatised monopolies" please. The problem is that the current law does not permit non-payers to be cut off. In effect they can steal water and the companies have no recourse. How is that right?" Water and sewage can not be cut off for reasons of public health. How right would it be if you, or a member of your family caught Cholera, Dysentery, or Typhoid, because a family down the road from you were unable to pay their water bill? Water, like Health services, should be free at the point of delivery.

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  • PaddyTrembath  |  October 02 2012, 4:18PM

    "a crackdown on water bill dodgers to fund a discount for the poorest families" Is it not usually the poorest families who, being poor, that are the ones most often not paying? "A committee of MPs this year found there is a "significant proportion" of bad debt in the water industry accrued by those who simply "won't pay", principally in the rental sector, where 80% of water debt can be found." The rental sector, which is where you would expect to find the poorest families. So, what they propose is getting the poorest families to pay, so that the poorest families can then get a "social tariff" that they will, allegedly, be able to afford to pay. Whereas if the poorest families were given an affordable tariff in the first place, most of the debt would not have occurred. The real question then will be, what would the water companies consider an affordable tariff? Will it be like affordable homes, set at the highest rate they think they can get away with? Water supply should never have been privatised in the first place.

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