Martin Lewis blasts water firms over baffling language blocking help for millions
Water companies require consumers to provide their “equivalent income” when assessing compliance with social tariffs; Even financial expert Martin Lewis admits he doesn’t understand the term.
The founder of MoneySavingExpert told MPs on the Public Accounts Committee that such vague language was a significant barrier for vulnerable individuals seeking support.
Mr Lewis expressed surprise to the committee, saying: “What I’m saying is that if none of us in this room know what that means – and I don’t know what that means either – then I think that’s probably not a good way of communicating that to vulnerable people.”
Asked whether firms were deliberately using complex terminology to deter applicants, Mr Lewis suggested it was a failure of communication rather than a deliberate conspiracy. “I think it’s because they’re terrible at communicating. I don’t think it’s a conspiracy, it’s just nonsense,” he said, adding that regulators “need to cut through the nonsense.”
He advocated a comprehensive communications audit of water companies’ social tariffs, suggesting that a standardized approach across all providers would lead to “centralised, really good communication”.
According to Mr. Lewis, the scale of the problem is quite large. He told the committee: “According to the Policy in Practice, 3.8 million households do not benefit from water social tariffs. This is outrageous. Broadband. 7.5 million households.”
Turning to the energy sector, Mr Lewis highlighted a different but equally pressing issue: the lack of a dedicated social tariff. He criticized the current “fallback tariff”, which he colloquially referred to as a “breeches cap”, for failing to protect the most vulnerable.
“We went to a backstop – I call it a trouser flap, not a price cap – to ensure that people who never switch are not defrauded as disgustingly as they would be if there was no price cap,” he explained.
He argued that the energy market had turned into “a semi-regulated tariff for 60 percent of the population”, creating “illegitimate victims of competition”.
Mr Lewis painted a striking picture: “Alternatively, you have a 90-year-old struggling with dementia who pays more than me to keep the kettle boiling – because that’s the way things are, because I have a good tariff, as you’d expect of course – and is therefore an illegitimate victim of competition.” He concluded that the current system, which is “a halfway house between the market system and price regulation”, results in “the worst of both worlds” and points to “some really big systemic problems going on across all these sectors”.
Anne Pardoe, head of policy at Citizens Advice, echoed Mr Lewis’ concerns, stressing that awareness of these tariffs was “really low”. He emphasized that a “lack of standardization” was a major obstacle, making it difficult for people to understand and claim their rights.
Ms Pardoe said a single social tariff was recommended by the Cunliffe Independent Water Commission but the government chose not to proceed, which was “a truly huge missed opportunity”, noting that there was a “critical opportunity” for standardization in the water sector.
On broadband, Ms. Pardoe pointed out that the voluntary nature of the program “gives broadband companies absolutely no incentive to A, get these things right, and B, promote them.” As a result, he observed: “They have done little to promote these tariffs among their customers.”
Previously, Ms. Pardoe had also raised alarms about increasing reliance on AI chatbots for customer service. He explained that individuals trying to contact essential service providers often get “stuck in this loop” and cannot reach a human being.
“I’m sure we’ve all done it when we try to contact customer service through a website and find yourself stuck in an endless loop,” he said, adding that even Citizens Advice advisers have struggled to contact creditors, including energy, water and telecommunications companies.
He highlighted the vital role of regulators in tracking this trend, arguing: “It’s really important that people are able to communicate with their essential service providers when they encounter difficulties.”
