Labour offered on Monday to work with ministers on restricting water bosses’ bonuses after illegal sewage spills, accusing the Conservatives of turning a "blind eye to corruption" in the industry.
Opposition analysis found that about £26 million has been paid out in bonuses, benefits and incentives to executives at nine water utilities in England, including the embattled Thames Water, despite spills since the 2019 election.
"We urge the Government to adopt Labour’s policy to give regulator powers to ban bonuses for polluting water bosses," Shadow Environment Secretary Steve Reed told the Standard.
"We will work with them in the national interest to get it through," he said, adding: "This Conservative Government has willfully turned a blind eye to corruption at the heart of the water industry.
"The result is stinking, toxic sewage destroying our countryside, and consumers facing higher bills while failing water bosses pocket millions in bonuses."
But Water Minister Robbie Moore stressed the Labour government’s record in Wales, alleging "they’re turning Welsh waters into open sewers".
"It was a Conservative Government that introduced 100 per cent monitoring of storm overflows.
"We’ve brought forward stronger regulations, tougher enforcement and the largest water infrastructure programme in history – an expected £56 billion investment," he said.
"We’ve given Ofwat new powers to hold bosses to account, ensuring people’s bills never reward poor performance."
Water companies plan to hike consumers’ bills by an average of about £156 per year to pay for investment to prevent 140,000 sewage overflow spills a year.
The regulator Ofwat is scrutinising Thames Water’s latest business plan for 2025 to 2030 which calls for a 40 per cent increase in customer bills to pay for infrastructure upgrades.
If approved, the move would add around £14.55 to Londoner’s monthly bills, higher than the industry average of £13.
But Ofwat also says that a net total of £70 million will be handed back to customers through charge reductions in 2024 and 2025, after water companies failed to meet their performance target in several areas.
Water chiefs have received more than £10 million in bonuses, nearly £15 million in incentives and £621,580 in benefits since the last general election, Labour found in its analysis.
Labour said it would end self-monitoring by water companies, ensure chief executives face personal criminal liability for “extreme and persistent” lawbreaking, and introduce “severe and automatic” fines for illegal discharges.
The party said that under its plans, regulator Ofwat could have blocked six out of nine water bosses’ bonuses last year.
The Environment Agency said it takes sewage pollution “very seriously” and will always prosecute companies found to be misleading regulators.
A spokesman for the industry association Water UK said: “We agree that any financial reward should be tightly linked to performance – including protecting the environment. It is also right that regulators have all the powers they feel they need to hold water companies to account.
“It is clear, however, that the only way to the change we all want to see is through significant investment. Water companies have set out plans for the biggest investment in the sector’s history – including £11 billion to improve sewage overflows – tripling current levels of investment.”
