Social tariffs could lead to consumer ‘cliff-edge’

The political row over affordability hit the water sector this week, as Tory MP Charlie Elphicke struck back at Labour plans to make social tariffs compulsory, through an amendment to the Water Bill.

Elphicke said the compulsory social tariffs for water companies proposed by Labour could lead to a ‘cliff-edge’ for some households.

Speaking to Utility Week today ahead of the second reading of the Water Bill, Elphicke said: “I’m particularly concerned that if you have a social tariff system like Labour is suggesting, people who are just above that level will have a potential cliff-edge. One needs to be quite cautious and quite careful about the design of a system like that.”

Earlier today, Maria Eagle, Labour’s shadow environment minister, called for an amendment to legislation that required all water companies to introduce a national affordability scheme to help those struggling with their bills.

This she said, would end the current “postcode lottery whereby companies choose whether to offer a social tariff.”

However, Elphicke said: “The most important thing is that we have the cheapest possible water for everybody, rather than having cheaper water which will have to be paid for with more expensive water for everyone else.”

Having recently claimed that the previous government had permitted a culture of “industrial-scale tax avoidance” within the industry, Elphicke said the Bill was right in extending the regulator Ofwat’s powers.

“There is a real case to look at as the Bill goes through committee, whether Ofwat’s ability for pricing reviews can be strengthened, particularly where there has been a favourable change and companies make excess profit,” he said.

Elphicke also said Labour had “no ideas of their own” and were adopting the case he had been making to parliament his month.