Water Bill: Missed opportunity to stop customers footing bill for company failures

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Labour and Conservative MPs have failed to back Liberal Democrat plans to protect customers from footing the bill for water company bailouts in a House of Commons vote this evening. 

The Party forced a parliamentary vote to ensure it is creditors, rather than customers, who pay when water companies go bankrupt. The Bill, as currently drafted, leaves customers on the hook when a water company goes into special administration procedure. The Government voted against the amendment whilst Conservatives abstained. 

The Liberal Democrats will continue to push the government to ensure customers are not left to pick up the tab for the failings of water companies. On average, a third of customers' bills are spent servicing water company debt. 

Commenting, Liberal Democrat Environment Spokesperson Tim Farron MP said: 

“Customers should not have to foot the bill for the failings of water companies. It is incredibly disappointing that Labour and Conservative MPs failed to take the opportunity to right that wrong this evening. 

“The government must urgently address this and ensure customers are not left to pick up the tab for the financial mismanagement of water companies. 

“The Liberal Democrats have long fought to end the sewage scandal and ensure customers get a fair deal, so I am proud that Liberal Democrats have successfully campaigned for the introduction of a single social tariff for vulnerable households. 

“With bills on the rise, the government must do everything it can to support vulnerable customers in water poverty. But without a radical overhaul of the water sector, this measure alone will not be enough.”

ENDS 

Notes to editors: 

Liberal Democrats have successfully secured a concession on one amendment which will introduce a single social tariff for vulnerable customers. Currently, the financial support each water company offers vulnerable customers differs, which has created a postcode lottery of water bill support. For example, Wessex water offers up to 90% off on the average household bill, whilst Anglian Water only offers up to 50%. 

With water bills set to increase by £31 on average over the next four years, it is imperative that customers who are at risk of water poverty are financially supported regardless of where they live. This measure will help to achieve the Party's call to eliminate water poverty within this Parliament.

As well as the vote today, Liberal Democrats are pushing for clear pollution reduction targets and the introduction of a clear threshold for when a failing water company should be put into the bankruptcy process – rather than letting them continue to rack up debt indefinitely, with customers paying the price for the ever-increasing interest payments. 

The government’s concession can be found below: 

NC18: The explanatory statement at the bottom of the amendment is: "This new clause supplements existing powers to provide for special charging arrangements for customers in need. It enables automatic enrolment, cost-sharing among water companies (and their customers), and broader information-sharing between public authorities and water companies; and imposes a requirement for consultation. "

The Liberal Democrat amendment would:

Ensure that creditors, not bill payers must fund the bail out of water companies, not bill payers in the event of a water company going into special administration procedure.

Consumer Council for Water: https://www.ccw.org.uk/save-money-and-water/help-with-bills/