Sewage UK: Labour vows to give Ofwat powers to ban CEOs of sewage polluting water companies getting bonuses

Labour is calling on the government to give water regulators the power to ban chief executives’ bonuses if their companies are found to be polluting rivers, lakes and seas. The motion has been tabled to the House of Commons and comes after a BBC investigation suggested that United Utilities has been “covering up” its pollution incidents, marking them as less serious than they are.

The investigation, which was detailed in last night’s Panorama episode (Monday 4 December), found that the water firm has been wrongly downgrading pollution incidents in order to avoid having them counted in Ofwat’s figures. The Environment Agency (EA) was also found to have signed off all these incidents, as well as attending only six of 31 reported water company pollution incidents in north-west England between 2020 to 2022. United Utilities denied misreporting pollution. 

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

The EA 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.”