New regulations as Labour tries to answer public anger over water companies
Public anger has risen over the state of rivers, lakes and coasts, as well as rising bills, and the dividends and bonuses paid to water bosses.
The Government is bringing in measures to strengthen regulation of the water industry as it attempts to answer public anger over sewage polluting rivers, lakes and seas.
The Water (Special Measures) Bill announced in the King’s Speech includes regulations to make water company bosses face personal criminal liability for breaking laws on water quality, and new powers for regulator Ofwat to ban the payment of bonuses if environmental standards are not met.
It also establishes a new code of conduct for water companies, allowing customers to summon board members and hold executives to account, and will introduce new powers to bring “automatic and severe” fines for transgressions.
And it requires water companies to install real-time monitors at every sewage outlet with data independently scrutinised by the water regulators – although the government announced last year that all of England’s storm overflows are electronically monitored.
The measures, which cover England and Wales, come in response to growing public anger over the degraded state of rivers, lakes and coastal waters, rising bills, and the dividends and bonuses paid out by water companies.
Campaigners welcomed the Bill to improve water quality, but warned that the plans set out in the King’s Speech to stimulate growth through planning reform and housebuilding need to be balanced with the need for healthy rivers.
And Ofwat chief executive David Black said: “We look forward to working with the Government as it aims to increase our powers to drive more responsible decision-making in the board rooms of water companies, and support us in going further to protect and promote the interests of customers and the environment.”
Sewage spills from water infrastructure have contributed to a situation in which no single river in England is considered to be in good overall health, and beauty spots including Windermere in the Lake District have been polluted.
Water utilities have also been hit by multimillion-pound fines for repeated and damaging illegal pollution in the last five years, and there is concern about the levels of leaks from water infrastructure – especially in times of drought when hosepipe bans are imposed.
Meanwhile, some of the privatised water companies are creaking under high levels of debt or face criticism over dividends to shareholders and executive bonuses.
And worse is to come as climate change and worsening weather extremes, from downpours to drought, pile more pressure on supplies.
The issue became a focal point of the general election campaign, while the new Government faces a looming financial crisis over Thames Water.
Labour, which has already secured agreement from water firms for a series of measures, said its Water (Special Measures) Bill is an “immediate step” but warned that change will take time.
It is also promising further legislation to “fundamentally transform our water industry”, and restore rivers, lakes and seas.
James Wallace, chief executive of environmental campaign group River Action, said he is pleased that river campaigners have been listened to, and welcomed news of the Bill to improve water quality by holding utility companies accountable and strengthening the regulators.
He said campaigners will wait to see what extra powers, funding and resources the regulators will be given to tackle failing water companies and bring criminal charges against persistent polluters.
He added: “It remains to be seen how the Government will balance the need for sustainable new homes and healthy rivers. The two are not mutually exclusive.”
He warned the current wastewater infrastructure system will not be able to cope with a nationwide housebuilding programme without rapid investment, because – after decades of “chronic underinvestment” – it buckles when it rains, releasing raw sewage into rivers and the sea.
“Alongside home-building with rainwater and grey water reuse, we need legally binding measures and effective planning interventions put in place to protect our rivers from pollution,” he said, calling for the upgrading of wastewater treatment works and sustainable drainage schemes in developments.
