The government intends to double water bill compensation in a bid to crack down on poor customer service.

Under the new plans announced today (Monday, August 12), customers will be entitled to double payments for poor service and more than double the compensation “for certain highly disruptive incidents”, such as failing to provide notice when the supply is cut and when appointments for meter readings have been missed.

The government will also extend the list of circumstances that can trigger compensation, including automatic payments for boil notices, or when a property has been flooded with sewage.

The move follows the Special Measures Bill announced in the King’s Speech last month.

The government said the new measures were in part due to the “recent water supply incidents in areas such as Brixham”, which saw thousands of households having to boil their tap water for weeks, or in some cases up to two months.

The measures are subject to an eight-week consultation process, but if they go through it would mean that a customer could receive £250 in compensation for an issue such as low tap pressure or up to £2,000 for internal flooding from sewers.

In addition, on an average annual water bill of £440, this would mean the minimum payment of at least £40 would now represent around 10 per cent of the average annual customer bill.

The proposals are the biggest shake up in compensation standards in 24 years, the government has claimed.

The new proposals were set out by the secretary of state for environment, food and rural affairs, Steve Reed, who pledged to “turn the tide” on the destruction of the waterways.

He said: “Our water industry is broken. After years of failure, households and businesses have been let down by water companies time and time again.

“The new government will clean up the water industry and turn the tide on the destruction of our waterways, ensuring water companies protect the interests of their customers and the environment.”

The proposals, outlined in the Guaranteed Standards Scheme, include giving the water regulator new powers to ban the payment of bonuses if environmental standards are not met, as well as boosting accountability for water executives through a new ‘code of conduct’ for water companies, so customers can summon board members and hold executives to account.

In addition, there will be new powers to bring “automatic and severe fines”, as well as requiring water companies to install real-time monitors at every sewage outlet with data independently scrutinised by the water regulators.

Jenny Suggate, for the Consumer Council for Water (CCW), which represents consumers, welcomed the launch of the consultation.

She said: “We’re delighted the government is fast-tracking efforts to improve the Guaranteed Standards Scheme, with the potential to boost compensation and support for hundreds of thousands of people each year when they are let down by their water company.

“Given that there has been little change to the standards since they were first introduced, an overhaul is long overdue, and we know it is a pressing priority for household and business customers.

“Demanding higher standards of service and improving levels of compensation when things go wrong will incentivise water companies to get things right the first time for all customers.”

The consultation will run until Monday, October 7. A government response will follow in due course once the consultation has closed.