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Ban water company chief executive bonuses, Labour to tell Commons

Senior executives from five of the 11 water companies that deal with sewage took bonuses this year, while at the other six they declined after public outrage (Alamy/PA)
Senior executives from five of the 11 water companies that deal with sewage took bonuses this year, while at the other six they declined after public outrage (Alamy/PA)

Labour is calling on the Government to give water regulators the power to ban chief executives’ bonuses if their companies are polluting rivers, lakes and seas, in a motion tabled to the House of Commons.

Senior executives from five of the 11 water companies that deal with sewage took bonuses this year, while at the other six they declined after public outrage.

Ofwat, the regulator, said the senior executives that did take a bonus did so from shareholders, not customers, and that from next year it will block customers’ money being used for “inappropriate” executive bonuses.

Labour’s proposal comes after a BBC investigation suggested United Utilities has been misreporting its pollution incidents as being less serious than they are in order to avoid having them counted in Ofwat’s figures, something the company denies.

Environment Agency insiders also said most reported pollution incidents go unchecked, with officers using only what water companies tell them for their reports.

Labour accused the Government of allowing the water industry to openly pollute British waterways with sewage.

It said it would end self-monitoring, make sure chief executives face personal criminal liability for “extreme and persistent” lawbreaking and introduce “severe and automatic” fines for illegal discharges.

Shadow environment secretary Steve Reed said: “This Conservative Government has wilfully turned a blind eye to negligence at the heart of the water industry.

“The result is stinking, toxic sewage destroying our countryside, and consumers facing higher bills while water bosses pocket millions in bonuses.

“With Labour, the polluter – not the public – will pay. Water companies must immediately be placed under special measures.

“Labour will strengthen regulation to make sure every single water outlet is monitored so we know the true extent of this sewage crisis.”Water bosses who continue to oversee law-breaking on the scale now becoming apparent will face criminal charges, and we will give the water regulator powers to block payment of any bonuses until water bosses have cleaned up their filth.”

The Environment Agency said it takes sewage pollution “very seriously” and it will always prosecute companies that are being misleading.

A Defra spokesperson said: “We take oversight of the water industry very seriously – which is why we welcome Ofwat tightening rules on bonus payments.

“For 2022-23, no water company bosses in England are paying a CEO bonus out of customer money, and many CEOs have decided to take no bonus.

“The volume of sewage being discharged into our waters is utterly unacceptable and that’s why our Plan for Water is delivering more investment, stronger regulation and tougher enforcement to tackle pollution and clean up our water.

“This Government is the first to take such comprehensive action on storm overflows with monitoring up from just 7% in 2010 to 91% in 2022 and 100% expected by the end of the year.

“This means regulators will have additional tools to hold polluters to account like never before, including through new uncapped civil penalties covering a wider range of offences.”