The water industry watchdog has said it “welcomes” the government’s plan to increase compensation for customers receiving poor services from water companies.
Payouts for customers from firms who fail to meet standards could be set to double under new proposals set out by the Department for Environment, Food and Rural Affairs (Defra).
It comes as water firms have faced a barrage of criticism for continued sewage issues, with regulator Ofwat proposing a total of £168m in fines for three of England’s biggest water companies.
Thames Water was hit with a £104m penalty, alongside £47m for Yorkshire Water and £17m for Northumbrian Water.
Environment secretary Steve Reed said “our water industry is broken” and pledged the government would “clean up” failures and “turn the tide on the destruction of our waterways”.
Regulator Ofwat described the move as “welcome” and said compensation was an “important tool for supporting customers when things go wrong”.
The increased compensation packages will be delivered after the Guaranteed Standards Scheme (GSS), which covers restoration of supply, written complaints, and sewer flooding risk, is updated for the first time since 2000.
Labour’s plans, which will now undergo an eight-week consultation, could see the types of issues resulting in compensation being expanded, and increase the total legal entitlement.
Households affected by an incorrect notice of planned supply interruption would receive £50, rather than £20, and internal flooding repayments would be doubled from £1,000 to £2,000.
A spokesperson said: “Too often the services customers receive from their water company fall short.
“We therefore welcome the government’s goal to improve the GSS scheme and will review their proposed changes carefully… companies must do more to put customers at the centre of what they do.”
Reed added: “After years of failure, households and businesses have been let down by water companies time and time again.”
He said Labour, which has previously announced a Water (Special Measures) Bill, would ensure “companies protect the interests of their customers and the environment”.
While a spokesperson for Water UK, the trade association for the industry, commented: “We share the government’s ambition to reform an out-of-date system and look forward to seeing the details of these proposals.
“In the meantime, we are focused on delivering our largest-ever investment plan to secure our water supplies, end sewage in rivers and enable economic growth.”
