HOUSEHOLDERS responsible for almost £1 billion in unpaid water bills face compulsory rationing under measures being considered by the Government. Up to 15 per cent of people refuse to pay and have pushed up bills for everyone else by £10 a year.

An estimated two thirds of those who fail to pay could easily find the money, according to a Parliamentary report published today. Included in its recommendations is a demand to introduce rationing for non-payers that could limit them to as little as two litres a day.

The level of non-payment was described as “astonishing” in the report on water management by the House of Lords Select Committee on Science and Technology. Members were “shocked” to learn that so many householders abuse the right of supply enshrined in the Water Industry Act 1999 that banned disconnections.

“The current level of unpaid bills is completely unacceptable. We believe it is unacceptable that honest, paying customers should have to continue subsidising those who can afford to pay, but do not,” the report concludes.

“To address the very high level of unpaid water bills, those people who can afford to pay but refuse to do so should be partially disconnected from the water supply.”

The Lords recommend that a system — trickle disconnection — used in Melbourne, should be adopted in Britain. An Australian firm has designed a tamper-proof device that restricts the flow so that only enough for minimum health and safety needs is supplied. From an average 169 litres a day in Melbourne, non-payers are restricted to two litres a day.

The Earl of Selborne, chairman of the committee, said yesterday: “If we moved to install these devices my guess is people would manage to afford their water.” Defra declined an immediate response, but a spokeswoman said that it was being looked at.

Low-income households, however, should be given much more help in paying bills. The levels of financial assistance at present are “grossly inadequate”, the report says.

Companies were castigated for failing adequately to combat leaks, with almost a quarter of supplies taken for drinking water still being lost. Thames Water was the worst, with 33 per cent leakage and was described as “notorious” by Lord Selborne. He said that unless water companies were seen to be tackling leaks with investment, the public would ignore their pleas to conserve supplies. “The public will not tolerate high levels of leakage in water-stressed areas,” he said.

Compulsory metering is backed by the committee for the South East where water is scarce. David Miliband, the Environment Secretary, has been impressed by the reductions in consumption by meters, but for low-income households would need to be agreed before compulsory metering was approved.

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