New laws to end 'rain tax storm'

Some smaller churches have seen their water bills rise from £80 to £800

The government says it will intervene after churches and charities campaigned against the so-called "rain tax", which saw water bills rise as much as 1,300%.

Addressing the Labour Party conference, Environment Minister Hilary Benn said water firms would now be able to offer concessions for surface drainage.

The new legislation will affect England and Wales.

The Scout Association, which lobbied Parliament, said it was delighted by the "end of the rain tax storm".

Water watchdog Ofwat had advised that charging for drainage was an "environmentally responsible" approach.

It had said concessionary charges would be "unduly preferential and unduly discriminatory".

'Common sense'

Following the Ofwat advice, four companies - Yorkshire, United Utilities, Severn and Northumbria - changed their charging policy, sparking protests from various groups.

Churches faced higher bills because the drainage charges are based on the total surface area of their roofs, which governs how much rainwater has to be drained away into sewers.

It's a victory for common sense because it is madness a charity is taxed in the same way as a commercial business Scout Association

Martin Dales, a lay member of General Synod, the Church of England's governing body, said: "With more than 16,000 places of worship, Church of England parishes and cathedrals were facing an annual bill of several million pounds.

"Today's announcement is very good news for them."

Simon Carter, from the Scout Association, welcomed the "fantastic" move.

"It means our leaders are not going to have to be concerned with raising money but on providing a range of adventure activities for our scouts," he said.

"It's a victory for common sense because it is madness a charity is taxed in the same way as a commercial business."

In a joint statement, the Scout Association, the Football Association, Lawn Tennis Association, the England and Wales Cricket Board, the Rugby Football Union and the Church of England, said they would be "seeking assurances" from all of the main political parties "to make sure these measures become law".

'Months of uncertainty'

Ofwat says the cost of providing surface water drainage in England and Wales is about £700m every year, and everyone needs to pay their share.

Increases in bills of several hundred per cent or more are clearly unaffordable for community and voluntary groups Environment minister Huw Irranca-Davies

But the policy has led to some not-for-profit groups paying considerably more than commercial buildings - like shops and factories.

Environment minister Huw Irranca-Davies, who met with 100 youths from the Scout Association to hear their case, had earlier promised to change the rules.

"While all customers should contribute towards the cost of surface water drainage, increases in bills of several hundred per cent or more are clearly unaffordable for community and voluntary groups, and we cannot be in a position where this would force them to close," he said.

"So the government's new laws will allow water companies to apply concessionary charges for community organisations such as scout groups, amateur sports clubs and faith groups."

The new legislation will be brought in as part of the Flood and Water Management Bill, in the next session of Parliament.

A spokesman for Ofwat said it welcomed the government's move "to offer clarity on this complex issue".

He said: "The devil is in the detail and we will work closely with ministers to ensure all customers get a fair deal.

"Customers, water companies, regulator and government must all work together to tackle climate change, flooding and drainage, and in particular the impact of sewer flooding."

Shadow environment secretary Nick Herbert said the Conservatives had been calling for legislation to help community groups.

"Charities and amateur sports clubs have been rightly concerned about how they can afford sharp rises in water bills, and if only ministers had followed our proposals at the time then months of uncertainty could have been avoided," he said.