MPs attack water bosses’ bonuses

Water company executive pay and bonuses have come under attack by members of parliament during a backbenchers debate on the priorities in the Department for Environment, Food and Rural Affairs (Defra’s) Strategic Policy Statement to Ofwat.

Although the SPS prioritised the environment and the need to minimise the risks of harm from combined sewer overflows (CSOs), it had been criticised as lacking clarity and detail.

River pollution from CSOs dominated the debate, with MPs calling for more urgent action to address the risk of harm from the continued use of overflows.

Liberal Democrat MP Daisy Cooper noted that water company bosses have been awarded £27 million in bonuses over the past two years despite the continued use of overflows, describing this as “obviously wrong”.

She said of her party’s policy to redress this: “We want to stop water company executives to be paid a penny in bonuses until waterways are protected from these outrageous sewage dumps. I also think these bosses should be made to pay back the millions of pounds they have already received in bonuses until we can clean up this mess.”

She accused Ofwat of “sitting on its hands” while discharges happened.

Among her suggestions was for government to introduce a “sewage tax” on water company profits to fund clean-up of waterways and for Ofwat to ban companies from awarding executive bonuses while pollution incidents occur.

Philip Dunne, chair of the Environmental Audit Committee, which wrote a damning report into river health detailing failures by the sector, regulators and government, said of Cooper’s proposals: “Calling for a sewage tax and to ban sewage discharges as a legal, overnight measure reflects the lack of credibility or realism in proposals that the Liberal Democrats often make on this matter.”

Separately, Dunne called for money raised from pollution fines to be ring-fenced to be reinvested to directly benefit the water environment rather than being paid to the Treasury.

“Where persistent breaches have been found by the Environment Agency, judges have started to impose more meaningful fines,” Dunne said, adding that they might have “captured the attention of water company boards” but the funds should directly benefit rivers and streams.

He said fines be put towards repairing the damage caused by pollution incidents, either by water companies themselves or through a standalone fund run by Defra.

Charles Walker MP proposed a ‘river recovery fund’ that was supported by members from across the house as a means to direct financial penalties for pollution directly to the waterways that need it. This was echoed by several MPs from all parties during the debate.

In response Rebecca Pow, under-secretary of state for Defra, said department was outlining a “very interesting” holistic plan for how to ensure fines relating to water offences do benefit streams and rivers.

Luke Pollard, former environment shadow minister, broadened the debate beyond discharges and spoke about the need for more people who are passionate about all aspects of water as he highlighted that every drop of water is carbon intensive so every drop pumped, treated and returned to the environment carries both financial and carbon costs.

He called the SPS “a good start” but added he wants to see it go further.

Pollard said the statement needed a clearer decarbonisation strategy that ensures companies do not rely on offsetting for their net zero plans. He highlighted the need to strengthen the SPS on nature restoration plans to ensure they are not “squeezed out” as he said had been seen at previous price controls.

He added that more ambitious water efficiency targets are needed and encouraged government to set a goal of 110l per day for personal consumption in the SPS. Similarly on leakage, Pollard said targets should be specified for the next price review period, not just the 2050 goal of halving leakage.