The socialisation of utilities refers to the large-scale transfer of privately owned assets into democratically governed and publicly owned institutions for the public good. The recent price increases from the energy sector have been a major challenge for those on low incomes and state retirement pensions which focus on the income side. Another approach might be to look at outgoings and introduce some control and stability of expenditure while creating a measure of wealth distribution.
It is especially harsh for retirees, as the state pension is relatively low. Pensions look only at the income side of the equation. Another approach might be to look at outgoings and introduce some control and stability of expenditure while creating a measure of wealth distribution.
Water: a human right and essential resource
To go back to basics: the United Nations recognises access to water as a human right:
The right to water entitles everyone to have access to sufficient, safe, acceptable, physically accessible, and affordable water for personal and domestic use.
Although cost is not mentioned here, affordability is highlighted, and the recent WASP action against Thames Water demonstrates that this is becoming an issue in the UK. A universal allowance per capita for basic utilities such as water and energy could be a viable solution.Looking at water as an example: the average person in the UK uses approximately 140 litres of water per day. In addition, the number of occupants in any household is typically known, either through the latest census or the electoral roll.
A tiered approach to basic utility allowances
The proposed concept involves installing water meters in all homes, with each household being permitted 140 litres of water per person per day, covered by (let’s call it) the Standing Charge (a minimum and flat rate per month). This amount would be universal per person. Each water company would then charge for consumption above the 140 litres per day (or the applicable monthly amount). However, the unit price payable for usage above the basic allowance should be tiered and based on a person’s ability to pay. One option would be to base the tiered unit price on the council tax bands. The unit price would increase according to the band the house fell into. Therefore, people living in a Band A house would pay a lower unit charge than those in a Band B house who would, in turn, pay less than people in Band C, and so forth. In this way, those living in the largest houses would pay most per unit.
The potential social and environmental benefits
Such a policy might have many knock-on benefits for society as a whole. It might encourage people to live in smaller homes, making better use of our limited building space, and it might encourage people to be more careful about their water consumption, which is becoming a valuable resource to conserve in the face of climate change.
In principle, the water consumption example given above could be extended to other key utilities, such as energy.
Similar data for the average usage of gas and electricity is readily available with the data in the table below being translated into the various council tax bands.
| Energy use | Example – home type and number of residents | Typical annual gas use (kWh) | Typical annual electricity use (kWh) | Typical annual electricity use (multi-rate, such as Economy 7) (kWh) |
| Low | Flat or 1-bedroom house; 1 to 2 people | 7,500 | 1,800 | 2,200 |
| Medium | 2-3 bedroom house; 2 to 3 people | 11,500 | 2,700 | 3,900 |
| High | 4+ bedroom home; 4 to 5 people | 17,000 | 4,100 | 6,700 |
Extending the concept to energy and other utilities
As with water meters, the rollout of smart meters makes it easy to measure household consumption. As well as the benefits of better management of these resources, such an approach to energy would also have the added benefit of removing the requirement of the winter fuel allowance – a great saving for a cash-strapped government. The unit price above the minimum allowance would be at the discretion of the appropriate energy provider, thus retaining the core element of competition and the ability for customers to switch suppliers if they so wished.
Socialising basic utilities in this way would encourage individuals to think more carefully about their personal usage by providing incentives and control over spending. Simply put, no one would be financially crippled by basic utility bills, but if someone chooses to consume more – such as by leaving a TV on in every room or washing their car every day – they could do so, but would pay for the privilege. Such an approach has both ‘green’ benefits by raising awareness of consumption and ensuring that those with more wealth also contribute more through their preference for larger houses and higher usage of these key resources.
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