Water companies in England and Wales have almost doubled their profits since 2019.
During this parliament, which started in 2019, pre-tax profits at water companies have climbed by 82%, according to a Liberal Democrat analysis of Companies House data.
It found that in 2022-23, England’s water firms made £1.7bn in pre-tax profits. This is up 82% since 2018-19, when the same companies made £955m. Since 2018-19, water firms have made £4.2bn in pre-tax profits.
At the Lib Dem spring conference, which starts on Friday, the party will announce a range of measures to stop water companies from prioritising profit over the environment. It will call for an additional 16% levy on top of corporate tax for water firms, and ask for this to pay for river cleanups and also the salaries of environmental journalists in each region. The party is dubbing this a “sewage tax”.
Water companies plan to increase bills by up to 40% by the end of the decade in order to pay for infrastructure improvements such as fixing leaky pipes and building new sewers. A large chunk of water bills, 28% in the case of Thames Water, also goes to servicing debt.
The Lib Dem leader, Ed Davey, said: “These eye-watering profits are a national scandal. Whilst our rivers, lakes and coastlines get destroyed by raw sewage, these polluting firms are laughing all the way to the bank. Frankly, the whole thing stinks.
“This is concrete proof that under the Conservatives, water firms have prospered and got away with environmental vandalism. Britain needs a new wave of local journalists to hold polluting companies to account.
“This bold plan will increase public awareness of environmental tragedies, and help hold powerful companies to account. There are so many stories to tell in local communities, and it seems fitting that the water firms pay up to fund the next generation of sewage sleuths.
“I was proud to launch our party’s campaign on this issue three years ago, and thrust water quality into the Westminster spotlight. Liberal Democrat activists across the country are spearheading the fight against polluting and profiteering water firms.”
A spokesperson for the industry body Water UK said: “This analysis is wrong and also misses out five water companies. According to the regulator’s own analysis, water company investors have earned an average return of 2.8% since 2020. This is half the average returns of other utilities and lower than the rates currently offered by most high street banks for a savings account. Water companies are focused on delivering what is set to be the largest investment programme in the sector’s history and the industry calls on regulators and government to back these plans.”
