Millions of customers to be handed £2,000 water bill compensation under shake-up

Millions of customers are set to get up to £2,000 in water bill compensation under the first shake-up in DECADES. New regulations from the Department for Environment, Food and Rural Affairs (Defra) will mandate water companies to provide higher, compulsory compensation to both customers and businesses.

The reforms have been welcomed by consumer groups, such as the Consumer Council for Water. Under the new rates, some customers will be eligible to receive £2,000 automatically if they are affected by a sewage flood, an increase from the current £1,000.

Issues such as low water pressure could see payments rise to a whopping £250, compared to the current £25. Environment Secretary Steve Reed stated that these measures aim to provide better compensation for customers who have been "too often let down by water companies."

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He said: "We are clear that the public deserves better compensation when things go wrong, so I'm taking action to make sure that happens. This is another step forward in our plans to reform the water sector so it serves customers and the environment better."

Mike Keil, chief executive of the CCW, said: "The increased payment levels when things go wrong, alongside fewer reasons for companies to avoid making payments, means that there are far greater incentives for water companies to get things right the first time.

"The overhaul of these standards marks a step forward in improving consumer protection and repairing fractured trust in the water sector." Speaking last week, Ed Davey, the Liberal Democrat leader, called for Ofwat to be scrapped. “Families across the country, already struggling to make ends meet, have been faced with sky-high water bills, while water company executives have lined their pockets with bonuses,” he said. “This cannot continue. A useless, tired regulator won’t end the scandal of bonuses for sewage dumpers.

“The Liberal Democrats are urging the government to scrap Ofwat and introduce a tough new regulator with real teeth, to make sure water companies put customers and the environment first, instead of just lining the pockets of their shareholders.”