Liberal Democrats: Ban water company bosses’ bonuses until sewage discharges end

England’s water company bosses have awarded themselves almost £27 million in bonuses over the past two years despite pumping out raw sewage into waterways 1,000 times a day, the Liberal Democrats have revealed.

Analysis of Companies House records by the Liberal Democrats shows that executives at England’s water and sewage companies were paid £48 million in 2020 and 2021, including £27.6 million in bonuses, benefits and incentives.

The eye-watering executive pay packets and company profits were made despite the Environment Agency reporting nearly 772,000 sewage dumping events taking place in 2020 and 2021 alone, or over 1,000 per day.

The Liberal Democrats are calling on the Government to ban new bonuses for water company executives until sewage offences are brought to an end. The party is also calling on water company bosses to hand back last year’s bonuses and for the funds to be used to clean up rivers and lakes that have been polluted by sewage.

United Utilities, who were responsible for the most spills over 2020 and 2021, paid bonuses of nearly £6 million. Severn Trent awarded their execs £5.5 million in bonuses while dumping sewage 120,000 times. Meanwhile, Yorkshire Water, who dumped sewage 135,000 times, handed out bonuses of £3.3 million.

The Liberal Democrats have previously called for a Sewage Tax on the profits of water companies, to fund the cleaning up of waterways polluted by sewage. Analysis by the party suggests water companies made a staggering £2.7 billion in operating profits in 2020/21.

Liberal Democrat Leader Ed Davey said:

The Conservatives are allowing water companies to pump raw sewage into our precious rivers and lakes while awarding themselves obscene bonuses. Just like the millions paid out to bankers during the financial crisis, the public will find this hard to stomach.

Liberal Democrat plans for a sewage bonus ban would stop water company execs being paid a penny in bonuses more until our waterways are protected from sewage dumps. These bosses should be made to hand back the millions of pounds already received in bonuses to help clean up their mess.

It’s time to send a message to the Conservatives that they cannot let water company bosses get away with pumping raw sewage into our rivers and beaches any longer. Every vote for the Liberal Democrats in May is a vote for a strong local champion who will stand up for their local community, clean rivers and countryside.

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16 Comments

  • Maurice Leeke 19th Apr '22 - 12:44am

    Could we also ban dividend payments within 18 months of a pollution incident while we are at it. If water companies are polluting they should be investing in their infrastructure not rewarding their shareholders imho.

  • Ed Davey is right to blame government inaction for the failure to address the problem of sewage outflows, but where is Ofwat in all this? Its website says that “as part of our price review process, we ringfence investment for environmental initiatives and ensure water companies deliver environmental improvements efficiently, using our regulatory tools to make sure they prioritise this,” and that correctly describes its role: owners of regulated utilities are not free agents. Regulators have far-reaching powers, and can impose unlimited penalties if targets aren’t met.
    As well as banning bonuses for the water companies, we need to sack those in the Ofwat Executive who have been asleep at the wheel.

  • Mick Taylor 19th Apr '22 - 8:29am

    When will the party get its head out of the sand and realise that private companies won’t deliver water and sewerage services properly. State ownership is the only solution. Only publicly run water companies will deliver fir the public not shareholder

  • @ Mick Taylor. Quite right and I’d add the so called Royal Mail (and possibly the nuclear power industry) to the list.

  • Steve Trevethan 19th Apr '22 - 10:08am

    How can we be certain that any sewage tax costs are not passed on to citizens?
    Might, as stated by Mr Taylor, the return of the company to community control be a worthwhile approach?

  • @DavidRaw. I’d add railways too. Approaching half the network is already being run by state agencies and, at least on the Northern franchise and LNER, significantly better than the previous private company.
    Time to get away from the Tory stereotypes of nationalised industries and make public services work for the public and not for shareholders.

  • Debates about privatisation vs nationalisation are sterile and redundant and the preoccupation of the Labour left. Both the state and the market can fail. We need new and innovative ideas instead.

    For utilities I would favour creating public benefit companies who would be allowed to make a limited profit but with oversight by regional citizens boards.

  • @ Mick Taylor. Agreed, and would add that as long ago as 1919 this might have happened but for the fact that a certain Ll.G. was in Coalition with the Tories. There are plenty of lessons to be learned from history – more recently and long ago.

  • Jason Connor 19th Apr '22 - 12:55pm

    I’d agree with Mick Taylor. The government has recently taken over the failing unaccountable privatised railway franchise where I live and there has been a marked improvement in train frequency and service ever since. Publicly run utility services is the way forward and the hallmark of social liberalism.

  • Yeovil Yokel 19th Apr '22 - 1:52pm

    My biannual direct debit to Wessex Water was due on 01 April, but I cancelled it in mid-March to gauge their reaction and sow a seed of doubt in their minds. I don’t wish to risk court action or damage to my credit rating, and I have no legal means at my disposal to sanction them, so, for the time being, I will pay in full…..eventually. My aim is to disrupt their payments system and increase their costs by making unpredictable staged payments, and the last one will be in cash sent in the post.
    I’ve also sent Wessex Water a fierce letter of complaint by way of explanation of my actions, with a copy to my MP (Paddy Ashdown & David Laws’ successor, who voted against the ban on sewage discharges). I make it clear that I will vote at the next general election either to bring the water companies back into public ownership or to create some sort of not-for-profit corporate structure. I don’t believe any politician who promises to tighten up the process of regulation whilst maintaining the current set-up – such a commitment is no longer credible.

  • There already is an alternative (in response to those who above talking of nationalisation, or public benefit companies).
    It serves three million customers, has no shareholders, and is run on a not-for-profit basis.
    So when writing to your MPs/local water companies, do mention the perfectly viable existing one called Dwr Cymru – Welsh Water!

  • Mick Taylor 19th Apr '22 - 6:19pm

    Call it what you like, but private water/sewerage and rail franchisees don’t serve the public and should be taken out of the private sector.
    I would respectfully disagree with Marco. That’s what the fat cats in the Tory Party want you to believe, not the evidence. State run railway companies are doing significantly better than their former private franchisees. As a regular user, I know that Northern Rail is now much more reliable than First Bus. Stop listening to the Tory press and look at the facts!

  • Cassie 19th Apr ’22 – 4:39pm:
    It serves three million customers, has no shareholders, and is run on a not-for-profit basis.
    So when writing to your MPs/local water companies, do mention the perfectly viable existing one called Dwr Cymru – Welsh Water!

    One could also mention that it has a worse record for both number and duration of sewage spills than every one of the English water companies, including those serving over five times more customers…

    ‘Wales sewage dumping soars to 105,000 recorded incidents’ [March 2022]:
    https://www.bbc.com/news/uk-wales-60738645

    ‘Raw sewage discharged into English rivers 375,000 times by water firms’ [March 2022]:
    https://www.theguardian.com/environment/2022/mar/31/sewage-released-into-english-rivers-for-27m-hours-last-year-by-water-firms

    United Utilities recorded the most raw sewage spillages into English rivers in 2021

    United Utilities 81,588
    Yorkshire 70,062
    Severn Trent 59,684
    South West 42,484
    Northumbrian 36,483
    Wessex 23,532
    Anglian 21,351
    Southern 19,077
    Thames Water 14,713
    Welsh Water (in England) 3,567

  • I worked for an electricity networks operator (ENO) before, during and after privatisation, and I saw at first hand how Ofgem learned to harness the self-interest of ENO owners and managers to improved performance, by using financial rewards and penalties which indirectly impacted the bonuses of executives. Whether we like it or not, people try harder when there is something in it for them.
    It hasn’t worked so well with water, but the answer lies in tougher and properly targeted regulation from Ofwat. Those who think state ownership would be better probably didn’t witness the complacency and reluctance to innovate we in the electricity industry experienced before privatisation, or the rapid improvements after 1990.

  • Andy Daer. At 72, I have a clear recollection about the before and after of privatisation. BT has prospered and services have improved for the customer. Not so with rail, water and power. Rail track failed and network rail is effectively nationalised. Many rail franchises are now in the public sector and rail fares have rocketed since privatisation. Water and sewerage companies have garnered huge profits for owners but failed in most other respects. Power companies are hiking bills (mine has gone from £100 to £300 a month) and making mega profits. If that’s success, then what needs to happen to be seen as failure?

  • @Mick Taylor, thanks for the response, but I specified ENOs, which are comparable with water utilities, not the Electricity Suppliers, which buy and sell power in what is currently a very volatile market. The mega profits, incidentally, are being made by oil and gas suppliers, as a result of the the world price shooting up, not by electricity suppliers, many of whom have gone bust or are making losses.
    It is true that some privatisations haven’t worked perfectly, but the point I wanted to make is that a decision about re-nationalising any utility ought to be made after careful analysis (in this case of what has gone wrong to cause the sewage outflow problem), and not be based on blanket assumptions about the evils of capitalism, or fury about directors’ bonuses.

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