Public Accounts Committee
Oral evidence: Regulation of water, energy and broadband, HC 105
Monday 29 June 2026
Ordered by the House of Commons to be published on 29 June 2026.
Members present: Sir Geoffrey Clifton-Brown (Chair); Mr Clive Betts; Anna Dixon; Rachel Gilmour; Sarah Green; Rupert Lowe; Catherine McKinnell; Sarah Olney; Tristan Osborne; Matt Turmaine.
Gareth Davies, Comptroller and Auditor General, National Audit Office, Anita Shah, Director, National Audit Office, and David Fairbrother, Treasury Officer of Accounts, HM Treasury were in attendance.
Questions 1-99
Witnesses
I: Martin Lewis CBE, Founder and Executive Chair, MoneySavingExpert; Anne Pardoe, Head of Policy, Citizens Advice; and Ali Bell, Director of Communications and Policy, Consumer Council for Water.
II: Dame Melanie Dawes, Chief Executive, Ofcom; Tim Jarvis, Interim Chief Executive, Ofgem; and Chris Walters, Interim Chief Executive, Ofwat.
Report by the Comptroller and Auditor General
Regulating water, energy and broadband to protect consumers in vulnerable circumstances (HC 27)
Witnesses: Martin Lewis CBE, Anne Pardoe and Ali Bell.
Q1 Chair: Welcome to the Public Accounts Committee on Monday 29 June 2026. Millions of people across the UK experience permanent or temporary circumstances that prevent them from engaging with the three essential services for modern daily life: water, energy and broadband. The regulators of those three services—Ofwat, Ofgem and Ofcom—have statutory duties to protect or further the interests of consumers, including those in vulnerable financial circumstances. The NAO Report on the subject found that the regulators had made progress on clarifying the expectations around how far companies should support consumers in vulnerable financial circumstances. However, as we all know, significant challenges still remain. Consumer debt to water and energy companies reached a staggering £7.2 billion in March 2025, and many consumers still find it difficult to contact companies when something goes wrong.
We are fortunate to have with us today a panel of real expert witnesses with a huge wealth of knowledge and experience of working with customers in the relevant industries, ahead of our questioning of Government officials later this afternoon. We will ask this panel what they think are the barriers and challenges for customers in vulnerable financial circumstances when engaging with water, energy and broadband services, and about a number of other key issues. As I say, we are pleased to have a very experienced panel with us this afternoon. Could you introduce please yourselves?
Martin Lewis: I am Martin Lewis, founder of MoneySavingExpert and the Money and Mental Health Policy Institute.
Anne Pardoe: I am Anne Pardoe, head of policy at Citizens Advice.
Ali Bell: I am Ali Bell, director of communications and policy at the Consumer Council for Water.
Chair: It is great to have you all with us.
Q2 Catherine McKinnell: Thank you all for being here. At the risk of asking a question so broad that you do not know where to start, in your opinion, Martin, where are the biggest challenges for customers in the water, energy and broadband sectors at the moment?
Martin Lewis: I think there is still a huge amount of confusion both for vulnerable and for non-vulnerable people across all the different sectors. Some of that is caused by regulation, some is caused by external circumstances, and some is caused by the way companies operate.
I have to say that I think the situation is better than it was when I did these things 15 years ago. There has been some improvement in behaviour and in trust. For example, 15 years ago, for the energy sector specifically, I would never have told people to contact their company when they were in trouble, because I thought they would behave as bad actors. And they often did—there was data on that. In that area, the situation has changed, and vulnerable-customer activity has improved.
I will do a brief bit on each sector. In the energy market, we have the energy price cap, which was meant to be a backstop tariff for vulnerable customers, but 60% of the population are now on it. That cap is operating on a time lag, so although the middle east conflict started and worldwide wholesale rates rose around March, that will only hit people’s bills on 1 July. It will continue to hit people’s bills in October and possibly next January. At the same time, fixes are getting cheaper, so we have a duality of market: one that is based on a five-month time lag, and one that is based on instantaneous wholesale prices.
Vulnerable people cannot and do not take advantage of the potential to fix right now. For people on prepayment meters, there is no competition, so Ofgem has rightly made prepayment cheaper for those who are on price caps, and it is now the cheapest way to pay. I think that was a good move. I get questions from the public: “I’m on prepayment. Is it cheaper? Should I move?” I will give you the answer that I give to consumers: if you are going to stay on the price cap, you are better to stay on prepayment, but if you can move off the price cap and are able to engage in the market, there is a whole wealth of competition on direct debit that does not exist on prepayment. Those on direct debit who are willing to switch will pay materially—currently 17%—less than those people who are on prepayment metres, even though prepayment metre is cheaper on the price cap. The length of time it has taken me to explain that to you is an example of the complexity.
If we look at mobile and broadband—I hope you got the report we put out today—Ofcom regulation brought in transparency two years ago, on the back of above-inflation price hikes, but our examination of 47,000 tariffs shows that 75% of people are paying more because of what Ofcom has done than they would have done otherwise, and 99% of people are paying more than if it had done—if you will forgive the phrase—the bleeding obvious and simply said, “You cannot raise prices mid-contract above inflation.” That is the obvious solution. Why we do not do the obvious is not obvious, because it is pretty obvious that that is what we should have done.
Water is a really interesting industry. Competition? No. privatisation? Yes. The worry is that we have the worst of both worlds when we come to that particular market.
I do not understand why the Government did not universalise the social tariff. In my job, I always use this example: mass communication. How do you communicate? How, on my television show, do I explain a social tariff? I have to say, “If you’re on a lower income, you may be eligible for a social tariff, but I’m afraid I can’t tell you what a lower income is, because it is different with every water company.” In some, it is defined by benefits; in some, it is defined by income; and in some, it is defined by an income assessment.
Basically, my really rough rule of thumb—why am I having to give a rough rule of thumb?—is, “If you earn under about £26,000, check out whether you can get a social tariff.” But that is not good enough—because what happens? Someone goes and checks it out and they are on £23,000, but they are told they are not eligible, and they say to everyone, “It’s crap. I wasn’t eligible, and he told me wrong, because he said, ‘Go and check.’” All I can do is to say, “This is the level at which you should check.”
I hope that gives you a broad spread of the different things going on in different industries. Confusion tends to rule, certainly among vulnerable customers and among many not so vulnerable. A big question for you is: how far do you spread the help up the net? Do we look only at the very lowest people on means-tested benefit? What about those on low and middle incomes, who are struggling with these systems too? I will stop there.
Q3 Catherine McKinnell: That is an incredibly comprehensive reply. It is interesting that you referred to the challenges for vulnerable customers; in terms of the breadth of the challenge, unless someone makes a full-time job of this, it is very difficult to navigate very complex systems, as you rightly identified, even if you are not vulnerable. It would be helpful to understand to what extent—you mentioned this at the beginning—the regulators have done some good things to improve the matter, and what more you think they need to do to fix some of the challenges you outlined. Obviously, there are many more besides.
Martin Lewis: On energy, I would say that two thirds of my mailbag—it is probably worth saying this because you are all politicians, and I am probably one of the few people who has a bigger mailbag than yours, to be honest with you—on energy complaints is very simply about the standing charge. The moral hazard is that you have to pay £315 a year just to have the facility of having gas and electricity, that we have older people who do not use gas for two thirds of the year still have to pay a daily charge for it, and that if people who are lower users reduce their usage, it does not make any difference, because they are still paying the standing charge. That is, by far and away, the thing that drives people mad the most.
I always use this analogy: if I go to buy a book from a bookshop, they do not say, “Sorry, but you have to be a member of the club and pay us each month in order to buy a book, because we have fixed costs.” I do not have to pay for that, because the fixed costs are factored into the price of the book. Why do we have to have fixed costs factored into a daily charge and variable costs factored into a unit rate?
The shift could be done. I was very hopeful with Ofgem. We had long conversations about it bringing in a dual price cap, with a low standing charge and higher unit rate and the normal standing charge and lower unit rate. In my view, people who are on the price cap should be automatically shifted to whichever one was beneficial for them based on their prior year’s usage, with an opt-out basis if they chose not to. That was stopped and then it was moved to this system of, “We’re going to mandate switchers’ tariffs, which have a lower standing charge.” My big problem is that that does not help anybody who is vulnerable, because they are the people who do not switch, whom the price cap was set up to protect in the first place, so switchers’ tariffs do not help. And then we heard, “We’re going to trial switchers’ tariffs, and they will be coming in spring.” We have not seen any yet.
Q4 Catherine McKinnell: On the different types of customers who experience these challenges, I recently heard from a constituent who is 85, and out of nowhere landed a bill of £575. It was all to do with the company being unable to take smart meter readings, so they had made an estimate that was quite wild, given his energy use. He had been writing to them only to discover that they do not have a postal address and were not receiving any of the letters. That is just one example of a vulnerable customer—a disabled 85-year-old. Do you have reflections on the different experiences of different customer groups with some of the challenges you are outlining?
Martin Lewis: With a different hat on, at the Money and Mental Health Policy Institute charity, which I chair, we have a mental health accessible audit. That is one of the things we do for mental health—I have less experience on the physical health side. The thing to understand is that for some people being texted is a nightmare. For other people, text is the only way they can communicate. When you are talking about essential service providers, which all the firms involved in these industries are, we have to start having rules on how they communicate. Many modern people only want digital—I am a digital person myself, and I would want that—but there are many older people, vulnerable people, and people with disabilities of mental and physical health who need different contact mechanisms.
We have a host of problems over billing. Billing is incredibly complex, especially in the energy world. We have the issue that you cannot be backbilled for more than 12 months. I think Ofgem has been cracking down on that, but I am still regularly contacted by people who have had two years of backbilling. If you do not know that you cannot be backbilled for over a year, you do not know that you can say, “I’m not paying for more than a year because it was your fault.” There are technical rules—if you have behaved wrongly, it doesn’t apply—but, effectively, if they have not billed you for two years and it is their fault, they cannot bill you for longer than 12 months. But people do still get billed. One would surely think that in this modern digital world something is systemically going wrong in the companies in the way that we do this.
I will throw in one final point while I have my money and mental health hat on. Let us picture a physically disabled person or someone with a severe mental health problem, including potentially going into NHS mental health crisis care. I have my water company, my energy company and my broadband company. I also have my mobile company, my bank and my insurer. Let us imagine I am in a crisis mental health state. I am in a fundamental anxiety situation. I am potentially going to be hospitalised. Just to go back, we have had people come out of NHS mental health crisis care who on the day they get back have bailiffs at their door, so this is not a small issue. At that point, I have to call up my water company and tell them, “I’m sorry, I’m going through a mental health crisis at the moment.” Then I have to call my energy company, and then I have to call my broadband provider, my mobile provider, my bank and my insurer. These things are detrimental to my mental health.
There is no “tell them once” system and no “tell them once” database. There are data privacy issues with all this that would need to be handled, and it could only be done on a voluntary basis. You are talking about three different regulators. This is no criticism of them—they have their remits on this—but these issues do not live in isolation from people’s finances. They are a subset of everything that people deal with. We have a fundamentally intransigent system that puts the burden on the vulnerable individual at moments of vulnerability to declare their vulnerability. It should not be like that in a digital world. This is the one time where we are actually capable.
We need to have a centralised system where you can volunteer to tell them once, and after telling them once, it should go to all essential service and public service providers, as long as you are happy with that with—there should be data privacy, and it should be a voluntary system, not a compulsory one. We need to start working that way. The fact that it is done on a tripartite level is almost a problem from the start.
Catherine McKinnell: At the risk of only scratching the surface, I will hand back to you, Chair.
Q5 Chair: Can I come back to you on that last point, Martin? Do you think we should have a unified system for the three regulators on total customer indebtedness, so that each of the three regulators can then regulate a system on a total debt? It makes it clear in the Report that people might be able to pay their energy bill of £500, but if they do, they are then likely to get into debt with their other utilities.
Martin Lewis: I have not looked at that. I have looked at it more on the contact basis, so I am just going to go slightly slow on that.
I am going to plead the fifth—not that you do that in this country—on debt, because I have not looked at it, but if you unified those three, you are still only scratching the surface. The worst type of debt in this country is council tax debt. That is the one you should not mess with. They have ridiculous enforcement powers, and they move far too quickly. We have got the Government to change that—coming in next April, they are going to be changing the rules to slow it down a little bit. We have the whole system of debt, and we have an underfunded debt-counselling service in this country that is not joined in and interlinked with everything that is going on. We have someone who does brilliant work on that—a representative of Citizens Advice—on my right.
Even if that were to work—and I would need to do some thinking—it is not unified enough for the vulnerable individual at a point of crisis. The funny thing is that the only time we do this well is when someone has died. Maybe we should do it better while people are alive.
Chair: I accept that. As I said in my opening remarks, consumer debt for water and energy—just the two of them—has reached the total of £7.2 billion, so we are getting into some pretty big figures here. Anyway, let us leave that for the moment. Although Tristan Osborne was very kindly going to ask the next question, Sarah is now here.
Q6 Sarah Olney: I am here; I came in at the right time.
From the cases you encounter, Ali, what are the most prominent barriers that consumers in vulnerable circumstances face when they are engaging with water, energy and broadband services?
Ali Bell: At the Consumer Council for Water, we go around and do what we call complaint assessments and debt assessments. Basically, we go into the water company, sit in the building with the customer services team for two days and do a really deep dive into a randomly selected bunch of complaints. We listen to the phone recordings, we read the emails, we look at the case files and we discuss with the customer service team what went well. We find lots of examples of good practice, and some examples of not-so-good practice.
From wading through all that in real detail, we have found that customers are not always proactively offered the help they need. To a certain extent, utility companies and water companies wait to be asked by the customer for the help they need, but we know that 39% of people who need financial help from their water company do not even know that that’s a thing they can ask for, so they are not asking for it because they didn’t know it was there.
We find this plays out in people not getting the help they need early enough in the process, and that means there are more problems—people who were not in debt are getting into debt, and people who were already in debt are getting into worse debt. We know that people find it really difficult to talk about financial vulnerability with another person. There is loads of embarrassment and shame, and people are really fearful: “If I proactively bring this to my water company’s attention, things are going to get worse for me.” Honestly, not everyone knows that if you cannot pay your water bill, you cannot be cut off, so people are worried about the consequences, even though that is not a consequence.
We find that if people have mustered up the courage to tell their water company about their financial issues, they will then be passed on to another team within the water company and they have to tell that embarrassing, shameful story again. Or maybe the company will say, “We’ll call you back next week,” and it’s a different person, so they have to tell the story all over again. It is a massive issue of awareness and being able to tell that story.
Q7 Sarah Olney: Anne, what do you think the regulators can do to encourage the utilities to bring down barriers for their vulnerable customers?
Anne Pardoe: I echo what Ali said about some of those barriers. The other thing that we are increasingly seeing is the use of AI chatbots when people are trying to contact the companies through their websites, and they get stuck in a cycle of trying to ask for help. Online might be the way they feel most comfortable doing that, but I am sure we have all tried to contact customer services on a website only not to get quite the right answer and ended up in an endless cycle.
We also see this issue with our advisers. We recently did some research on the challenges that our debt advisers, in particular, face in representing our clients. Even our advisers can find it really difficult to get in contact with creditors, including energy companies, water companies and telecoms companies. They can be really slow to act, or not accessible through different channels. I think it is on regulators to make sure that they are monitoring this very carefully.
Sarah Olney: Specifically the use of AI, or how they are responding more broadly?
Anne Pardoe: More broadly, because it is essential that people are able to contact their essential service providers when they are having difficulties, whether directly or through an advice provider like Citizens Advice. We need to make sure that the regulators are really on top of this and putting requirements in place where the data is showing that it is not effective.
Q8 Rachel Gilmour: To go back to what Ofwat and Ofgem are not doing to help vulnerable customers, what more do you think they could do to make potentially eligible consumers aware of the financial support and social tariffs? As a Member of Parliament, I have people coming to my surgeries, and even I—that sounds very grandiose, doesn’t it?—am not aware of what support is available, from whom and at what levels.
Martin Lewis: Funnily enough, Dom, a member of my team sitting behind me, went on a water company’s website when he was researching this. Do you know what your equivalised income is? I don’t know what mine is, but that is what he was asked for. I suspect that none of us in this room knows what our equivalised income is.
Q9 Rachel Gilmour: What does it mean?
Martin Lewis: I still don’t know. It is used by one of the water companies for whether you are entitled to a social tariff—if your equivalised income is below x. The point I am making is that if none of us in this room knows what it means, and if I don’t know what it means, it is probably not a good way to communicate to vulnerable people.
Q10 Rachel Gilmour: Do they not want to establish what it means because they don’t want to offer potential help?
Martin Lewis: I tend to think it’s because they are crap at communicating generally.
Rachel Gilmour: I tend to agree.
Martin Lewis: I tend to think that this is not conspiracy; it’s just crap.
Rachel Gilmour: You can come again, Mr Lewis. We like clear talkers here.
Martin Lewis: What the regulator could do is crack down on crapness, if you like—if I am allowed to keep saying that word. I have had this in so many different sectors. We recently had it with councils, which were not correctly explaining when people were entitled to the SMI discount. There were different websites for doing it, and a third of councils had it wrong on their websites.
Now, there aren’t as many water companies. You could start with a communications audit of how these water companies are communicating the social tariffs. It would be far better if they all had the same social tariff, as you could then have really good, centralised communication. I could then go on the telly, as could lots of other people, and tell the whole country exactly how it works without having to say that they should check—and when they check, they find it is equivalised income.
According to Policy in Practice, 3.8 million households are missing out on water social tariffs, which is just outrageous. The figure for broadband is 7.5 million households, although in some cases, broadband social tariffs are not as good as the competitive tariffs out there, if you are prepared to switch and switch again.
What I find interesting on this—and I am not doing this as a rent-seeking thing—is that I have made sure we have social tariffs in MoneySavingExpert’s broadband comparison. We ask you if you are on certain benefits, and then we include social tariffs if you are, and we do not include them if you are not likely to be eligible. I believe we are the only comparison that does have social tariffs, because of course social tariffs do not pay lead fees, so you do not generate any money if somebody switches through that particular mechanism. That doesn’t seem to be the way to communicate them, for me. They should be in every different comparison that goes on there, so I would be putting that in.
On energy, the biggest problem is we do not have a social tariff. We went for a backstop tariff. I call it the “pants cap”, not the price cap. We went for a backstop tariff that was meant to make sure that people who never switch will not be quite as hideously ripped off as they would be under a no price cap situation, but now we have moved into a quasi-regulated tariff for 60% of the population.
In energy, we should be defining the legitimate and the illegitimate victims of competition. If you forgive me—I mean it in a complimentary way—if all of you stay on the price cap and pay too much because of it, that is your own fault, because you are educated digital natives who are capable of doing that piece of work for yourselves and it is out there. This is if we want a competitive market. I am agnostic. You could also regulate all prices. It is not a market-championing bit. Alternatively, then we have your struggling 90-year-old with dementia who pays more to boil a kettle than I do—because, as you would expect, I am on a good tariff—and therefore is an illegitimate victim of competition.
Even before we get into this, we have never defined who are legitimate and illegitimate victims. If you are going to work on the method of having a market-based solution—as I say, I am agnostic; I am not championing it, but I work within the system that exists—then you have to have price differentials if you want competition, because they are what incentivise people to move from tariff to tariff and grab a good tariff at the moment they can when a one-year fix is cheap. Who can do that? Who can’t do that? Who should we protect? Who shouldn’t we protect? We have a halfway house between a market system and price regulation, and we have the worst of both worlds. There are some really big systemic problems going on in all these sectors.
Q11 Rachel Gilmour: Anne, can you answer the same question? I know you come from a slightly more grassroots perspective, at Citizens Advice.
Anne Pardoe: We have done quite a lot of work around social tariffs, and the NAO and Martin are absolutely right: awareness of those tariffs is really low, as is take-up.
A really big problem is a lack of standardisation, as Martin said. It makes it really difficult for people to work out what they are entitled to and to claim it. In water, there was a critical opportunity to deal with standardisation. A lot of organisations were calling for a single social tariff, and the Cunliffe Independent Water Commission also recommended that, but the Government decided not to move ahead with it at this stage. I think that was a really big missed opportunity.
In broadband, frankly, there is just a voluntary scheme. There is absolutely no incentive for telecoms companies—broadband companies—to get social tariffs right or promote them. They have done very little to promote the tariffs among their customers. There is also a slight issue with broadband social tariffs in that people worry about speeds and about whether those products will be appropriate to meet their needs. We are suggesting that instead of a specific tariff, you could have a voucher for low-income consumers to use to offset the cost of a package that actually works for them.
At the moment, it is just really difficult for people. In energy, take-up of the warm home discount is around 70%. In broadband, take-up is less than 9%, and we have had these tariffs for a number of years now. Citizens Advice has been calling for them to be made mandatory for a long time, but at this point the voucher is probably the solution that we would go with for broadband.
Martin Lewis: Can I echo that? With broadband, the problem is absolutely the speed. A social tariff might be £20 a month for 75 megabits, but if you are a churner and willing to switch, you can get £13 a month for 150 megabits lasting a year and then you will have to change tariff again.
Again, each firm has totally different criteria. Usually, it is linked to universal credit, but some only give jobseekers free broadband for six months. There is no consistency, so you don’t have any competition between firms and you might have to switch firm to do it. The voluntary scheme, as always with self-regulation, leads to a huge variety and a lack of communication about it. I had not heard the voucher idea before—I think it is a very clever one.
Anne Pardoe: I will have to send it to you.
Martin Lewis: Thank you.
Q12 Chair: I do not necessarily need all three of you to answer, but on the back of Rachel’s question, could any of the utilities put more information on bills, whether they be paper or electronic, about things like social tariff availability, so that people are aware that if they are in trouble, these are the things they need to be looking out for?
Martin Lewis: I don’t think it would work, because people don’t read their bills. If we go back to the fact that 75% people are paying more because of the transparency situation, which is where I started, there is a “get out of jail free” card for companies, which is that if you are going to do a price hike above a price hike, or you are going to do non-notified price hikes—Sky opts out and doesn’t work within the system with everyone else; it has been allowed, basically, to totally bypass the transparency system—you can get people to leave 30 days after notification. Interestingly, it is 30 days after notification, not 30 days after your bill goes up, so you have that one quick window to leave. People do not leave in bulk, because they don’t read letters from their providers.
If you wanted it to be done properly, you would need interventionist schemes, not something on your bill. It needs to be a direct, manifest communication similar to firms’ marketing when they are trying to sell—when they actually want to communicate with you. It needs to be properly thought through and put on the same basis. Bills are big, complicated things that people do not understand anyway.
The slight danger is that, as I have seen in many sectors, firms add it to the bottom of the bill and say, “Well we’ve put it on the bottom of the bill—that’s what you wanted.” Nobody sees it, but now you have allowed them to tick the box to say that they have done it—but it doesn’t work. Intervention needs to be done on a much more proactive basis. It needs to be done in the same way that firms sell. This needs to be sold to customers in the same way that firms are trying to sell them other tariffs, and it needs to be done with a legitimiser from the regulator with proper communication: “You are entitled to this. This is an Ofcom, Ofgem or Ofwat scheme—you can go and look it up separately on the site—that means you are entitled to a tariff.” There has to be a whole different way of communicating to get it across.
Chair: That is very helpful. Thank you, Martin.
Q13 Tristan Osborne: You have already highlighted the fact that the regulatory environment is woeful. If four in 10 are not accessing social tariffs from water companies, and three in 10 from broadband companies, surely it is time to look at a different approach where the regulators actually have some teeth. Are there examples of European or other nations that have got this right or where there is just better access for vulnerable customers? What are they doing that we could be learning from?
Martin Lewis: I am hugely parochial and only do the UK, so I’m afraid I cannot answer your question.
Ali Bell: I am also extremely parochial and only do England and Wales. However, we see that more and more people are aware of the social tariffs in water in the last two or three years, which is partly because the bills are stinging more. There is also the cost of living crisis and the fact that someone is doing a lot of work to raise awareness of this. We found in our Water Matters survey this year that 56% of people are aware that there are social tariffs out there to help them.
We are not convinced that it is the economic regulator’s job to market social tariffs. We do not necessarily think that is where customers would think to look for that. We agree totally with everybody that we need a single social tariff, but since 2024 Ofwat has had a customer-focused licence condition that says that a water company should provide “support for its customers who are struggling to pay, and for customers in debt.” We understand that Ofwat is going to use that customer-focused licence condition to look at the Tunbridge Wells incident at Christmas, when tens of thousands of people had no water. We would like to see Ofwat being much more proactive and curious in using that to make the water companies do this in a much more standard, business-as-usual way: “This should be the default of what we’re providing.”
We think the licence condition is really good. It is written really well. It is pretty comprehensive. But the way it gets used is just that, when there has been an incident, we look retrospectively at what happened. We think the regulator could use it to enforce: “This is the good practice that we want to see from you all, all the time.” There is something here; it is just not being used as much as it should be, or in the way that it perhaps could be, to improve things for vulnerable customers.
Q14 Sarah Green: Anne, this question is specifically about rising consumer debt in the energy sector. I am sure that your advisers are inundated with helping—do you call them clients?
Anne Pardoe: Clients, people—it depends on the context.
Sarah Green: Yes—the general public. What more do you think that Ofgem could or should be doing to help address that rising consumer debt?
Anne Pardoe: It’s a bit of a tricky one. Energy debt absolutely is a huge problem; it is rising far more quickly than it has in the past and has reached completely unmanageable levels. We have seen a 70% increase in the number of households in energy debt since 2021.
Q15 Sarah Green: How do you define energy debt? Is that just anyone who uses—
Anne Pardoe: That is people who are in arrears on their energy bill, so they have fallen behind on it.
The problem we have now is that there is this massive backstock of debt, which built up during the energy crisis, when prices rose really steeply. We have started to see those come down a little bit now, but we have this legacy of debt that the people who we help will really struggle to ever pay down, frankly, and then, even at the slightly lower levels, people are still not able to afford those debts, so they are still creeping up. You kind of have this dual problem.
Ofgem has been working on an energy debt write-off scheme, which we think is a really good idea. Although it will be funded primarily through people’s energy bills, frankly, that money is never going to be paid back because households simply cannot afford to pay it, so you are sending good money after bad and chasing that debt. What people need is a clean break. Unfortunately, that scheme has been delayed; it is stuck between Ofgem and the Government for sign-off. If that could be signed off as soon as possible, we think it would be a great step forward.
We also need to look at how we can help people to get back on top of those bills and be able to afford their ongoing consumption. That is where we get into things like reforming the warm home discount and looking at what more targeted support might be needed as the effects on the price cap of the crisis in Iran come through over the next six months or so. I would say that it is not something that just the regulator can fix; it is very much a societal problem. Ofgem for sure has a part to play in this, but it really is a problem that the Government equally needs to grapple with, because Ofgem cannot fix the societal issue of people not being able to afford their essentials.
Q16 Sarah Green: Martin, do you have a perspective you want to share?
Martin Lewis: I agree with pretty much everything that was said there. I think this is one area in which Ofgem has been working very hard and has some pretty decent solutions. I agree with the whole point about the people who can’t pay, and trying to push them to pay and spending resources to push them to pay. Actually, they need to pay their bills now. That is more important than the legacy debt from the energy crisis that we got there, which is how the scheme works.
There are small things that can be done. Moving house is a big reason that many people have energy debt, because they do not pay their final bill and it keeps languishing. Some of those people can pay their bills, but it seems to me that we do not have the technological solutions in place that make that work so it does not go on to everybody else’s bills when you move house and choose not to pay. The standing charge is also an issue, because it means that low users can’t cut their bills.
I still think that, although it has got better, we have problems with unfair direct debits. I get a huge number of complaints from people who have had their direct debit go up 70% when nothing has changed and they are in credit. It amazes me that companies’ systems are simply not good enough. I tell people to quote section 27 of their gas and electricity licence conditions, which says you need to have a fair direct debit and companies have to justify it to you, and they come back saying, “Oh, they’ve lowered it,” but there are all those people out there who they have not lowered it for and therefore have an interstitial cash-flow crisis, even though they will get the money back in the end, which can risk hurting the rest of their finances and knock them into water debt or other debt. That is all because their direct debit has been set too high and they are 80 years old, and they do not know that the company has just got its estimate wrong or its computer has a glitch on the back of it. I still think there are things that we could do on top of everything else out there. “Make the industry work as it should”—that would be the phrasing.
Q17 Mr Betts: We have explored quite a lot of the problems, and maybe some potential solutions, but I have a nice, simple question for each of you to finish with: what is one thing the regulators could do to improve outcomes, particularly for consumers in financially vulnerable circumstances?
Anne Pardoe: A really quick win would be a multi-sector priority services register. As Martin talked about earlier, rather than your having to contact every single utility that you have when you have an additional need and you need help, a version of Tell Us Once would be incredibly helpful.
Sorry, I am going to sneakily ask for two things. As we have talked about, and as Martin talked about eloquently, these markets are so complex, so we cannot underestimate the value of independent advice. I am Citizens Advice, and I would say that, but our energy advice delivers £25 million-worth of benefits to energy consumers each year because we are the statutory advice provider. That provision does not currently exist in the telecoms sector, and people are really missing out in an area that is incredibly complex. People have problems and need help, so we would also call for statutory advice and advocacy within the telecoms sector.
Q18 Mr Betts: Would that mean payment to you from the companies?
Anne Pardoe: It would not necessarily be Citizens Advice.
Mr Betts: Who else, then?
Anne Pardoe: I think that we could do a good job of it, for sure. With a levy on the energy industry of about 2p per household per year, we deliver benefits of £25 million just through our advice, and we are a really strong voice for consumers in the room when decisions are made, so we more than pay for ourselves.
I think it is less about which organisation it would be and more about there being a really key gap within an essential market. In water, the role is fulfilled by CCW, in energy and post, we fulfil it, and you have Transport Focus. Across a wide range of essential markets, you have such provisions, but in the telecoms market it is completely absent, which is a really big gap.
Martin Lewis: I mentioned cutting the standing charge and banning mid-contract price hikes above inflation—which I think is such an easy win—and a universal social tariff, so I will not mention any of those again.
Mr Betts: That’s cheating!
Chair: Three bites at the cherry.
Martin Lewis: Yes—sorry. I am going to give a slightly different example, so that it is not something I have said before; it is about something I think is endemic. Most consumers I deal with are not vulnerable. I say, “When you come to the end of your contract on your broadband, mobile bill, digital television, roadside recovery or whatever it is, if you want to stay where you are, haggle.” Over 80% of people who haggle on breakdown cover succeed; not quite as many—60% to 70%—succeed on broadband and mobile deals at the end of their contract. When you have a mental health condition or you are vulnerable, you are not haggling, so you are just lost. There is an unequal market out there, with an information inequality. The bizarre thing is, when I listen to my wonderful peers who are sitting alongside me, they are dealing with vulnerable people who are struggling to access information, whereas people like me get all the best deals.
Q19 Mr Betts: How do you enforce that?
Martin Lewis: It is amazing that we’ve put in these social tariffs—albeit not in energy—to try to break that inequality, but then we still rely on people to claim them. The people who can claim them are the people who are not entitled to them, because that is the breakdown. So you have to work it in an entirely different way: they need to be given automatically. We need databases that show which people should go on to social tariffs. It is the same as we had with the bloody winter fuel payment. Pension credit is the most underclaimed benefit in the country. Why on earth was the winter fuel payment linked to it? Some 700,000 of the poorest pensioners in the country do not get pension credit, and we linked that crucial payment to it. We need to stop relying on vulnerable individuals to act like they are highly fluent middle-class churners like me.
Q20 Mr Betts: We get the intention: you have the social tariff, but how do the company know who it should be applied to?
Martin Lewis: If you had a centralised database of vulnerability in the first place, and they were tasked with doing the work and outreach in one centralised area to cut Government and regulatory business down, they could go and put people on those tariffs. I do not believe that anybody is going to object to being put on a social tariff that caps their bill without them asking for it.
Mr Betts: I want to know how the information is given if the customer does not voluntarily say.
Martin Lewis: We could start by joining up Government, because the Government have all that information available to them right now. They have people’s incomes. They have everything that is going on. There are hundreds of different ways. Allow me to go and talk to my team; we will come up with a mechanism and suggest something better, rather than come up with policy on the fly.
Mr Betts: Okay. That would be really helpful.
Ali Bell: When we do our debt assessments, we have seen some examples of water companies proactively putting people on payment schemes and tariffs that are better for them, without waiting to be asked. We think that is happening and it seems to be really working. We have also seen some water companies looking at credit reference agency data, so that before somebody goes into debt, they can contact them and help them. There are some really good examples of best practice out there, but I agree that it does not happen as standard and as one thing. On our wish list from CCW, we have been calling for a single social tariff since 2021. That is not my ask.
Martin talked about the practicalities of how it does not work. We totally agree with all of that, and we also think that it leaves social policy being set by the board of the water company. We do not think that is necessarily right, and we definitely do not think it is working. We would not say it was for the regulator to do that either. We want every water company to have a dedicated, specially trained expert extra care team or whatever you want to call them; we do not think that is necessarily for the regulator. We think that that would mean that customers were treated according to their needs and that people in the most need got specialised, dedicated expert help from people who understood how all your vulnerabilities intersect. That would be better for water companies as well as for customers, because if you could solve that first go, it would probably cut down on your repeat contact. That should probably be done by water companies.
We would ask the regulator to use the customer-focused licence condition much more proactively and with much more curiosity to make things happen as your baseline—your standard. This should be the default. All companies should be doing this for customers who are vulnerable, and not just waiting until there has been a massive incident that has caused loads of attention, and then using it to look at that.
Mr Betts: That was very helpful. Thank you.
Q21 Chair: I have one or two questions to finish up on. Should PSRs be seen as a gateway to reaching consumers with vulnerabilities?
Anne Pardoe: Yes, absolutely. Priority services registers are a really useful way for essential services providers to know who is likely to need more help in particular circumstances. It can be a useful way to identify who needs more support more broadly. Awareness of these schemes is currently really low and you have to go through the rigmarole of signing up to each one. I would like to see co-operation across the regulators to see if that data could be shared in a safe way and with people’s consent.
Our research also showed broad support among the population for a single priority service register. It just feels like quite a simple way to identify which people are more likely to need support. That might lead to more ways to identify those people eligible for social tariffs. I agree with Martin that the Government have all the data that you need. There are examples of data sharing in the energy market, for example. Much more consistency is needed, making it easier for people to get the support they need.
Ali Bell: On PSRs in water, we see a lot of confusion, with people assuming that it is a gateway. We think that is because of a lack of good, clear information. Only two in five people on a PSR have been contacted by their water company since they joined it, and 59% of PSR customers think that it means that, if there is an outage and there is no water, they will get their water back first. That is not automatically true. People are thinking, “Why didn’t I get my water?” That is not what being on the PSR means. Just over one in five think that it also means that they will get, as you were saying, automatically put on a beneficial tariff or a scheme that helps them, and that is not necessarily the same thing.
After the Tunbridge Wells incident at Christmas, we went back and did some research, and we found that half the people who were on the PSR did not receive the help they expected during that whole incident. What we feel is happening is that companies are building a list, but not really building those relationships. We often hear the company say things like: “Well, we gave out bottled water. We went round in a van and delivered bottled water to everybody who was on the PSR.” But we would say, “Why did you do that?” If you are a man who is 25, 6 foot 2 and deaf, you might well be on the PSR so that you can be communicated with in the way that is useful to you;, but you don’t necessarily need bottles of water brought round to your house ahead of somebody else. We also found in that incident that people who had huge mobility issues had had loads of massive bottles of water dumped at the end of their front path. They couldn’t bring that into the house, take it into the kitchen and get it up on the side.
So I think a PSR needs to be more than a list; it needs to be something that really understands: “Yes, this person is on this list. What do they actually need and what do they want?” I think there is an assumption: “Oh, that’s what you want and that’s what you need.” It needs to be a living thing that really understands people’s needs, instead of being a case of, “Oh yes, I've got a list and I’ve ticked this off and done the thing.”
Martin Lewis: There is one thing I would say about that, and it echoes what was said earlier. The problem is that the job of a company’s board is to make money for their shareholders in most cases. What we have to deal with is that they get too much discretion in how they internally operate what should be social policy on behalf of the nation. Actually, that should be something that is mandated either by Government or through regulators, and there should be specific ways and operating procedures to go there. But we don’t do that; we effectively subcontract this out to the private sector, and these companies are not there to—they are sitting at the board table and someone is regretfully having to tell them, “We need to meet these requirements,” and they are ducking. We all know—I work as part of a plc—that what the people at the top are doing is saying, “Are we meeting our targets at the moment?”, and those targets are financial targets. That is the problem, ultimately.
There are times when you need more proactive and prescriptive regulation about how things should operate, and there are times when you need policy-based regulation. When it comes to dealing with vulnerable customers where there are no competitive issues—and there aren’t competitive issues in this—you need to have more prescription about what should and shouldn’t be done. It’s a bit flaccid at the moment.
Q22 Chair: I have a final question, Martin. I loved your conversation with Clive about blue-skies thinking on how you can have a central source of vulnerable customers’ information so that each of the three kinds of utility company does not have to invent the wheel every time. Given your fantastic examples at the beginning of the different benefits and definitions of vulnerability, isn’t the first stage to agree what the definitions are? Which benefits enable you to qualify for these things and which don’t? Once you have that, you can have the central register, and then you can start to come up with perhaps even a prompt to customers as to whether they are eligible for a PSR or social tariff or not, rather than them having to claim from the individual utility and encounter all the problems that we have discussed today.
Martin Lewis: I think you could work it either way round. If you had a central register, even if it was fitting into differential policies, and the central register had the right data, in an AI world, it isn’t that difficult to match people to the policies.
We need to be realistic: it takes a long time to have a unified essential-services register, and I would go way beyond just the three sectors you are talking about; I think it needs to be far wider. It is a massive national project. I’ll be honest: I looked at whether I could do something as a charity, and once I started to look into it, I said, “This has to come from Government. It’s too big, and the data security issues are too big, for private individuals to do it.” The Money and Mental Health Policy Institute has done a paper on it and how you would do it, and I can get that submitted to you if that would be helpful.
Chair: It would. Thank you very much indeed. I will give the last word to Rupert Lowe.
Q23 Rupert Lowe: I have found what you are saying very interesting. This is not my area of expertise, but I am inclined to agree with you that we have the worst of all worlds here, with private monopolies reporting to boards of shareholders. This obviously does not apply to broadband, but how did the water corporations and power utilities deal with it when they were in public ownership? Did they pass the best rates on to everybody, or did they have differential charging? I suspect that a lot of this may have developed over time. It would be interesting to look at the fact that—as far as I can see from figure 2 of the Report—the CCW appears to be playing the role of ombudsman.
So does any of you know how this was dealt with previously? We have all this business of whether things have been disclosed or made easier to obtain. I agree with you that a lot of the people we are trying to help are not going to have the mental capacity or intellect to get the best rates. As you say, you are a chopper and a changer and a bobber and a weaver, and you can, but they may not be able to.
Martin Lewis: I am going to plead having been too young at the time, I am afraid. I am so sorry.
Rupert Lowe: Yes, you probably were. Does nobody else know how they dealt with it? Did they have a social responsibility?
Ali Bell: I am not sure. I think it would have been on rateable value to start with. These tariffs are newer, and metering and other things have come in after. My assumption is that it would have just been on the rateable value of your property.
Martin Lewis: Certainly on energy, the proportion of your income that it takes has grown substantially over the years, and especially in the previous few years. I think that the amount of attention it faces has changed, even from when I started back in 2000, after it was privatised. Energy bills were one of those pieces of housekeeping that I had to encourage people to do, because they were going to be saving 70 or 80 quid. Whereas now—unfortunately, the savings are not huge now, because of the market conditions—the bills are such a huge proportion of your budget. The typical use figure—the typical use figure is a bit of a myth—is £1,800, or dropping to £1,600 with the new figure. If you contrast that to the state pension, it is a huge proportion of what people have. I do not know the answer to your question, and I had best be honest about that, but I think that this has become more and more important.
Rupert Lowe: I am of adequate intelligence, and I run lots of businesses, but we find it very difficult, even in a business environment, to keep up with energy prices, in particular. We now have this underworld of people who have leapt up and who disintermediate between the energy companies and the end user. There has almost been a new market created.
Chair: Rupert, come on—the question.
Rupert Lowe: It is an interesting debate.
Chair: Okay. Anna has a quick question.
Q24 Anna Dixon: Martin, on mobile and broadband, I wondered if you had a view. This comes from my personal experience of my parents, who are 85 years old, although I would not call them vulnerable. They have had automatic renewals. They have had a huge exit fee when moving house, even though the provider could not provide services to the new house. A bill of £1,600 just dropped out of nowhere. They also kept being charged by a mobile provider for a handset which was long past paid for and they were not shifted to a pay-as-you-go tariff. There are a huge number of things that are ripping people off. What would you say to that?
Martin Lewis: I literally have a soapbox on my show, and I have got on my soapbox regarding all those issues. It tends to be resellers rather than main networks that do this. You can sign somebody up to a £35 a month tariff, of which £30 is effectively paying for the handset. After two years, you have paid off the handset, but they do not drop it, and you still pay £35. Effectively, it is a confusion tariff; it is outrageous.
There is also the whole way that if you move broadband, you do not have a right to cancel your contract. It should be pretty easy. You have a conveyancing solicitor when you move house, and those conveyancing solicitors can sign documents that say that you are entitled to your Lifetime ISA or Help to Buy ISA money. If broadband companies are so scared that someone might try and jemmy the system, we could just add that you need to get a note from your conveyancing solicitor to get out of the contract.
All of those are fundamentally unfair. But I go back to the fact that we now have a system where the regulator has regulated that companies can increase prices whenever they want mid-contract, as long as they tell you about it in advance. It is a bit like saying that if I came up to you in the street, it is fine for me to punch you in the face, as long as I told you about it beforehand. I do not think that is the right way.
I am now getting some flak because I am saying that providers should be allowed to increase rates by inflation mid-contract. Of course I don’t want that. Of course I think that a contract should be a contract on the price. But I am hearing arguments about investment, and I am also saying, “Well, that could slightly jemmy the marketplace, because they would have the provision too high in the first place in case costs went up.” The rule in my eyes is that there should be no real increase during contract, so you set it at CPI inflation—we all know what that means—and that would work.
Companies get away with too much, in a way that is anti-consumer. I hope that the regulator looks at those things, but they have been around a long time and have not been looked at yet.
Rachel Gilmour: A joint campaign for us, Anna.
Anna Dixon: Yes. Thank you.
Anne Pardoe: I totally agree with all that. With telecoms pricing, our research shows that the best deals are hidden. They are never advertised; you have to call up, haggle and say you will leave, and then you get them. For the ones that are there, our research shows that no one understands them; the ones on the website are too complicated. You then take a deal and the price goes up mid-contract anyway. Telecoms pricing is a mess.
Martin Lewis: I have a tiny disagreement, but not a proper one. They are not hidden; they are on MoneySavingExpert—this is not a plug. The reason they are on there is because our users are switchers. Those people, where there is an elasticity of demand, get cheaper prices.
All the comparison sites have the cheapest deals, and the cheapest deals are not done by cheaper tariffs but by a £150 Amazon voucher. If you do cheaper tariffs, the bigger companies effectively have to offer those to existing customers on their own website. You have the list price on your website, and then you come to a site like mine—I would say that we are the cheapest, but there you go—and we have better deals, but they are done by marketing incentives on top rather than reducing tariff prices; otherwise, you would have to offer this to existing customers. That is the way the marketplace works.
Those in the know get it a lot cheaper, and that is okay if we go back to legitimate and illegitimate victims. But the problem is that, when we are in the purview of vulnerable customers, they are illegitimate victims in my view.
Chair: Fantastic. I thank all three of you very much; this has been a tremendously informative session. We are really grateful to all three of you for spending time with us today. There was a quote from Martin: “Companies get away with too much.” I will ask the regulators about that in a minute.
Witnesses: Dame Melanie Dawes, Tim Jarvis and Chris Walters.
Q25 Chair: Welcome back to the Public Accounts Committee on 29 June 2026. We move on to our second panel. We have just heard from an excellent cast of witnesses about the challenges that many people face in accessing their water, energy and broadband services. The priority services register—PSR—was created to help those who may need extra support when engaging with these services. However, a survey reported by Citizens Advice in 2026 found that public awareness of the PSR system still remains low. Take-up has increased—in 2024-25, it stood at 34% in energy, but considerably lower, at 13%, in water—but remains below estimates that half of households might be eligible.
Today, we will be scrutinising what the regulators are trying to achieve in relation to consumer experience and companies’ communication with customers, as well as what they are doing to address high levels of consumer debt. We will also examine how regulators promote consistency of support to customers with additional communication, safety and access needs, and enable companies to prioritise support in the event of supply interruption, and we will press regulators to align their performance measurements with the experience of their consumers.
Without any further ado, I will ask everybody to introduce themselves, starting, please, with a long-time guest of this Committee, Dame Melanie Dawes.
Dame Melanie Dawes: Thank you, Sir Geoffrey. I am Melanie Dawes, the chief executive of Ofcom.
Chair: And before that, you were?
Dame Melanie Dawes: Permanent secretary at the Ministry for Housing, Communities and Local Government, where, as you say, I appeared many times before this Committee.
Chair: Well done. Tim, I understand you were once a Clerk and have also worked at the NAO, and now you are appearing before us, so congratulations: you’ve completed the PAC triumvirate. Would you like to introduce yourself, please?
Tim Jarvis: Thank you, Chair. I am Tim Jarvis, the chief executive of Ofgem.
Chair: And finally, but by no means least, Chris.
Chris Walters: Good afternoon, everyone. My name is Chris Walters and I am the chief executive of Ofwat.
Q26 Matt Turmaine: Good afternoon. We are going to start with a relatively broad question: what does a positive consumer experience for those in financially vulnerable circumstances look like in your sectors?
Tim Jarvis: For people in financially constrained circumstances in the energy sector—some of this will apply to all consumers and some will be specific to them—what we want to see is people billed accurately and on time. Then I think the important thing is that, when there is evidence that people are starting to struggle—for example, if they are missing direct debits or coming off direct debits—the supplier is intervening early and quickly, and in a sympathetic and empathetic way, with that customer. They should be made aware of support that is available to them to help them if they are struggling with their household finances. If they have got into debt, what is made available to them should be a reasonable way of trying to get that debt down and repay it according to an amount that they can afford. We have rules in place that seek to ensure that that is the service that customers get and that they get that support.
Dame Melanie Dawes: We would want to see financially vulnerable customers have as close an experience as they can to everybody else’s, assuming that that is a positive one. Overall customer satisfaction on broadband is 84%, and it is around 79% to 80% for vulnerable customers, so that is a bit lower but still quite high.
Broadband and mobile is a different market from water and energy—it is a very competitive market—so, above all else, we would want to see that there is a range of good deals out there for people, depending on their circumstances, that are affordable; that they can navigate the market as easily as possible; and that they can switch when they think that is the right way to get a better deal. But, particularly for those who are vulnerable for whatever reason, when something goes wrong, they should be treated fairly and kindly. We have requirements in our code about how that should look: customer contact needs to work and there need to be many options for how you can do it—email, phone, post or whatever.
Finally, I would add that I think there are special cases on the broadband side right now, including the switchover from the public switched telephone network, which is particularly important for elderly customers or anyone else on a care alarm. With the Government, we have a very close eye on all that—a requirement for any of the telecoms companies that have got something wrong to tell us immediately—and some very clear and specific rules about how that transition, which must happen, needs to be managed.
Chris Walters: There are three facets to what we are trying to do to achieve good outcomes for customers and customer experiences. Those are driven by: duties to customers, to protect their interests with good-quality and efficient services at a fair price, wherever appropriate, by promoting effective competition; ensuring that water companies properly carry out their statutory functions and are able to finance them; and securing the long-term resilience of water supplies and wastewater services, for example, by managing the impact of environmental pressures, population growth and customer behaviour.
The duties underpin everything that Ofwat does to drive positive outcomes for customers: our price reviews; our major water infrastructure programme; our monitoring, compliance and enforcement work; what we do on marketing and charging; and, in particular, our work on customer policy. Of particular relevance there are two things, one of which has already been mentioned. Since February 2024, there has been a dedicated condition in companies’ licences for customer care that is based on a number of principles. We have reporting and monitoring against those principles. We opened our first investigation under that condition into South East Water earlier this year. The second is the Water (Special Measures) Act 2025. Customer engagement and involvement rules under the Act came into effect on 1 April this year, with three criteria that, again, we monitor performance against.
The third of the three things is our own improvement of our understanding of customers’ experiences. There are three aspects to that: the research that we conduct as a regulator, with the Consumer Council for Water or Ofgem, for example; the regular contact that we have with customers—I spoke to a customer of Severn Trent about her debt journey last Thursday, for example—and the cross regulator work that we do as part of the UK regulators network with other regulators. Taken together, we think those things drive improvements in customers’ experiences.
Q27 Matt Turmaine: The Report seems to suggest that people who are in financially vulnerable circumstances report lower-than-average satisfaction levels. I wonder whether each of you could say a little about why you think that might be.
Tim Jarvis: That is certainly correct in the energy sector. Over the past few years, we have seen a significant increase in the satisfaction of customers who are financially constrained. That has gone up by about 10% over the past few years. It still lags behind the customer satisfaction of consumers overall by about the same amount.
There are a number of reasons for that. The obvious one, I suppose, is that customers who struggle with their bills and have fallen behind with them are probably unlikely to come away from a discussion with their supplier feeling positive about that, but I think more can be done. We have made a lot of changes to our rules, and we have worked hard with suppliers who have come a long way in recent years in improving that performance, but I think there is always more that they can do.
There is significant pressure on customers who are struggling financially and people are struggling with household bills across the piece. That is now crystallising quite a lot in energy, so I think the onus is on the energy sector, working with the Government and debt charities, to try to make sure that we are getting the right support to people to help them when they are in those situations.
Dame Melanie Dawes: Overall, as I was saying earlier, broadband satisfaction is about 84%, which is quite high, I think. It is about four percentage points lower for vulnerable customers, so it is lower, but it is still quite a high overall level. When you look at the data, the percentage of those who are actively dissatisfied is actually the same, for the vulnerable or the average customer, at 7%. There is something about that grey area in the middle, where people are not happy, but they are not actively dissatisfied in a way that I think would concern us more. But I am not being complacent here.
Why is it lower? Well, as Tim was saying, people are more likely to be struggling with bills. Overall in broadband and mobile, the debt numbers are much lower, because the bills are lower. I think that is partly why, and also because there are options to switch and so on. When we look at our broader customer satisfaction data, a lot of this comes down to how complaints are handled and how people feel they are treated when there is a problem. You have to look quite broadly across the data. We publish a very broad range of data on this—more, I think, than most other regulators—every two years. Our latest study is in fieldwork at the moment, and will come out next year.
Chris Walters: Customer satisfaction and trust in the water sector are not where I want them to be. That is driven in part by significant bill increases last year to pay for record levels of investment to safeguard the health of our waterways and to improve the resilience of our water supplies. The most recent wave of research we conducted with the Consumer Council for Water, which was published last week—the fieldwork took place in March this year—suggests that one in five customers are struggling to pay their water bills. That is a little higher than the last time we did the work—the fieldwork for that was in October 2025—and about the same as the survey before that, for which the fieldwork was in March 2025. It is a little too early to tell what effect—if any—those bill increases are having on satisfaction.
That said, one in three customers are aware of financial support—we want that to be higher—one in five have contacted their water companies about support, and one in 10 have received financial support. We have baselined companies’ management of debt for 2024-25, so that we can keep monitoring and reporting on it.
Q28 Chair: Chris, given the quite large increases in water bills, if one in five are struggling at the moment, is that not likely only to increase? What are you doing to address that?
Chris Walters: It is certainly a possibility. As I said, the latest customer research shows roughly equal numbers struggling in March of this year compared with March 2025, which is when the prices went up. But we are not complacent about that; those bill increases, to support record levels of investment, also came with more protection and more support for customers than ever before, so that customers’ money is ringfenced for investment or clawed back and returned to them if that investment is not realised.
We also incentivised water companies to more than double the support they give customers through social tariffs. Along with our new customer-focused licence condition, we are doing closer and more detailed monitoring of companies’ performance, and their performance with customers, than ever before.
Q29 Catherine McKinnell: I want to ask about consumer experience. The suggested framing of this question is, “What are doing to ensure that consumers have similar experiences?” However, I would frame it as, “What are you doing to ensure that consumers have better experiences?” The fact is that at the moment a huge number of consumers are not having good experiences with any of the providers that you are here to regulate. What are you doing to improve consumer experience?
Chris Walters: I would mention the conversation that I had with a customer of Severn Trent last week. She lives in Nottingham, and she gave me permission to share her story with you. This relates to customer support for debt and repayment in particular, which I think is quite a totemic issue. She has been enrolled on Severn Trent’s Big Difference scheme, which is a social tariff that provides a discount of around £400 a year for eligible customers.
She had been struggling to keep up with her water bills since the start of what she called the cost of living crisis. She fell into arrears and proactively contacted her water company. When she reached out for support, she did not have to tell her story more than once, and she was immediately placed on the scheme. The discount has helped her to clear her arrears. She is now able to manage her payments and keep up with her bills.
Severn Trent also offered her additional support—for example, it installed a device in her water tank to reduce the amount of water she uses when she flushes her toilet. This was the first time that she had experienced financial difficulties or fallen into debt—
Q30 Catherine McKinnell: Sorry to interrupt you. I appreciate that there will always be individual circumstances in which a customer may have had a good experience, but my question was about what you are doing to ensure that experience is improved overall; focusing on one consumer experience is not really going to address that. What are you doing to ensure that all customers, regardless of their circumstances, get good customer service?
Chris Walters: At the end of my conversation with Angela, the one piece of advice that she left me with was that we—and I specifically—should be doing more to share good practice like this. I agree with her and that is what I am doing today. Raising awareness of support for customers who are struggling with debt and of social tariffs, as well as showing good examples of support for customers experiencing difficult circumstances, is incredibly important.
Q31 Catherine McKinnell: The question is: why would that not happen for everybody who has an issue? Why is that not happening? Is it just that they do not know how to treat customers properly?
Rachel Gilmour: Yes.
Chris Walters: I think we heard from the earlier panel that awareness is an issue. A number of the criteria in the customer-focused licence condition speak to the requirement that companies have to be more proactive with their customers. We are closely monitoring performance against that customer-focused licence condition for exactly that reason—so that we can be confident that, as well as us giving examples of good practice for others to follow as the regulator, companies themselves are fulfilling their company licence obligations.
Q32 Catherine McKinnell: What are the consequences for water companies for not responding to consumers in the way that you would expect?
Chris Walters: If we have evidence that a company is not meeting any licence condition—not just this licence condition—we open an enforcement investigation. We aim to conclude those as soon as possible, often through the company offering us undertakings in lieu, as we say, of an enforcement order. That is the process.
Q33 Catherine McKinnell: Do you have examples of that happening?
Chris Walters: I am pleased to report that, with the customer-focused licence condition, we opened our first investigation in February into South East Water, following the outages in Tunbridge Wells, which were incredibly difficult—the footage was incredibly difficult to see. I visited Tunbridge Wells in April, and I heard first-hand accounts from customers. The level of frustration was visceral, so that is featured in our investigation.
Q34 Catherine McKinnell: Presumably, though, there is an objective standard; it is not based on the level of frustration of the individual customer. There must be an objective standard that they have fallen below for you to have opened that investigation. It sounds like the investigation is quite new.
Chris Walters: It is. Yes.
Catherine McKinnell: That hasn’t been regular in the past?
Chris Walters: It has not. That licence condition was new in February 2024. It has six principles for how we expect companies to communicate with customers. Those communications have to be proactive, contact with the company has to be easy, companies must show that they are learning from customer contact experiences and sharing that learning with customers; they must show that they support customers and fix the problems that they have; they must show that they understand their customers’ needs, especially the needs of vulnerable customers; and they must show that they are helping those who are struggling to pay.
Q35 Catherine McKinnell: Some of that sounds a little bit subjective in my view, but I appreciate that we cannot take all the time on water. In terms of the other provision, what are we doing to make sure customers have a good experience?
Dame Melanie Dawes: Each year at Ofcom we set out in our plan of work, which we consult on, what outcomes we are seeking for customers. At a very high level, what we are seeking first on the mobile and broadband side is that people get investment—that they get high-quality services to start with, which needs a lot of money being spent on fibre, for example, and to fill gaps in mobile coverage. Then we require those services to be secure against cyber-attack, which is increasingly important. There are a lot of rules on that that we monitor and enforce against
Reliability in the face of things like storms is another thing. We have a scheme for automatic compensation. When you have an outage, compensation comes in automatically, so people do not have to ask for it if they have not had their service delivered to them.
A lot of what is in the NAO Report is about how the market works at the consumer end when people are choosing a product and being billed. A lot of that is about choice. Again, in the context of broadband and mobile, which are very competitive markets with lots of different services on offer, it can be quite confusing, but in many ways that is quite good for the customer. This is about things being transparent.
We have introduced rules on mid-contract price rises where, you will not be surprised to hear, I take a slightly different view from Martin Lewis. I am very happy to talk about that if the Committee would like to explore it. It is about choice, but it is also about people being able to navigate as well as they can.
Finally, this is about fairness, and a lot of that comes into vulnerable customers, because anyone can be vulnerable in the moment if they have become financially at risk or if something has happened in their household—if they have been bereaved, for examples. A lot of the problems arise when somebody has a difficulty in their life and they need to be treated with fairness and kindness and respect by their telecoms provider, just as everybody else should be. Those are the things that we seek.
At Ofcom, we tend to produce a lot of data, scan that very actively, consult externally with experts very actively and then go in on specific issues that we believe matter in the moment. Mobile coverage is very much one of those right now, as is the switchover from the old public switched telephone network, which I was talking about earlier. We tend to direct our effort at whatever we think the problems that need fixing are.
Q36 Catherine McKinnell: Can I put a challenge to you on that digital switchover? One of the issues that Martin Lewis mentioned in his evidence was the frustration with standing charges in the energy sector. My impression—correct me if I am wrong—is that we are basically now introducing a standard charge for broadband access through that transfer to digital telephone. Even if you do not have a landline and do not use it, you have to pay a standing charge for a digital line.
I put that with you, because the risk is that it will go up and up to pay for the overall infrastructure, and I question why we are introducing a standing charge when that is a source of frustration in existing public provision where the market does not really meet the level of competition required to keep it under control. I wanted to put it on the record with you that that is a concern.
Dame Melanie Dawes: Absolutely. There are two things here. First, most broadband contracts these days do not vary depending on how much data you use. They used to: data was rationed, and you paid more to use more of it and less to use less of it. Now it is much more about paying more for speed, although, increasingly, the highest speeds are as cheap as the lowest speeds. If you like, the whole thing has become a standing charge. It does not matter how much you use, and that is very much the offer in the market.
The one exception to that is if you still have a landline phone, where you may pay both the standing charge and, sometimes, quite high rates. We have regulated to protect against that, but, weirdly, if you have migrated over to a broadband telephone line instead, you do not pay anything beyond your broadband charge, so you should not pay an extra—
Q37 Catherine McKinnell: So there is a standing charge for a digital phone line; you have to pay a minimum.
Dame Melanie Dawes: It is generally part of the broadband package these days, because there is not any additional infrastructure that goes with it any more.
Catherine McKinnell: Not in my experience.
Dame Melanie Dawes: We would be really happy to pick that up afterwards. It may be that somebody is still on a legacy landline that has not been properly switched off.
Catherine McKinnell: It may just be me.
Dame Melanie Dawes: Probably not. It may just be me not quite hearing the question.
Q38 Catherine McKinnell: I think we are digressing from the main consumer experience issue. One thing I noted from what you were saying is the amount of data you collect and analyse. I will come back to you later, Mr Walters, about data and Ofwat, because I understand that you are not so good at collecting data there. I’ll go now to Mr Jarvis.
Tim Jarvis: There are, broadly, three things we do as a regulator to try to drive up customer service, and they operate in a bit of a cycle. It is not a static thing, but we set the rules and outcomes we expect consumers to get, and we then monitor compliance against those. We monitor the data in a similar way to what Melanie just described to see what is happening at the individual firm level or for particular types of consumers. We then make sure that customers can get compensated; where appropriate, we have similar versions of automatic compensation for certain types of things to make sure that they do not have to go through a big process and there is automatic compensation. With more systematic things, we will take compliance action to drive up performance where we see particular companies operating below the standards we expect.
That approach has driven up customer satisfaction in energy quite significantly over the last few years; it is now at the highest level since we started measuring it. There is still loads to do; I think that you can still drive up performance more, particularly for those who are most vulnerable, as we have discussed. Those are the three broad things we do to drive up performance.
Q39 Catherine McKinnell: How are you driving up consumer experience, particularly for vulnerable customers, but also for all customers, given that there is a challenge with competition in the market?
Tim Jarvis: I will give a couple of examples. A few years ago, the average waiting time for people ringing up their energy supplier was around 18 minutes, just to get through to speak to somebody in the first place. This was at the height of the crisis when, to be fair, suppliers were being inundated with calls, but that was an unacceptably high level. We took compliance action against a specific firm in the industry because they were particular outliers. They not only improved their performance but other suppliers improved their performance on the back of that; those average wait figures are down to one and a half minutes now.
In other areas, we have set rules for vulnerable consumers to make sure that suppliers have different ways for customers to contact them. As we heard previously, some customers prefer to write and some prefer email or text, so we make sure that they have different ways of contact for the most vulnerable consumers.
We have seen improvements in customer satisfaction and, on that last point, I would draw a distinction between those who are financially vulnerable and those who are vulnerable for other reasons. In our sector, customer satisfaction among those on the priority services register is higher than everybody else’s. We are trying to drive it up for those customers who are struggling with their bills and are financially vulnerable.
Q40 Catherine McKinnell: That’s helpful. To come back to Ofwat, my understanding is that you do not collect data in the same way as Ofgem and Ofcom do. Why not? Are you going to do that? It would clearly be helpful in achieving what you are trying to achieve.
Chris Walters: It is true that we do not collect data in the same way. In my opening remarks I referred to the way we survey and collect information on customers more qualitatively than regular reporting, because our model of economic regulation is one where companies are financially incentivised to improve customer performance through a financial measure. That is the method we have used up to this point.
One of the recommendations of the Independent Water Commission report that is reflected in the Government’s White Paper and that might well be given effect by the forthcoming clean water Bill is to look again at how we incentivise customer services. We are working closely with the Government and DEFRA to give effect to that.
A second limb here, related to what Tim was saying about vulnerable customers, is the question of data sharing. All water companies do have data sharing agreements in place with their local electricity network and PSR data is being shared. We think what needs to happen next is further automation of that sharing to make it more systematic and to widen out the sharing to include energy suppliers and other providers. That is a complex task that the Department for Business and Trade is looking at and we and Ofgem are working closely with it on that.
Q41 Catherine McKinnell: I appreciate that we are short of time, but I do not really understand why you are not collecting the data. That does not really answer the question. I would have thought that if you wanted things to improve, you would need data to drive that. It does not really make sense.
Chris Walters: We agree, and one of the recommendations in the Independent Water Commission report is to do exactly that: to replace what was a financial incentive that did not require collecting specific data with that collection—
Q42 Catherine McKinnell: When will that happen?
Chris Walters: That is a matter for the Government and the clean water Bill.
Q43 Rachel Gilmour: I am going to ask about Ofgem, but I have to say to you, Mr Walters, that I spot a PR man when I see one. One swallow does not a summer make, and one lady from Nottingham does not make up for the hundreds of my constituents who have been struggling with South West Water, including one family who spent four years sweeping somebody else’s faeces out of their back garden. Anyway, we will move on to Ofgem.
Mr Jarvis, we all recognise that rising consumer debt in the energy sector, and indeed in other sectors, is unsurprisingly a problem in the circumstances in which we find ourselves. How are you addressing the practices in the energy industry that exacerbate consumer debt, which the previous panel referenced in passing rather than in depth? To follow on from that, how are you addressing practice in the energy industry to help introduce the debt relief scheme?
Tim Jarvis: To start with the things that are in our gift and in the control of suppliers, as I mentioned earlier we have done a lot to tighten our rules and monitor compliance on the accuracy of bills—making sure that people get accurate bills in a timely way is an ongoing process. That helps people to avoid getting into debt in the first place.
We have a specific focus at the moment on the home move process. As Martin Lewis referred to, suppliers estimate that around 20% to 30% of the debt arises through that process. That is at both ends of the process, both as people move out with debt and as people move into a property. The average waiting time for somebody to contact a supplier and set up an account is around 70 days now, so, at current energy prices, that person is already £300 in debt before we start. That is an area of significant focus for us. We are consulting at the moment on new rules and guidance in that space, because I think we can drive up performance there and help reduce that level of debt.
But I think sitting on top of that is a fundamental challenge: the data suggests that the main driver of the rise in energy debt is the size of the bill and people’s ability to pay. We have seen an increase in the number of people falling into debt and arrears of around 7%, but that is dwarfed by the amount that they are in debt. That suggests to us that it is largely the same people and the same households that are struggling, but their debt is going up because of the size of the energy bill.
That is an area where we would look to work with Government and debt charities to support households in energy debt. I think we are seeing a disproportionate amount of household debt in energy. There is a multitude of complex reasons for that, but it is something that we cannot solve on our own; we need to work with Government on it. You mentioned the debt relief scheme—
Rachel Gilmour: I was just coming to that; this takes us neatly on to the debt relief scheme.
Tim Jarvis: Absolutely. We have been concerned about energy debt for a while. We have worked with consumer groups and suppliers to try to develop a scheme that tackles the historical debt that people have built up, particularly during the crisis. Despite the support from Government, energy prices were so high, and they are still sitting on a lot of that debt.
We worked on a scheme to try to write some of that debt off. Effectively, that is about moving money between different types of consumers. That raises all sorts of questions about rights and responsibilities, and the transfer of money from one group of people to another. That is very much something that Government need to approve. Government are looking at that scheme in the context of any support that they might need to provide in the winter, depending on what happens in the middle east. That scheme is currently with the Government, to look at what might be made available to consumers to try to tackle some of that historical debt.
Q44 Rachel Gilmour: You must have had some data that you can feed into Government to advise them. I am sure you would never consider washing your hands and passing the buck, but I really hope that you might be a bit more proactive and punchy when you are dealing with the Government on debt relief.
Tim Jarvis: We have been very loud about debt and the need for debt relief, to be honest. We have developed this scheme, presented a huge amount of data and worked with Government on what we think is needed. I am very happy to be punchy on debt; I think it is important—it is the biggest challenge for the sector. But, for very good reasons, I cannot tax one group of consumers and give that money to another group of consumers. That is very much the role of—
Rachel Gilmour: Okay. Four out of 10 as a starter. See you here next year.
Q45 Chair: It falls to me now to ask a fairly simple question of all three of you: why are companies not directing customers to the relevant alternative dispute resolution service when they want to complain? Equally, why are you not using those resolution services to collect data, understand and address the barriers to the complaints processes?
Tim Jarvis: We have a very close relationship with the ombudsman, and we use their data and insight about people’s experience when they are raising a complaint. We use that to play back into our rules and how we monitor.
I think you are quite right about the signposting to alternative dispute resolution; that has not been as good as it should be. We have worked with the supplier on its processes, supporting a trial with it to improve the referral process, and we have been taking action with individual suppliers, getting them all on improvement plans to improve their signposting. I think the worst performing has just increased by around 20%, so we have pushed that number up, but it is still too low to be honest, and we are still working with suppliers to improve the way that they signpost people to the ombudsman.
The Government are also looking at the rules around the ombudsman. They are proposing to reduce the time before somebody can go to an ombudsman. They are also looking at trialling automatic referrals, to speed up that process and make it easier for people.
Dame Melanie Dawes: The NAO Report flagged a couple of things, which was very helpful, and they came out of our published data last year. I think 64% of those complaining about broadband were satisfied that the contact details were easy to find. We went into the companies and got some improvements to training in call centres on the difference between a query and a complaint, and different signposting on websites and on bills—we have gone in on those specifics. There was also a specific issue with one of the adjudicators feeling that they were not being properly referred to by one of the companies. We went in specifically with that company.
More broadly, we have just done a review of alternative dispute resolution. I think we are the first regulator to do so. We have just cut, from eight to six, the number of weeks after which, if your complaint has not been resolved to your dissatisfaction, you can go to the ADR service. About 15 years ago, it was 12 weeks. We cut it to eight, and now, with digital communications and speed, we think six is appropriate. There is a bunch of customers who wait that final two weeks, and nothing happens. They should be able to move straight to ADR. We have just done that and will monitor it.
The final thing to say is that we at Ofcom have our own small but rather brilliant contact centre based in Warrington. The public can call and complain to us about anything they like. We cannot always deal with their specific complaint. Sometimes, we get issues with TV programmes and broadband all on the same phone call, but we do use that data. In fact, we are just concluding—I hope we will be announcing this in the next week or two—a pretty significant investigation into customer service at Virgin Media and O2. It looks at many aspects of call handling, whether people were allowed easily to leave with contract when they wanted to, and whether they were referred to alternative dispute resolution. We use all the tools at our disposal. We are changing the rules, monitoring and taking enforcement action when we need to. We will write to the Committee when that is concluded.
Q46 Chair: That is very helpful. Chris, what is happening in the water industry?
Chris Walters: The Consumer Council for Water provides those services. We work very closely with CCW, as you heard in the last panel, particularly on customer research to better understand the customer journey. The dedicated condition in companies’ licences for customer care has principles that strengthen that. The forthcoming clean water Bill and the proposals in the Government’s White Paper will go further, and I think that will strengthen customer representation.
In addition, the relevant measures in the Water (Special Measures) Act, which came into force on 1 April this year, stipulate that water company decisions have to be informed by customers’ views, decision-making arrangements in companies have to involve customers, and companies must demonstrate that they understand the impact of their past decisions on customers. I think that strengthens the redress route that customers have. We receive around 300 direct contacts from customers every month. My excellent customer inquiries team does its best to direct customers to the right source of information for them.
Q47 Chair: Why are you not using the data that dispute resolution services collect to understand and address the barriers to the complaints process?
Chris Walters: We are beginning to use the data from the CCW now. As I set out earlier, the direct measures of experience in our current system have been less relevant to us. One of the recommendations of the Independent Water Commission report, as captured in the White Paper—and as I imagine will be taken forward in the clean water Bill—is to think again about how customer experience is incentivised in the water industry, to move away from that more arm’s length financial incentive.
Q48 Chair: Melanie answered the question about data a bit. Tim, you did not really talk about using the data.
Tim Jarvis: We have a close relationship with the ombudsman and use its data to flag issues. It is part of our horizon scanning. We work closely with it and monitor areas. If we are seeing spikes in certain types of complaints, we will start compliance action on the back of that data.
Q49 Sarah Olney: Chris, I was interested to see in the Report that Ofwat has not been monitoring for very long at all the amount that customers owe to water companies—only since 2023-24. Yet by 2025, customer debt to water companies totalled £2.9 billion, which is an extremely significant sum. Just over 4 million household accounts were in debt. Given that Ofwat has not been monitoring the level of consumer debt for very long, what are you able to tell us about what the drivers of consumer debt in the water sector are?
Chris Walters: The monitoring that we started was built on guidelines that we published in May 2022, in the expectation that water bills were going to rise in the last price review, which they did, and on our December 2023 publication on customer vulnerability—they underpin our dedicated customer condition. In expectation of that, we began monitoring customer data, as you said. We published our first monitoring of that in the January 2025 analysis of household debt, which was reflected in the NAO Report. It showed that 8% of households were in arrears by around £800.
One in three customers in arrears are enrolled on repayment plans. Those customers have lower arrears, so when the customer is enrolled on a payment plan, it works. Our ninth wave of customer research, joint with the Consumer Council for Water, was published last week; I touched on that earlier. In addition to that, we are engaged in cross-regulator horizon scanning through the UK regulator.
Q50 Sarah Olney: My question was about what causes customers to get into debt with their water companies.
Chris Walters: The evidence in the cost of living report suggests that it is seen as a wider part of the cost of living crisis, even though water bills can be quite modest in comparison with other utilities. Over half of customers report that they are struggling to pay bills, including water bills. It is difficult to identify a separate driver—
Sarah Olney: So there is no water-specific reason?
Chris Walters: Not on the basis of the research that we currently have. We must continue to look at that, especially in view of the significant bill increases from April last year.
Q51 Sarah Olney: Are you expecting further significant rises this year?
Chris Walters: The profile of bills for the current five-year period from 2025 to 2030 is set out, save for additions for inflation. They vary from one area of the country to another—quite significantly, in some cases—but in broadbrush terms, customer bills are now set for a roughly five-year period. For the next five-year period, it is not possible to say what bill increases are going to be, because they will be determined by the amount of investment that is needed, and it is just too early to know that.
Q52 Sarah Olney: In your earlier answer, you said that only one in three customers who were in arrears were on a repayment plan, and that, where customers are on a repayment plan, their arrears are lower. What are you doing to work with the water companies to make sure that more people get on to those repayment plans, and does the regulator think that the repayment plans are sufficient in their current form?
Chris Walters: In tandem with the bill increases to support record levels of investments, companies doubled the number of households eligible for financial support from 4% to 9% to give more protection to customers. Using the new customer-focused licence conditions that we have had since 2024, we can and will push companies to do more to raise awareness of the support available for customers. We will actively monitor companies to ensure that they are communicating proactively with their customers, and—
Q53 Sarah Olney: Will there be penalties if you think that they are not doing enough?
Chris Walters: As with any licence condition, if we identify a breach, a company can be fined up to 10% of its turnover; it can offer us undertakings in lieu of that fine. It is important to note that fines are not paid by customers. They do not show up on customer bills; they are paid by companies and investors.
Q54 Sarah Olney: I will stick with you, Chris. I have a few questions about the priority services register. We know from the Report that there are 30 “needs codes” describing characteristics that would “make a customer eligible” to go on the register. What lessons have you learned about the PSR process on customers with extra communication, access or safety needs?
Chris Walters: We published pilot research in understanding customers’ PSR journeys in 2024. We followed that up by doing full research with Tim and Ofgem on the experiences of customers in vulnerable circumstances. That research led to our 2024 PSR standards and guidance, which took effect on 1 April 2025. I would be happy to write to the Committee with details of that research.
Our October 2025 research confirmed that the reach of the water sector’s PSR is improving, from 2% to 13% of household bills. I accept that that is low compared with energy and we need to do more about that, especially because we found that about 50% of households may be eligible to be on their company’s PSR but are not. The eligibility criteria are very broad. Being a pensioner is one of them, but clearly not all pensioners require that kind of help.
The growth in the number of customers on a water company’s PSR has to happen sustainably and must prioritise the households that really need the support. Offers of support must be actionable through a company’s operations, and we must monitor that against the customer-focused licence condition and take action where that is not the case.
Not being on the PSR before an incident occurs does not mean that a customer does not get help. When incidents begin, customers often self-declare as needing help, and companies should do their best to support that. Again, as a backstop we have a licence condition that we can use to enforce that.
Q55 Sarah Olney: Can I give a particular example of an incident that we heard about in our pre-panel. I am sure that I need not remind you that a big water outage occurred in Tunbridge Wells before Christmas. We heard about water companies delivering water, presumably in large plastic bottles, to people in vulnerable situations and on the PSR, but those large deliveries were left at the end of the driveways for people with mobility issues. Clearly, that was no good for them. What is Ofwat doing to encourage water companies, when they are operating their PSR, to think about those customers’ needs and how to respond properly to them?
Chris Walters: That particular example is entirely consistent with the other evidence that we gathered, which led to us opening the investigation into South East Water. Since South East Water’s appearance before the Environment, Food and Rural Affairs Committee, it has pivoted its approach to us as the regulator. I am confident that the company will offer undertakings to resolve that problem.
That kind of enforcement is a backstop. We would much rather that companies behave more proactively towards—
Q56 Sarah Olney: Sorry to interrupt you, but you mentioned earlier that you have issued guidance to water companies about PSRs. Does that particular example highlighted to us go against the guidance that you have issued?
Chris Walters: Yes, it does. Again, it is an ongoing investigation so there is a limit to how much I can say, but examples like that are consistent with the evidence that we have gathered. As I said, I think the company’s stance towards its regulator has changed, and I anticipate being able to get a resolution to that issue sooner rather than later.
I was going to come on to talk about the customer engagement and involvement rules in the Water (Special Measures) Act, which came into force on 1 April 2026. Those rules mean that companies now have to demonstrate to us that their decisions are informed by customers’ views, so that customers understand what companies are doing; that the decision-making arrangements within the company involve customers; and that they demonstrate to the regulator and customers that they understand the impact of their past decisions on customers. That gives the customer a much louder voice in the company’s decision making, which is backed up by the customer-focused licence condition and the enforcement action that can follow.
Q57 Sarah Olney: Tim, I want to ask you some similar questions about how the PSRs work in the energy sector. What lessons has Ofgem learned about operating the PSRs?
Tim Jarvis: We have been pretty successful at getting people on to the PSR and increasing the proportion and numbers on it. The PSR was originally set up to address concerns about people who are vulnerable during some sort of outrage, particularly electricity. It still broadly works for that purpose. The challenge is whether it is that helpful for identifying people who are financially vulnerable. The conflation of the two is not super helpful.
A supplier might get somebody on to the priority services register because they have young children, for instance. That is important in the event of a power outage, because you want to make sure that that household is not in trouble as a result of the power going out. However, it is not necessarily very helpful in identifying whether that person is able to pay their bill or is struggling with other household bills.
We work closely with other regulators and are supportive of the Government’s work to get a single PSR—I think that is helpful. However, there is a more fundamental question about what we want to use it for and where it is most useful.
Q58 Sarah Olney: That’s interesting, but do you find that Ofgem’s advice to energy companies around the PSR is focused on vulnerability in the event of an outage?
Tim Jarvis: We focus on making sure that suppliers make a point of asking customers questions that will establish whether they are eligible to go on to the PSR and then putting them on it if they are. We push that hard, we monitor closely and we have driven up performance in that sector. Those people are then flagged on their systems and with the distribution company if the supply goes down.
Q59 Sarah Olney: What are you doing to ensure that you have consistent application of PSR across energy companies?
Tim Jarvis: We are consistent in terms of the identification of people who are eligible to go on it. There are quite clear needs codes that are applied, and there are questions that suppliers can ask to make sure that people go on it. In that sense, it is consistent.
There is then the question of what that means for that individual consumer. There is an overlap between some of these things. For example, if somebody is hard of hearing, they might need a different way to be contacted, and there are requirements on suppliers to find ways to make sure they can meet the needs of that particular consumer. When it comes to the distribution companies, the identity of those people is flagged so that, in the event of an outage, they can contact them and identify whether they need help.
Q60 Sarah Olney: I cannot remember whether it was you or Mr Walters who said earlier that close to 50% of customers are now on the PSR. However, in the event of an outage, how can you use the PSR to identify those people most immediately in urgent need? I am thinking of somebody on a dialysis machine or something like that, who would urgently need support, as opposed to people whose needs are important but less urgent.
Tim Jarvis: That is one of the challenges. There are needs codes, so there should be codes for people on dialysis or people who need stair lifts, hoists or electric beds, who face a particular issue if there is a power outage. Those codes should be recorded with the priority services register so that suppliers know what the issue is.
Q61 Sarah Olney: The same question to Chris: given the way the PSR is structured, with the needs codes, are you confident that in the event of an outage—you have had quite a bit of experience of those recently—the right people are getting the right support at the right time?
Chris Walters: That information is captured in the needs codes in the way that Tim explained. It is the responsibility of the water company to do that prioritisation, and it is our responsibility to incentivise them to do that and to hold them to account if they do not, in a very similar way to what happens in energy.
Q62 Chair: I have a question arising from Sarah’s question to Chris. I think I heard you say that 17% of customers are currently on a PSR, and you estimate that as many as 50% could be eligible. Is that correct?
Chris Walters: The number of customers on a PSR has gone up from 2% to 13%, not 17%.
Q63 Chair: Thirteen per cent? So it is even bigger than I thought. There is a lot of work to be done. You said that you would be pressing the water companies to publicise this fact. Can you put a little bit of meat on those bones, because that really is not a great situation. Can I give you an example? When the gambling industry were worried about addiction, they made the gambling companies, in their adverts, actually advertise the existence of GambleAware—so much so that the gambling companies now make a virtue out of necessity, and every time they advertise, they advertise the fact that you shouldn’t be gambling so long or so much, or should have a break or whatever. What more are you really going to do in the water industry to resolve this issue?
Chris Walters: When I described the customer-focused licence condition that companies now have, as of February 2024, I talked about six different principles. Those principles are specific enough for us to be able to be more directive about what we think companies should be doing, and we are doing that. We can also hold them to account against that customer-focused licence condition.
I also mentioned the provisions in the Water (Special Measures) Act on customer involvement and engagement, which gives customers more of a voice inside the company. We are pushing companies hard to do this. You heard in the earlier panel the view of the CCW that they would like us to push even harder. I hear that loud and clear. It is something that we are considering.
Chair: I think this Committee will also be pushing you in that direction, but we’ll wait and see.
Chris Walters: Understood.
Q64 Anna Dixon: Melanie, I think you were saying earlier that levels of debt in the mobile and broadband sector are generally lower, but from the pre-panel we were hearing that there is currently no statutory advice service or debt counselling service for broadband and mobile customers, in the way there is the CCW and Citizens Advice for energy. Would you be supportive of more statutory advice and support being available for customers who find themselves in debt or in more challenging circumstances?
Dame Melanie Dawes: That would be a decision for the Government. It is a question, really, of where you think the biggest problems are that need to be fixed. I have experienced enough NAO Reports on organisations I have led to know there are always some things in there that you didn’t know and that you want to follow up, and we want to follow up on disconnections, which is related, because the numbers seem on the high side, at 1% every six months. We just don’t know whether that is customers deciding to disconnect when they move house, with maybe a month of debt—it may not be particularly serious, but they might get a credit rating that they don’t want—or whether it is more about the way companies are behaving. So we are going to look into that.
When it comes to debt, we will uncover a little bit more insight through the work on that. I would say, and it came out in the earlier part of the session, that social tariffs are probably the area where we would push harder, although there are consequences. If you get very widespread adoption of social tariffs, you will almost certainly increase bills elsewhere, because companies will respond. You push the balloon too far in one direction and it pops out in another. But that would be my suggestion there.
Q65 Anna Dixon: It is perhaps clearer here than in either of the other two sectors—although I may put this point to Tim as well—that the most engaged customers, switchers, are the ones who get the advantage. There is the idea that, for different reasons, some people—they may not be in vulnerable circumstances, and it might not be financial vulnerability—basically face barriers to switching. What are you as a regulator doing to try to make sure that you are protecting these people? I think Martin Lewis talked about there being something like legitimate or illegitimate reasons for these things; for me, it is probably because, as a parliamentarian, I am slightly time-poor and don’t get round to shopping around for my bills, but for others, and I gave the example of family members, this sort of switching is just not something they are confident doing. So how are you protecting people in that market and ensuring that those who are less engaged have similar protections to those you might call vulnerable?
Dame Melanie Dawes: Switching is important, and I think we have higher levels of switching than any other utility, because it is a much more competitive market; it’s really quite different. Just over a quarter of customers switch one or both of mobile and broadband every year, so switching is high. But you are absolutely right, and not everyone does it, clearly; three quarters of people don’t do it every year. So we do not over-rely on it.
Some of the things we have done in the last few years to increase protections include, for example, getting agreement on the practice that used to happen, whereby you would be left continuing to pay the amount that was for your phone as part of your monthly bill, even after you had already paid it off. We probably all know someone who has done that. I did it myself before I came to Ofcom. Then you realise that you have been paying this money that is just for nothing. We got a voluntary agreement on that a few years ago. If that is still happening—you suggested earlier it was—we are concerned about it and would want to hear about it. We have introduced end-of-contract notifications, which should now be standard across the industry so people know when their contract is coming up. We have also outlawed this inflation-plus mid-contract price rise.
Briefly, in response to Martin Lewis earlier, the context here is that broadband pricing is falling. A few years back, it would cost you 50 quid or so to get any kind of decent speed on fibre. Now, the average that people pay is more like £32 or £34 a month. But when you look at first-year discounts—I was checking this morning—I could get £22, £25, £28 for fibre at my home address for the first year. So that increase is on a heavily discounted price. I worry that if you flatten the increase, you get rid of the discounting. That is just a different kind of market; it is flatter and less dynamic. There are choices here, but that would be one consequence.
The other thing—I do not think people talk about this enough—is that if you still leave people on inflation-based increases, as Martin is suggesting, when you have Russia invading Ukraine or the current uncertainty about Iran and what that will do to energy prices and inflation this winter, you are leaving people once again at the mercy of something that our research showed they do not understand; people do not understand inflation or CPI and do not really know what they mean, so giving them an inflation-based contract is potentially not great for the majority of consumers. What I can say with certainty is that if you are already on one of those contracts, you do not have to worry about your mobile or broadband bill going up in a way you were not expecting next April if inflation goes up this winter.
Mobile and broadband are very dynamic; they are more complicated, in a way, than water and electricity, and we rely more on the market to serve consumers. The data we publish is company by company, which really focuses their minds on how they will benchmark. We drive that pretty hard. I am not complacent about there still being issues—I have mentioned some already—but we try to spot problems and go after them.
Q66 Anna Dixon: We touched a bit in relation to the other two sectors on levels of debt and repayment plans, but I want to push a little on the levels in water, which are still very low, with only 26% of households with water debt on a repayment plan. That seems very low. Forgive me if you feel you have already sufficiently answered this, but what more are you doing to make sure companies are proactively getting people on to repayment plans? Are those plans sufficiently affordable, so that it is in people’s interests to move on to them?
Chris Walters: Getting more customers on to the right repayment plans is a combination of two things I spoke about earlier: more of a customer voice in company decision making, because of the customer engagement provisions in the Water (Special Measures) Act, and the backstop I described, of us inserting a new condition into companies’ licences so they focus more on customers, and us taking enforcement decisions against them if they do not.
I also think it is incumbent on us and companies to share examples of best practice that are out there—I gave one earlier—just to raise awareness in the public as well. The combination of raising public awareness, having more of a customer voice in company decision making, and that legal backstop, which is prescriptive about how companies are supposed to engage with their customers, should be sufficient to drive improvements.
Q67 Anna Dixon: In the spirit of naming and shaming, if 26% is the average across the sector, what are the good and bad companies when it comes to repayment plans? What is the highest and lowest percentage you have?
Chris Walters: I do not have that information to hand. I would be happy to write back to the Committee.
Q68 Anna Dixon: Okay. That would be very useful. Obviously, Tim, it is a little higher in the energy sector, at 40%, but I presume that you are not being complacent and that you are ensuring the energy companies are not either. In terms of some of the customers on repayment plans, one of my constituents just had no hope of ever repaying on the state pension and pension credit. How are you making decisions to allow us, effectively, to get rid of debt if it is simply not ever going to be repaid, rather than having it hanging around people causing them ongoing stress?
Tim Jarvis: We have a model that is somewhere in between the two you have just heard about, in a sense. This is a competitive market, so if customers are not paying their bills, the suppliers are incentivised to get in touch with them and get them on to repayment plans. We certainly encourage them to do that, but they are also heavily incentivised to do it. We have rules that aim to ensure that those repayment plans are reasonable and that people are not asking for amounts that are unreasonable. We monitor that and we have taken action there.
But it is important to note that, while the supplier might be heavily incentivised to get people on a repayment plan, it takes both sides to engage on that. There are a number of challenges there. There is getting in touch with the customer and getting them to engage with their supplier. If people are in debt to their energy supplier, that tends to be the last person they want to contact, frankly. That is a big challenge.
We will always push suppliers to do as much as they can to engage their customers, and they are heavily incentivised to do so. But we have to accept that the rise in energy debt is not something that the suppliers are going to be able to solve on their own.
Q69 Anna Dixon: What I seem to be hearing in general is a lack of proactivity—a lack of clear communication. We heard that from the previous panel: bits of information hidden at the bottom of bills, people not being told what they are and are not able to access. Melanie, how confident are you where you have these voluntary agreements on things like end-of-contract notifications? Are you really monitoring that? What consequences are there if companies are not complying?
Dame Melanie Dawes: We absolutely monitor it. I was saying earlier that the data we publish in our various reports is company by company, as well as by the averages. The chief executives are well aware of where they benchmark compared to their competitors; they talk to me about it when our reports hit and they look into it.
Sometimes a voluntary approach is the right one, because it gets you there quicker. Sometimes we can go further than we can with our powers. Where we can, we will always do that. If we think that we need a rule, that is what we will do.
We have done quite a bit of work among ourselves and with the Financial Conduct Authority on customers in financial difficulty and on debt collection. We wrote to the various providers in our industries in 2023 and 2024 on each of those. We have tried to join up and make things a bit easier. I know that it can sometimes be difficult to see the different rules that are in place in different organisations, but we have consciously tried to address that. Given the complexities, there are always going to be some differences.
Q70 Anna Dixon: Would that be guidance in terms of bailiffs and debt collectors?
Dame Melanie Dawes: We have written letters to the companies in our sectors, setting out our expectations jointly, so that they can see that we are joining up and can see that demand. In 2023, that was on customers in financial difficulty, and in 2024, it was on debt collection. That was post Russia invading Ukraine and the cost of living crisis. We also have a leaflet on cost of living, which we make available to organisations like Citizens Advice and others who directly help consumers. Again, they can see what is there.
At Ofcom, we are significantly brushing up our website, which is great in some places and not so great in others. We will be launching what we are calling a customer hub on telecoms in the next few months to support people through this winter. That will help to make sure that people are aware of their rights, of how the rules work and of where they can get help and so on. That will, I hope, drop soon after the summer holidays.
Q71 Anna Dixon: It is good to hear that you have been working on the issue of affordability, but is there any guidance if people are indebted on their water bills, council tax and energy bills? Is accumulated debt considered when agreeing a repayment plan and assessing affordability? Tim, you are nodding.
Tim Jarvis: We have done a lot of work with debt charities on standardising the information that consumers can provide, so that we can make sure all the household finances and debt challenges are taken into account in repayment plans. Work on that is ongoing with debt charities.
Chair: I am going to appeal for short questions and short answers; the hour is getting quite late. As an exemplar of short questioning, Rupert Lowe.
Q72 Rupert Lowe: Well, you can chop me off if I ask something too long, Sir Geoffrey. Chris, where do customers, and particularly financially vulnerable customers, rank in the list of your priorities?
Chris Walters: Our primary duties are to customers. We have three customer-focused duties. They feature in all the tools that Ofwat has: our price reviews; our oversight and support for major water investment programmes; what we do around monitoring, casework and enforcement; what we do around markets and charging; but in particular what we do around customer policy, courtesy of the customer-focused licence condition that water companies have since February 2024 and of the provisions in the Water (Special Measures) Act on company engagement with customers. I think the customer interest is front and centre in the economic regulation of water and waste water services.
Q73 Rupert Lowe: Okay. If I look at figure 2, there is an Energy Ombudsman and a Communications Ombudsman; there does not appear to be an ombudsman for water. Is CCW performing that function?
Chris Walters: CCW is performing that function.
Rupert Lowe: It is performing the function of the ombudsman, is it?
Chris Walters: I think there is a complication around CCW’s performing of that function. It was until very recently performing that function, yes. I would be happy for either us or CCW to write back.
Q74 Rupert Lowe: Because the chap running it, Rob Wilson—as you know—is under investigation for fraud, as I understand it. When he was in Parliament, he claimed 9p for going 322 metres in a car journey. That does not fill me with huge confidence.
Chris Walters: I was unaware of that example.
Q75 Rupert Lowe: Well, it is in The Daily Telegraph. On that, I think I am right in saying that complaints to CCW for billing were up 63% and those for affordability were up 110%. Does that sound right to you?
Chris Walters: I think that, as a result of the pretty significant bill increases in April last year to fund record levels of investment, we were anticipating more customers contacting CCW with difficulties around—
Q76 Rupert Lowe: Is that right? It is hardly surprising given that the real cost of water is up 20% over the last four years. It is therefore disappointing to see that there is actually only a 13% take-up of the PSR; that does not reflect well on you, particularly when the Report tells us that up to 50% of households are in need of it.
Chris Walters: We welcome the NAO’s findings and we accept its recommendations, one of which is for us to try harder to improve that. As I said in answer to an earlier question, if 50% of households might be eligible to be on PSR and only 13% are, there is a gap in what companies are doing but also in what the regulator is doing in terms of raising awareness—I accept that.
Q77 Rupert Lowe: There is one other thing that I would like to clear up with you. Am I right in saying that under your permitted “Paying Fair” rules bailiffs are an acceptable way to proceed, because it appears that the use of bailiffs is on the increase, not the decrease?
Chris Walters: Our “Paying Fair” guidelines set out principles and minimum expectations for services. They do have criteria around bailiffs. There was an increase in the use of bailiffs—
Rupert Lowe: Are you increasingly using bailiffs?
Chris Walters: Ofwat does not use bailiffs.
Rupert Lowe: Are they being increasingly used by the industry?
Chris Walters: There was an increase in bailiff use after the pandemic.
Rupert Lowe: You should have an interest in that, shouldn’t you? You may not be actually doing it yourself but you should have an interest in it.
Chris Walters: We do have an interest in that, precisely because our “Paying Fair” guidelines have requirements about how we treat customers in debt: companies should be “clear, courteous and non-threatening to customers”; all communications should be designed around customer need; “fair tools” should be used and not, for example, threatening to disconnect; customers cannot be disconnected from water and waste water services; companies must not use “void property notices…as a debt collection tool” and “enforcement action”—bailiffs—should be used only “as a last resort, once all other options for repayment have been exhausted.” Those “Paying Fair” guidelines are now enshrined in that customer-focused licence condition I talked about. We are monitoring that much more actively and if we find bad practices, we will not hesitate to use those powers and take enforcement action against companies.
Q78 Rupert Lowe: In my opinion, until you’ve got the number of people who are actually on the PSR up, bailiffs should be used sparingly and only for good reason. I think my colleagues have quite ably underlined the need for you to make sure that your customers do understand how they can apply for this financial help.
Chris Walters: We agree, and we intend to play our part in raising awareness for exactly that reason.
Q79 Rupert Lowe: Do you think it is wise that CCW is the ombudsman, effectively, for your industry? Do you have a view on that?
Chris Walters: I accept the premise of the question completely. It is vital, in my view, that there is a customer voice in company decision making that is backed by credible legal requirements. It is a matter for Government what form that voice takes in the new integrated regulator for England and a separate regulatory system for Wales. To my mind, it is crucial that there is a customer voice, but the form it takes is a matter for Government.
Q80 Mr Betts: Moving on to social tariffs regarding Ofwat and Ofcom, customers are entitled to them in certain circumstances, but millions entitled to them do not claim them. Is that your fault or the companies’ fault?
Dame Melanie Dawes: Over the last five years, and during covid, Ofcom has really leant into this. We got the number of offers out there in the industry up from three—there weren’t really any, frankly—to 20. We have seen take-up go from 5,000 a year to more than half a million a year, but it has got stuck at 8.5%, 9% or 9.5% over the last few years.
Awareness, again, was extremely low. It is now about a third, but it is not budging and getting any higher. We have talked to the Government and to the companies about this. We require good signposting on websites and so on about what is on offer. I think what Martin Lewis said earlier about price comparison sites is interesting, and we will follow that up—about whether we could talk to them about having social tariffs a bit more visible.
Fundamentally, what is now needed is for the Government’s insight into those who are eligible, particularly those who are on benefits via the Department for Work and Pensions, to think, “Actually, what would help to move the dial on this?” If the Government want to go further, I think we have to think more deeply about what is going on and why people are not taking them up.
We have done research on this: certainly on the mobile side, it is because there are very cheap offers available, particularly SIM-only, and it is less necessary for a lot of customers to have a social tariff. But on the broadband side, it is sometimes about people wanting to, for example, still have pay TV and broadband together. Most of the social tariffs are just broadband only, because they are designed to be that bit more basic.
Q81 Mr Betts: Whose responsibility would it be, then, to try to expand the range of tariffs to incorporate not just broadband?
Dame Melanie Dawes: If you wanted to make it a requirement on the industry, which is the case in some other European countries—there was a question about that earlier; some other European countries have a regulated social tariff—then that would be a decision for the Government.
If we are going to get much more progress here, it needs the Government’s insight and, if you like, machinery and perspective on what is going on with those customers. For us, our social tariffs are about benefits—that is where the eligibility comes from—so that would be very much the DWP. I think the Government Departments are talking to each other about that.
The only issue is that, if you push it very far, you will end up with the rest of the market probably paying higher prices at some point. Broadband and mobile are highly competitive; their margins are not—there is not a huge amount of slack in the system. If any of the companies were here, they would tell you that. We have unleashed huge competition on broadband in recent years, which is driving pricing down. So the more you support the more vulnerable financially, the more you may find that those who are on the next rung of the ladder might not be able to get quite the discounts.
That is why I think—as may have been said earlier—this is quite an important policy question, really, as to what kind of market you want.
Q82 Mr Betts: For Ofwat, it is different, isn’t it? There isn’t any competition, so people either have a social tariff or they pay more. Why, then, are you not doing more to make sure that social tariffs are more widely known?
Chris Walters: There is no competition in the household market, but there is competition for business retail. I know our focus today is the household market—
Mr Betts: Yes, but the social tariff is domestic, isn’t it?
Chris Walters: It is, yes. The social tariff is domestic. Unlike telecommunications and energy, there is no national market for water; there is no water grid. We have a series of regional monopolies.
Q83 Mr Betts: We understand that, but why are not more people who are entitled to social tariffs on them? That is surely a failure of yourself or the companies to make sure that people know about them, isn’t it?
Chris Walters: As a result of the last price review, the number of customers eligible for social tariffs was doubled by companies. All companies have increased their offering. As a result of the changes to the legislation and the customer licence that I talked about earlier, there is now more of a customer voice in company decision making, and there is now more of a legal backstop to ensure that—
Q84 Mr Betts: Okay, but there are still a lot of customers who are not aware of things that they should be entitled to. Whose failure is that?
Chris Walters: I accept that we, as the regulator, need to do more to raise awareness, as does the whole sector. As I have set out in answer to a number of previous questions, that is something we intend to do.
Q85 Mr Betts: Right. What is the timescale to do more?
Chris Walters: We are in the process of a transition programme, which is bringing together the functions of Ofwat with the Environment Agency, the Drinking Water Inspectorate and Natural England, while also establishing a separate system for Wales. A number of the recommendations around that talk to strengthening the customer voice, so changes to that process will be—
Mr Betts: So you will just wait for that reorganisation to improve the understanding of customers about entitlement to social tariffs.
Chris Walters: We continue to conduct research to understand customers.
Q86 Mr Betts: There are a lot of people out there who pay more than they need to. Whose job is it to make sure that they are aware of the social tariffs?
Chris Walters: It is the collective responsibility of the regulator and the water companies. We have the tools and the backing to give effect to that, and that is what we intend to do. We need to do this in parallel with work to establish a new integrated water regulator, precisely because a number of recommendations in the Independent Water Commission report and the water White Paper talk about strengthening the customer voice. Anything that we do collectively as a sector—the regulator and the companies—has to be consistent with the direction of travel for the new regulator. Those things have to be seen as two halves.
Q87 Mr Betts: So you do not have a timescale?
Chris Walters: The establishment of the new water regulator is a matter for Government.
Mr Betts: And you cannot do anything without changes?
Chris Walters: It is not that we cannot do anything.
Q88 Mr Betts: What can you do, then?
Chris Walters: What I have already set out is to raise awareness collectively, us and the companies.
Mr Betts: How?
Chris Walters: By using the powers that we have to encourage companies to be more proactive—
Q89 Mr Betts: Have you fined any company for not using its powers?
Chris Walters: Earlier this year we opened our first investigation under the customer-focused licence condition, into South East Water, and investigations are ongoing. As a result of South East Water appearing before the Environment, Food and Rural Affairs Select Committee, I am confident that it will come forward and engage with us in a better way. Some of the features of that investigation do speak to this issue. Research that we published with the Consumer Council for Water—I think the CCW mentioned this earlier—shows a very low level of satisfaction among South East Water customers with the communications that they receive from South East Water.
Mr Betts: So you have not actually fined any company for not doing what it should to make sure that people are aware of social tariffs that they might be entitled to.
Chris Walters: We have a first investigation under those new powers right now.
Mr Betts: But you have not fined any company yet?
Chris Walters: We have not completed any investigations, no.
Q90 Mr Betts: Do you think that is a mistake?
Chris Walters: I think we need to do more, and that is what we intend to do.
Q91 Rupert Lowe: You have 480 staff and a £30 million budget, so you have plenty of resource.
Chris Walters: We have the resource and we have the people. We are overseeing the delivery of record levels of investment including a £50 billion pipeline of 30 major water projects; we have open enforcement cases for a number of companies; we have responsibilities around markets and charging; and we are collaborating closely with the Departments, including DEFRA, and our fellow regulators as we move towards the establishment of a new integrated water regulator. We have a lot to do and we have the resources to do that. The question for us is how we prioritise within that envelope. Prioritising work on the customer-focused licence condition is something we will go away and consider.
Q92 Mr Betts: I have a follow-up question in parallel to that: can you explain to us what an equivalised income is?
Chris Walters: I can.
Mr Betts: So you are the other person who understands?
Chris Walters: I may be the other person who knows what that is. It is a way of normalising a household income to account for the composition and size of that household. If you have more than one earner in a house but no dependants, as opposed to having one owner with lots of dependants, you need to find a way to adjust for that when you consider the question of help for debt and vulnerability. That is what it is.
Q93 Mr Betts: Do you think it is a helpful concept?
Chris Walters: I think it could be explained more clearly.
Rupert Lowe: You need to use AI to find the definition.
Q94 Mr Betts: I think we might all agree with that point.
Tim Jarvis, you obviously do not have social tariffs in the same way in your sector, but some companies do try to assist, with particular arrangements for poorer customers—often with different tariffs—that they do themselves. Is any part of your job to ask companies that do not use those arrangements to look at their competitors and say, “They can do it. Why can’t you?”
Tim Jarvis: Yes, and we do do that. We work with the body that represents energy retailers to try to encourage best practice. There is quite a lot of support out there from suppliers that, off their own bat, do things like debt matching, and help in the winter with electric blankets and things like that. But it is not a systemised form of support. We have long argued that there is a case for some targeted support for those households that are particularly struggling with their energy bills and have particularly high consumption, because if you do not target support in that way, you end up with a bit of a mismatch of support available.
Q95 Tristan Osborne: My question is mainly to Melanie, on the use of PSRs in the broadband space. I understand that the history of broadband is more recent. There is a different statutory history, a more complex market structure and a weaker tradition of disconnection protections. Broadband has only really become essential in my lifetime, in recent years; it did not exist when I was younger. However, it is now seen as an essential for many people, including those who need broadband to access health services or telecare services. It is also seen as essential for those needing to access their banks and other online provision, which we did not have 20 years ago. I suppose my first question is whether we need a PSR in the broadband sector, and do you support the DBT proposal to establish a multi-sector share once support register?
Dame Melanie Dawes: I think that could be really helpful. We do not have one in broadband and it would be a decision for the Government to put one in. Again, if the telecoms companies were here, they would say that they would like more help in working out who is vulnerable so that they can serve them better. Certainly, when it comes to the PSTN switch-off, we and the Government did a lot of work with, in that particular instance, social care and local authorities, because that is where the information about who is vulnerable to a migration of that particular technology is, because it is all about care alarms.
My one slight word of caution is that, for all our sectors, the relevant question can be a bit specific to the circumstances. Often the data will be held at a local level, particularly perhaps in the health system or the care system. It may or may not be held by the Government, so there is a question for the Government about what information that is generic is useful for everybody, such as people with long-standing conditions—who, under our rules, by the way, are required to be prioritised when there is a fault—and long-term conditions. Again, you can have that on a more national register, although it will vary. But there are specific, often quite time-limited circumstances that may need to come from other sources.
Can we do more here? Yes. I think it needs the Government to work out where they want to go and for what reasons, and we are very happy to play our part in that.
Q96 Tristan Osborne: Of course, one suggestion could be, given that you are saying that there is a lot of market fluidity—one in four people—that it is a standard question that could be asked when people register with a new provider: whether they consider themselves to be a vulnerable customer. They could then provide the details to you. GDPR would perhaps make it tricky for information to be shared between the public and private sectors, given that some of these might be health issues. I am trying to give a corporate solution to that.
Do we know what proportion of customers living with limiting conditions are aware of the additional support available from broadband companies?
Dame Melanie Dawes: No, I do not have that data in front of me. We have other data about how people with long-term conditions feel about their broadband service. As I said, satisfaction is a bit lower than average, but it is still on the high end. We keep quite a close eye on that, but I do not know the answer to that particular awareness question. If we have data, I am happy to share it.
Q97 Tristan Osborne: Okay. Lastly, one of the solutions that could cater for everyone is back-up connectivity when things go wrong—perhaps another provider stepping in if one provider goes wrong. That would be a solution for everyone, incidentally, not just for vulnerable people. Is the regulator potentially looking into a secondary option for people of back-up connectivity?
Dame Melanie Dawes: Yes, this is a question of what happens when people lose what are, as you say, now essential services: broadband and mobile. A lot of the time—not always—people’s broadband might be down, but they will still have a mobile phone signal and that will see them through, at least in the short term. But for some, if everything is out, they will not even have that, or they may not have it at their address.
We are doing a number of bits of work. First, as the regulator under the telecoms security Act, we have done quite a bit on guidance to the industry about appropriate back-up solutions, such as battery back-up. We have not recommended investment in masts for mobile, because that is really expensive—it is a decision that I think the Government would need to take.
More generally we have done quite a bit of work, including with Ofgem and the energy industry—again, ultimately, the Government need to lead this—to work out whether resilience plans are fit for the modern purpose when we have what is increasingly happening, which is storms and outages. Do we need to prioritise a bit more the connectivity that we all rely on, compared to where we would have been in the past?
That is very much a system question, and we will play our part in that as the regulator. There may be requirements on the industry that flow from that, but it is actually more about, for example, who do the energy companies prioritise for switching the lights back on? Which are the services that are needed most? That is a strategic question for Government.
Q98 Chair: On that question, is there a parallel here? If someone is wearing an emergency push button on their chest and they need to use it, is there a parallel with the 999 system—that they will still get the signal through, almost if everything else fails?
Dame Melanie Dawes: Yes, you are right that 999 is there. People do not always realise that they might not get a mobile phone signal, but actually they should be able to call 999 in an emergency. Could that work for care alarms? The problem is the technology. A lot of the time—particularly when dealing with the social care sector, I am afraid—it is very poorly resourced and it is not necessarily using the latest tech. I am not sure that there is a technical solution that allows you to call 999, to have that emergency back-up, unless you are using a phone signal. Increasingly, it is going to be a digital solution.
Q99 Chair: May I ask you to investigate that, because this could be a matter of life and death?
Dame Melanie Dawes: Yes, I am very happy to take that away immediately, and to ask my team to be a bit clearer than perhaps I have been about the technical issues, because I think there are probably quite a lot of technical issues. But we can give you a proper answer, and if we need to look into it further, we will.
Chair: There are no further questions. It has been a long session, and the hour is getting late. I thank the three of you very much. We have asked inquisitive and intrusive questions, because we are so keen to get to the bottom of all this, so thank you very much indeed. An uncorrected version of the transcript will be out in the next few days, following which we will produce a report with recommendations, which we hope you will look at carefully. Again, many thanks for coming to the Committee. We have benefited from your advice.