Objections

My first objection is that it is a bizarre and unusual billing structure. Utility companies say they need the Standing Charge in order to cover their fixed costs. But every company in business has infrastructure and other fixed costs. When you go grocery shopping you do not find a £10 entry fee to the supermarket to cover 'use of store', whether you buy a 50p can of beans or provision a wedding banquet. There is no additional charge for 'use of filling station' when you buy petrol, nor even for 'use of railway station' when you buy your ticket. The Post Office does not charge a monthly fee for its vast infrastructure in addition to the cost of a stamp. The infrastructure cost is factored into the overall markup on all goods on sale in the supermarket, so the emaciated poor pay their fair share and the obese rich pay theirs. The Standing Charge is a form of poll tax, a relic from the days when utilities were nationalised industries, subservient to government which can get away with such abuses of the paying public. Although as the early 1990s demonstrated, even governments can no longer rely on poll tax.The imposition of a Standing Charge is a deliberate choice to penalise the poor in their efforts to manage their bills, and the low users in their efforts to conserve a valuable resource. In short it is an archaic form of charging and an abuse of the consumer.




My second objection is that every company is free to formulate its billing policy, and that Anglian Water's choice is faulty in that it deliberately ignores the needs and ability to pay of many of its consumers. For at least 15 years before 2015 Anglian Water was able to operate a proportional Standing Charge on its So-Low tariff. It claims that it now needs to impose a full Standing Charge for fear that an imaginary subsidy will benefit the wrong people, which is simple doublespeak. That Anglian Water is in possession of more than sufficient financial acumen to avoid penalising its poor and environmentally careful customers is provided by economist Ann Pettifor (BBC Newsnight 24/8/2015) who revealed that in the previous year Anglian Water had made profits of £160M upon which it had paid tax of £0 (zero). Such financial dexterity should easily be able to accommodate the needs of low users and those pursuing a low impact environmental lifestyle.


Incidentally I have to recall that image of my MP, Stephen Barclay, hogging the photoshoot which celebrated half a dozen Anglian Water apprenticeships, a zero tax bill and a massive hike in costs for his poorest constituents. What a splendid fellow he is; he does take a luvverly picture. No wonder there was dancing round the maypoles of Wisbech when he announced he had got himself a minor post in the whips' office and a foot on the career ladder.



My third objection I have already touched upon; it is the impact upon the poor. Anglian Water initially intended to introduce the full Standing Charge over three years because its impact upon low users would be so destructive. It has subsequently had to revise that to five years because of consumer reaction. The Standing Charge is unjust and socially destructive in that it unfairly penalises the poor in their attempts to manage bills, pensioners who are likely to be low users, single person households and those who follow environmental advice to be restrained and respectful of a valuable natural resource. (I will return to them anon).


Academic studies, (e.g. Waddams Price "Liberalising UK residential utility markets", Universities of Warwick and Leicester; Gibson & Price "Standing Charge rebates") have emphasised the negative impact of the Standing Charge upon low income families' debt levels. Anecdotally the BBC's You and Yours programme has featured individuals who have voluntarily required to have their water supply cut off and who find using bottled water a cheaper option. This is an outrageous situation for utility companies to produce through their charging policies.



My fourth objection is that the Standing Charge contradicts stated policies of the EU, of the UK government, and even of Anglian Water itself, which has often distributed advice on saving water and gewgaws to promote lower consumption. Anglian Water both urges lower consumption and punishes lower consumption through what is in effect a higher per measure cost. Loading the costs more heavily upon initial units results in every additional unit being charged at a lower rate.


suppose Standing Charge = £10, unit cost = £1

1 unit costs £1 + £10 = £11 which is £11 per unit

2 units cost £2 + £10 = £12 or £6 per unit

3 units cost £3 + £10 = £13 or £4.33 per unit

50 units cost £50 + £10 = £60 or £1.20 per unit

100 units cost £100 + £10 = £110 or £1.10 per unit

The more you waste, the cheaper it gets!

This is what the government committee considers you and I are too stupid to understand.



To quote from www.eea.europa.eu/themes/water/water-resources: "The Water Framework Directive obliges Member States to use pricing for water-related services as an effective tool for promoting water conservation." Possibly whichever Nasty Party was in power when this directive was issued obtained an opt-out, and I know our residency in the EU is approaching its end, but this is just fiddling with the law for the benefit of the rich and powerful. Let me repeat: Anglian Water both urges lower consumption and punishes lower consumption through a progressively diminishing per unit cost. A consumer might well admit to being confused!


My fifth objection is that Anglian Water claims to have introduced its Proportional Standing Charge as an inducement to people to adopt water metering and abandon the old flat rate charge based upon the property's rateable value. Now that meter installation has apparently reached a satisfactory level it is dishonest and deceitful of Anglian Water to withdraw the reward. The Proportional Standing Charge cannot have been a reward for 'installing' a meter, but for 'having' a meter, and should therefore not be subject to withdrawal unless removal of the meter is also an option.  Additionally it is somewhat bizarre of Anglian Water to install a meter only to then largely disregard its reading in favour of the flat rate charge it replaced.


And a sixth objection is that all consideration of Anglian Water's activities must give due weight to the fact that it is the monopoly provider of an essential commodity. It is not unreasonable to regard all utility companies as monopolies since successive governments have so screwed up their regulatory task as to leave the consumer with minimal choice in a market that operates badly and to the suppliers' advantage. Water is undeniably a monopoly: one tap, one billing office.

As monopoly supplier of an essential commodity Anglian Water has onerous social and moral obligations which it ought to acknowledge by catering to the various needs of its captive customers. Its charging policies cannot be allowed to be capricious, nor contradictory, nor anti-social, nor follow mere greed for profit. Yet this is precisely what government policies currently promote.


Of course, none of these objections is thought worthy of consideration by the Consumer Champions Ofthis and Ombudsthat, so they will have to take their chances in a Court.


My argument is that Anglian Water fails to acknowledge the needs of a substantial element of their customer base. They fail to cater to the low user, on whom instead they impose punitive charges. They fail to encourage conservation of water, as per the policies of the EU, the UK government and themselves, instead imposing punitive charges upon those who comply with those policies and rewarding those who contravene them. Anglian Water is clearly abusing its monopoly status.


(Incidentally we might contrast this policy with the rewards, in terms of reduced road tax, showered upon owners of diesel cars when diesel was believed to be less polluting. Diesel owners get rewards for obeying government policy, water consumers get punishments!)


There is no sense in which the standing charge may be considered analogous to a membership fee because there is no suggestion anywhere that a consumer is in a membership relationship with Anglian Water, nor is the standing charge analogous to a flat fee delivery charge. Water is not pizza: if the consumer is away from home and uses no water the standing charge still applies.


The standing charge is an extraordinary contrivance designed to maximise profit without consideration for those who have no alternative supply.