Eustice urges Coffey to hold her nerve on single social tariff

Former environment secretary George Eustice has appealed to his successor to reconsider her objection to a single social tariff in water.

Speaking to Utility Week as part of our Action on Bills campaign, Eustice lamented “short term fudges” that fail to solve the problem of water poverty and revealed he left Defra with the policy groundwork for a national social tariff completed, arguing all that is needed now is for the department to “crack on and implement it.”

Eustice first proposed the idea of a national social tariff for water in 2012, sparked by concerns about bills in his south west constituency and the need for uniformity of support across the country to help the most vulnerable.

As secretary of state at the department for environment, food & rural affairs (Defra), he almost made this vision a reality and argues that with 1.5 million households facing water poverty, it is needed now more than ever.

“For the long term, the idea of a national social tariff makes sense,” he said. “All of the policy groundwork was done, we just need Defra to crack on and implement it.”

His idea was based on a two stage process – one means tested so people on lower incomes would be eligible, secondly the size of the payment would be proportionate to the variance of the average national water bill.

“It would be a sort of leveller in terms of support for the most vulnerable,” Eustice explained, “that was the genesis of the idea.”

This meant that vulnerable people living in parts of the country where water bills are higher would get a larger contribution, while in areas where bills are comparatively lower people would receive a smaller payment.

“At the time, Defra said, this is all a bit complicated and needs legislative change. And so the idea of a social tariff was seen as too complex.”

The Treasury at the time offered a temporary support fund for customers in the south west with higher water costs as a rebate for customers via Cornwall council. This was only meant to be an interim measure, but in the meantime CCW picked up the proposal for a national social tariff and published a report 18 months ago, which was very supportive of the concept.

“At that moment I gave the green light to officials in Defra to crack on with designing it and trying to get it in place.”

Despite more than a year of work progressing the plan with input from across the industry and consumer bodies, the idea was rejected by Thérèse Coffey when she arrived to head up Defra last October. Coffey said she was “more minded not to have one tariff nationally, but to have consistency water company-by-water company”. Water companies and campaigners were left scratching their heads as to how this consistency could be achieved without a standardised tariff, or funding support from government. Clarity on this is a core plank of Utility Week‘s new Action on Bills campaign.

“The current secretary of state has a view of trying to do fewer things. To consolidate and do fewer things,” Eustice said. “Which is a bit different to me. I had the view that you’re never there for long and you should try to sort out as many problems as you can, while it’s on your watch.”

He mused that Treasury may extend the rebate for customers in the south west for a few more years rather than implement a national scheme.

“A national social tariff recognises not only financial vulnerability within a group, but also the fact that there’s quite a bit of variance in terms of the total bills for that vulnerable cohort.”

At that point, Eustice said the proposal enjoyed support from the water companies and it was government policy to get behind it.

He added: “It would be a terrible shame to let this idea go. With all of these things, you sometimes have to just make the decision and lock down the decision and implement it. There’s always a danger that as you get closer to an election, people lose their nerve to do things and start doing short term fudges instead.”