Bosses of water companies responsible for illegal sewage spills are to face a ban on their substantial bonuses after years of campaigns and public outrage.
Environment Secretary Steve Barclay announced payouts would be blocked to chiefs who oversee the polluting of rivers, lakes, and seas – starting with bonuses in the financial year starting this April.
It was revealed bosses received more than £26m in bonuses, benefits, and incentives over the last four years.
Analysis by the Labour Party found nine water chief executives were paid £10m in bonuses, £14m in incentives and £603,580 in benefits since 2019.
Senior executives from five of the 11 water companies that deal with sewage took bonuses last year, while the other six, including heads of Yorkshire Water and Thames Water, declined after public anger.
Steve Barclay announced the policy today. Pic: PA
There has been outrage around the illegal activity and calls by Labour and the Liberal Democrats to enforce the policy sooner, as water firms in England plan to hike customers’ bills by an extra £156 a year to invest in Britain’s Victorian infrastructure.
While Mr Barclay said he was “pleased” regular Ofwat was addressing bonuses following water companies’ poor performances, political opponents said the ban was “too weak and feeble”.
Liberal Democrat environment spokesperson and MP, Tim Farron, said: “Finally ministers have buckled to a campaign led by the Liberal Democrats over two years ago, but even now this attempt to ban bonuses sounds too weak and feeble.”
Mr Farron added the firms got away with “environmental vandalism” and called for the bonuses to be banned “today, regardless of criminal conviction”.
Tim Farron said the policy was ‘too weak and feeble’. Pic: PA
Ofwat will consult on details of the proposed ban later this year, including to define the criteria.
This could include successful prosecution for the two most serious categories of pollution – such as causing significant pollution at a bathing site or conservation area, or where a company has been found guilty of serious management failings – according to the Department for Environment, Food and Rural Affairs.
It could apply to chief executives and all executive board members.
On the proposal, Mr Barclay said: “No one should profit from illegal behaviour and it’s time that water company bosses took responsibility for that.
“In cases where companies have committed criminal breaches there is no justification whatsoever for paying out bonuses. It needs to stop now.”
Labour claimed it was the spearhead for this change, with a statement from shadow environment secretary, Steve Reed MP, saying: “Once again Labour leads, the Conservatives follow.”
He called for the Tories to “back Labour’s plan” to clean up the rivers and prosecute executives responsible for illegal sewage dumping.
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Labour said that under its plans, Ofwat could have blocked six out of nine water bosses’ bonuses last year.
Last year, Thames Water – which supplies one in four people in Britain – was fined more than £3m after pleading guilty to illegally discharging waste.
This included “millions of litres” of undiluted sewage near Gatwick Airport in 2017, which turned the water “black” and killed more than 1,000 fish.