Page last updated at 12:16 GMT, Friday, 30 January 2009

Ministers fight church 'rain tax'

By Julian Joyce
BBC News

The Bishop of Middleton lauching the "rain tax" campaign
The Bishop of Middleton launched the "rain tax" campaign in Manchester

The government is to pressure water watchdog Ofwat to change controversial advice allowing water companies to levy a "rain tax" on churches and charities.

The BBC understands ministers have not ruled out new laws to exempt not-for-profit groups from steeply-rising water drainage charges.

Churches are being billed millions of pounds for drainage - money they say should go toward charitable activities.

Ofwat says the bills are fair and environmentally responsible.

But a spokeswoman for the Department for the Environment (Defra) said: "Ministers are very concerned about this issue.

"Their view...is that something is clearly very wrong if community amateur sports clubs and churches are facing hikes in their bills of several hundred per cent."

If specified groups are to receive a cross subsidy paid for by other customers then it should be made explicit in appropriate legislation.
Ofwat

Defra ministers are to meet Ofwat officials next week for an "urgent report on progress."

A Defra source told the BBC: "If Ofwat and the water companies cannot resolve this themselves then we would have to change the law."

The news came on the same day the Church of England launched its "rain tax" campaign to fight steeply rising drainage bills - up by 1300% in some cases.

Its DontDrainUs.org campaign says the charges are set to cost the Church 15m a year - money that should be spent on pensioner lunches, youth groups and other socially useful activities.

Some smaller churches have seen their water bills rising from 80 to 800 a year, and at least one parish - North Thornaby in Yorkshire - is considering closing down one of its churches.

Charges suspended

DontDrainUs spokesman Martin Dales welcomed the apparent change of heart by ministers.

But he said the campaign would continue until the government made a "formal announcement" that churches and charities would be exempt from water drainage charges.

These are rising because two water companies - Yorkshire and Northumbria - have changed their policy and are billing churches and charities for the cost of draining the rain that falls on their roofs.

A third firm - United Utilities - last week suspended the charges for a year following protests by the Church and the Scouts Association, which says hundreds of its groups are having to choose whether they organise youth activities or pay their water bills.

Another firm, Severn Trent, intends to charge churches and charities from next year, but says it will bring in the charges over time.

A spokeswoman said: "We are concerned about how the change will affect our customers, including schools, churches and charitable organisations, and this is why we intend to phase the new charge in over a number of years."

No exemptions

Water companies say they are following official advice from Ofwat to charge everyone, regardless of whether they are a scout hall or a factory.

But campaigners say the watchdog is ignoring government advice, issued in 2000, to exempt churches and charities.

In a letter to MPs last week Ofwat defended its position, saying it would not impose a "social policy" to exclude certain groups of customers from charges.

The letter added: "In our view, if specified groups are to receive a cross subsidy paid for by other customers then it should be made explicit in appropriate legislation."

Rain tax poster outside church
Churches have been charged up to 71,000 for water drainage.

Campaigners have highlighted the alleged contrast between falling water drainage bills paid by big businesses like Rolls Royce, and rising charges paid by churches and other community groups.

In the past, many churches were exempt, because drainage charges were based on their "rateable value" - often calculated as close to zero.

But now the bills are levied according to the total surface area of roofs and other hard surfaces - such as pavements and car parks.

Campaigners say the new rules mean that churches - which often have large roofs - often find themselves being charged substantially more than shops and other profit-making premises.

Water companies argue that churches and charities need to pay their share of the cost of drainage.

Ofwat maintains that charging for drainage is an "environmentally responsible" approach and forces organisations to take responsibility for the drainage of their properties.

It estimates the cost of providing surface water drainage in England and Wales is about 700m each year.



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