Labour pledges to block water company boss bonuses until they have ‘cleared up their filth’

The Labour Party would give water regulator Ofwat new powers to block bonuses being paid out to water company bosses until they fix their track record on sewage pollution if it wins the next general election, according to the shadow environment secretary Steve Reed.

Shadow environment secretary, Steve Reed MP, on April 1, 2023. Photo by Ian Vogler - WPA Pool/Getty Images)

The announcement is part of a wider Labour plan to put the water industry under “special measures” to end what it describes as the Tory sewage scandal by 2030. The party’s plan includes ensuring water bosses face “personal criminal liability” for “extreme and persistent lawbreaking”, introducing automatic fines for illegal discharges, and forcing water companies to monitor every single storm overflow.

This comes after no water company was ranked as leading in Ofwat’s latest performance review.

READ MORE: How Ofwat has graded water companies' performance

Reed, who is currently at the Labour Party Conference being held in Liverpool, said: “The water industry and its regulatory framework are broken after 13 years of Tory government – with stinking, toxic sewage lapping up on our rivers, lakes, and seas. 

“It is shocking that during a cost-of-living crisis, consumers are now being expected to pay the price, whilst CEOs are pocketing millions in bonuses. 

“This Conservative government is too weak to tackle this scandal. They cut back enforcement and monitoring against water companies releasing this filth, and are now failing to prosecute bosses when they are blatantly breaking the law.

“Labour will turn the page on years of Conservative negligence. With Labour, the polluter – not the public – will pay. Labour will give Ofwat the powers to ban the payment of bonuses to water bosses until they have cleared up their filth.” 

Chief executives of Yorkshire Water, Thames Water Southern Water, Welsh Water, and the owner of South West Water did not accept bonuses for the 2022 to 2023 financial year in the wake of backlash over water company earnings. 

Ofwat was recently awarded powers by the government to block the payment of dividends to water company shareholders if a water company has a bad environmental performance or is at risk financially.