Water company in move to make richer households pay more

NICHOLAS SCHOON

A ''soak-the-rich'' scheme for charging for water is being proposed by one of Britain's biggest water companies.

Under the scheme devised by Wessex Water, the wealthiest households would see their water bills double and, consequently, be encouraged to cut them by installing meters. But almost all low-income households would either see their bills fall or remain unchanged.

The linchpin of Wessex's scheme - which is gaining support from six of the big ten water companies in England and Wales - is that bills should be based on council tax bands rather than the increasingly out- of-date rateable values still used today.

The tariff structure should be such that more than 90 per cent of Band A homes (the smallest, cheapest and usually lowest-income homes) would see their bills fall or stay the same. The majority of band B, C and D homes would also get lower bills when the change to the new system was made.

The mostly wealthy homes with larger gardens and higher water consumption in bands G and H would, however, see their annual bills rise from a national average of around pounds 440 to about pounds 880.

Wessex's chief executive, Colin Skellett, told MPs and experts last week that, as part of the change, households should be offered water meters free of charge or at a nominal price.

Those with the biggest rise in bills could then choose to cut costs by installing meters and reining in consumption, he told a seminar organised by the all-party Parliamentary Water Group.

The scheme has the advantage of spreading water metering without making it compulsory, getting rid of the highly unpopular rates system, and not adding to the water companies' unpopularity by penalising poorer households. Both Labour and the Liberal Democrats advocate the use of council tax bands, based on property values, as an alternative to compulsory metering or rateable values. The Labour environment spokesman, Frank Dobson, who has seen the Wessex proposals, told last week's seminar they were ''a very welcome approach''.

The Government had told the water companies they could no longer use rateable values after 2000, but it made a U-turn on the issue earlier this year. The Secretary of State for the Environment, John Gummer, has refused to let the water companies use council tax bands because of concern that it would create too many losers among low and middle-income households.

Water bills in Scotland are already based on council tax bands.