Water company bosses could be banned from receiving bonuses and even sent to prison under proposed UK Government laws to combat pollution in rivers, seas and lakes.
The Water (Special Measures) Bill, introduced to the UK Parliament on Wednesday, will hand new powers to Ofwat and the Environment Agency to take action on companies damaging the environment and failing customers.
The UK Government said the current enforcement system is insufficient to hold firms accountable for widespread illegality in the sector, citing that only three individuals have been criminally prosecuted by the Environment Agency without appeal since privatisation.
Under the Bill, harsher penalties for law-breaking will be introduced, including jail sentences of up to two years for executives who fail to cooperate or obstruct Environment Agency and Drinking Water Inspectorate investigations.
Regulators will also be empowered to ban bonus payments to water bosses if they fail to meet high standards to protect the environment, their consumers and their company’s finances.
The proposed laws will apply in England and Wales.
The new Labour Government has already announced initial measures to tackle pollution but this is its first major move to deliver on its manifesto pledges to reform the broken water system.
UK Secretary of State for Environment, Food and Rural Affairs, Steve Reed, said: “The public are furious that in 21st century Britain, record levels of sewage are being pumped into our rivers, lakes and seas. After years of neglect, our waterways are now in an unacceptable state.
“That is why today I am announcing immediate action to end the disgraceful behaviour of water companies and their bosses.
“Under this government, water executives will no longer line their own pockets whilst pumping out this filth. If they refuse to comply, they could end up in the dock and face prison time.
“This Bill is a major step forward in our wider reform to fix the broken water system. We will outline further legislation to fundamentally transform how the water industry is run and speed up the delivery of upgrades to our sewage infrastructure to clean up our waterways for good.”
Alan Lovell, chair of the Environment Agency, said the regulator welcomed the Government’s ambition to drive through “much-needed” reform.
“The Bill will give us, as regulator, more power to protect our precious water quality and resources, hold water companies to account and ensure the polluter pays,” he said.
David Black, chief executive of Ofwat, said: “This Bill strengthens our powers and will help us drive transformative change in the water industry so that it delivers better outcomes for customers and the environment.”
A Water UK spokesman said: “We agree with the Government that the water system is broken. Fixing it requires the Government to deliver the two things which it has promised: fundamental regulatory reform and speeding up investment.
“Ofwat needs to back our £105 billion investment plan in full to secure our water supplies, enable economic growth and end sewage spilling into our rivers and seas.”
Mike Keil, chief executive of the Consumer Council for Water (CCW), said: “Our research shows consumer trust in the water sector has been badly fractured by concerns about the environment, which is why we welcome the measures laid out by the UK Government to ensure there are more serious consequences for water companies if they harm our rivers, lakes and seas.”
“These changes will complement the work we’re already doing to help transform the culture of water companies, so they are focused on providing the best possible service for their customers.”
The Conservatives claimed Labour were “attempting to pass off measures implemented under the Conservatives” as their own, pointing to a ban on bonuses for water company bosses whose companies who commit serious breaches as an example.
Shadow environment minister Robbie Moore said: “It was the Conservatives that introduced 100% monitoring for storm overflows and set out a plan to transform our infrastructure to ensure safer, cleaner waters.”
Liberal Democrat environment spokesman Tim Farron meanwhile said the Government’s plan “simply doesn’t look up to scratch to tackling the sewage scandal”.
He added: “This looks to be a job half done by the Government, now Liberal Democrat MPs will push them to go much further and faster in ending this scandal once and for all.”
