Water bosses have awarded themselves £25m in bonuses since last election, Labour says
Water company bosses have awarded themselves over £25m in bonuses and incentives since the last general election, according to analysis by Labour.
The analysis found that nine water chief executives were paid £10m in bonuses, £14m in incentives and £603,580 in benefits since 2019.
It comes amid outrage over illegal sewage dumping, with water firms in England seeking to hike customers’ bills by an extra £156 a year to invest in Britain’s Victorian infrastructure.
Labour has pledged to give the water regulator new powers to ban payouts to bosses of firms that are illegally polluting rivers, lakes and seas if it wins the next election.
It said under the plans, Ofwat could have blocked six out of nine water chiefs’ bonuses last year because of severe levels of sewage pollution.
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Steve Reed, the shadow environment secretary, said: “This Conservative government has wilfully 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.”
The government has introduced unlimited fines for water companies who pollute and increased Ofwat’s powers to ensure water company dividends are linked to environmental performance.
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What caused Britain’s sewage crisis?
And last year, Ofwat decided that water companies failing to meet environmental commitments would be barred from funding bonuses from household bills.
Labour said it will go further by allowing the regulator to ban bonuses altogether and making sure chief executives face personal criminal liability for “extreme and persistent” lawbreaking.
Mr Reed said: “Labour will put failing water companies under special measures. We will strengthen regulation so law-breaking water bosses face criminal charges, and give the regulator new powers to block the payment of any bonuses until water bosses have cleaned up their filth.
“With Labour, the polluter – not the public – will pay.”
The sewage scandal has come under the spotlight in recent years, with a string of high-profile incidents, including a sewage discharge at a picturesque beach in Cornwall, fuelling disgust over the issue.
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‘Sewage scandal’ in water system
Water companies have faced a backlash over bonuses and shareholder dividends – seen by critics as rewards for failure given the scale of the problems facing the sector.
Untreated sewage was discharged more than 1,000 times a day across the UK’s waterways between September 2022 and 2023, according to the Surfers Against Sewage campaign group.
They said that as well as being an environmental problem, the sewage scandal is increasingly a public health one too – with reports of sickness after entering the water tripling over the past year.
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Water firms in England have apologised to customers and submitted a business plan to Ofwat that would see investment almost double from current levels to £96bn between 2025 and 2030.
Water UK said the plans would pay for 10 new reservoirs, cut leaks and stop the equivalent of 6,800 Olympic swimming pools-worth of sewage spills.
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It said the scale of the work meant that the average bill in England was expected to be £7 per month higher by 2025, rising to £13 by 2030.
That sum is equivalent to £156 more per year.
It forms part of the government’s Plan for Water to update the UK’s Victorian-era sewage network.
A government spokesperson said: “Our Plan for Water is delivering more investment, stronger regulation, and tougher enforcement – and we have already been very clear that water companies must never profit from environmental damage.
“That is why we have given Ofwat increased powers to hold them to account, as well as boosting Environment Agency powers through unlimited financial penalties. That’s on top of the £150m levied through criminal prosecutions since 2015.
“All storm overflows across England are also already fitted with monitors, with this government having increased monitoring from 7% in 2010 to 100% now.”
Business
Vivergo: How US-UK trade deal could bring about collapse of huge renewable energy plant in Hull
The smell of yeast still hangs in the air at the Vivergo plant in Hull but the machines have fallen quiet.
More than 100 lorries usually pass through here each day, carrying 3,000 tonnes of wheat. It is milled, fermented and distilled. The final product is bioethanol, a renewable fuel that is then blended into E10 petrol.
This is a vast operation. It took several years to build, with considerable investment, but it is on the verge of closing down. Management and staff are holding out for a last-minute reprieve from the government but time is running out.
It’s been a turbulent journey. The plant was already being annihilated by US rivals, losing about £3m a month. Vivergo and Ensus, based in Teesside, blamed regulations that enable US companies to earn double subsidies.
They were pushing for regulatory change but then a killer blow: The US-UK trade deal, which allows 1.4 billion litres of American ethanol into the UK tariff-free (down from 19%).
“We’ve effectively given the whole of the UK market to the US producers,” said Ben Hackett, managing director at Vivergo.
“If we were to have the same support that the US industry has, if we could use genetically modified crops, we wouldn’t need that tariff. We would be able to compete. If we had the same energy costs. We wouldn’t need those tariffs.”
The government has the weekend to come up with a plan that could keep the business running. If it fails, Vivergo will begin issuing redundancy notices to its 160 staff.
Ben Hackett
It’s a devastating prospect for workers, many of them live in Hull and are nervous about alternative opportunities in the area.
Mike Walsh, a logistics manager who has been working at the plant for 14 years, said: “It’s not a great place to be at the moment. It’s a very well paid, very high-skilled role and they’ve (Vivergo) given everybody an opportunity in an area that doesn’t pay that well…. The jobs market isn’t as good as what people would like. So it does impact the local economy.”
He called on the government to “help us, save us, give this industry a future”.
His colleague Claire Wood, lead productions engineer, said: “I moved here after a career in oil and gas for 10 years, partly because I want to be part of the transition to renewable fuels. I can see so much potential here and it’s absolutely devastating to know that this place might be closed very, very shortly and that all that potential just goes away.”
Thousands more could be affected. Haulage companies may have to lay off truck drivers and farmers could also suffer a blow.
Vivergo makes bioethanol using wheat. That wheat is bought from farms from Yorkshire and Lincolnshire.
Claire Wood
The National Farmers Union has sounded the alarm, saying: “Biofuels are extremely important for the crops sector, and their domestic demand of up to two million tonnes can be very important to balance supply and demand and to produce up to one million tonnes of animal feed as a by-product.”
Another bioproduct is carbon dioxide. The gas can be captured and used to put the fizz in drinks or injected into packaging to preserve food.
If Vivergo and Ensus were to go, Britain would lose as much as 80% of its output of carbon dioxide. Supplies are already tight across Europe, meaning this decision could compound shortages across a range of sectors, from meat-packing to healthcare.
The industry is calling on the government to help. Vivergo says it needs temporary financial support but that the government must create a regulatory and commercial environment in which it can thrive.
It says rules that award double subsidies to companies that use waste product in their bioethanol must be changed. At present, these rules are being used by US companies that make ethanol from Uldr – a by-product of processing corn. They argue this is not a genuine waste product.
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Another option is to grow the market. Industry leaders are calling on ministers to increase the mandated renewable fuel content in petrol from 10% to 15% and for an expansion into aviation fuels. That would allow British companies to carve out a space.
The government has been locked in talks with the company since June.
It said: “We will continue to take proactive steps to address the long-standing challenges it faces and remain committed to a way forward that protects supply chains, jobs and livelihoods.”
However, the time for talking is almost over.
Mr Hackett said he had no idea how the government would respond but he was firm with his stance, saying: “In times of global uncertainty, losing that energy certainty and supply from the UK is a problem.
“I think what they’re missing out on is the future growth agenda. We’re the foundation on which the green industrial strategy can be built. We make bioethanol that today decarbonises transport. Tomorrow it will decarbonise marine. It will decarbonise aviation.”
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