UK government ministers are considering raising water prices for certain users amid significant supply shortages exacerbated by prolonged drought conditions. Despite the UK's reputation as a wet country, nearly 75% of England and all of Wales experienced drought this summer, prompting restrictions affecting approximately 27 million people.

The Environment Agency (EA) has warned that without intervention, England could face a daily water shortfall of 5 billion litres by 2055 due to climate change and increasing demand. Helen Wakeham, director of water at the EA, highlighted that while households are currently paying record water bills, some large industrial users pay comparatively little, with charges based primarily on the cost of issuing abstraction licences rather than the value of the water itself. “For big industrial customers, the more water they used, the less they paid,” she noted, adding that there is “a lively conversation” underway about fundamentally revising how water is valued and charged.

Industry sectors such as oil refineries, chemical plants, and paper mills, which constitute less than 1% of businesses but consume more water than the daily needs of 10 million people, currently face no mandatory consumption reduction. This has drawn criticism, with environmental groups arguing that the existing system favors big businesses at the expense of households and the environment. Dr Doug Parr, chief scientist and policy adviser at Greenpeace UK, said it is “absurd” that major companies receive cheaper water on a per-litre basis as their usage increases. He called for a complete overhaul of the abstraction policy to better reflect the country’s water stress and biodiversity challenges.

The issue also extends to the rapidly expanding data centre industry, which relies heavily on water for cooling. Water UK estimates that data centres in England consume 6.6 million litres of drinking water daily, a figure that could triple by 2030 as the government seeks to expand the sector and position England as an AI superpower. Critics say the requirement for data centres to use potable water is a government oversight. Jon Chappell, deputy director of the data centre trade body, described this as “unforgivable” and a “genuine failing of government.” Helen Wakeham acknowledged the problem and said the EA is collaborating with the government to explore new ways of pricing and allocating water resources, potentially increasing costs for industrial users to ensure more sustainable usage.

A spokesperson for the Department for Environment, Food and Rural Affairs (Defra) emphasised the need to address industrial water use alongside household restrictions, stating, “We want to keep bills as low as possible for consumers and make sure industries use less drinking-quality water where it isn’t needed.” The government is thus beginning a policy review aimed at balancing industrial demands, environmental sustainability, and consumer protection amid growing climate-related pressures on water resources.