Water company bosses could face prison time in new Labour crackdown on sewage infested rivers, lakes and seas
Water company bosses could face up to two years in prison and be banned from taking bonuses under the new government’s first major proposals to crack down on England’s sewage, chemical and manure infested waterways.
The new Water (Special Measures) Bill is designed to beef up feeble regulators so they can take on water companies releasing sewage into rivers, lakes and seas and appease public fury.
Although many topline measures had already been announced, the new details have been cautiously welcomed by green groups as an “important first step” towards cleaning up the country’s filthy rivers, lakes and seas.
But they say there is a long way to go given many other problems with the waterways, and the government acknowledged the need for “wider reform”.
What would the new water bill do?
The bill, which could come into effect in the new year, would increase fines and could see water executives who fail to cooperate or obstruct investigations, such as being slow to provide data, thrown in jail for up to two years.
Existing legislation does already allow bosses to face prison for other offences, but none have been successfully prosecuted despite “widespread illegality”, according to the government.
The Environment Secretary 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.”
File pic: Reuters
He added: “Under this government, water executives will no longer line their own pockets whilst pumping out this filth.”
Ofwat will also be allowed to ban water bosses’ bonuses if they breach standards on the environment, their consumers and company finances – although the system is yet to be designed.
Severn Trent chief Liz Garfield this year won a £584,000 bonus, despite the company being fined £2m for “reckless” sewage spills in the River Trent.
The bill will also see monitoring of every sewage overflow and the reporting of discharges in real time, with data made available to the public who might want to swim or surf in that water.
Although virtually all of England’s 14,000 storm overflows are monitored for discharges of sewage into waterways often due to heavy rain, most of the additional 7,000 emergency overflows, which release sewage due to system failures like power outages, are currently not checked.
The Environment Agency will be allowed to recover the costs of investigations from water firms, in a bid to restore the resourcing and expertise to the regulator that has been hollowed out in the last decade.
As funding was cut by half between 2009-2019, enforcement actions plummeted and thousands of staff left, along with their expertise tackling water problems, though the previous prime minister, Rishi Sunak, did restore some resources in February.
Decades of underinvestment and water companies are only part of the problem.
A growing population, more extreme weather caused by climate change, farming pollution and cuts to the watchdogs have combined to leave waterways in a dire state.
Just 14% of England’s rivers and lakes are in good ecological health.
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How have green groups and industry reacted?
Shaun Spiers, executive director of thintank Green Alliance, said: “This is a useful first step and will address the public’s concerns about inadequate regulation of polluting water companies.”
But working out how to pay for all the upgrades, changes, and climate and nature measures is a “more profound challenge”, he said.
Ofwat recently blocked water companies from hiking bills by any more than £94 over the next five years, a third less than they had proposed.
This is money they say they need to fix the problems, and which Labour could really do with, given the limited public finances to pay for infrastructure and nature and climate commitments.
James Wallace, chief executive of River Action UK, said he is pleased the new government is “taking seriously this dreadful blight on our rivers caused by pollution, and this is an important first step”.
But he called for an “urgent review” of the regulators.
“Talking about CEO bonuses is not going to sort things out. What we really need to see is a regulator, the Environment Agency, with its teeth given back and its funding given back,” he said.
“You can’t enforce these laws without effective regulators.”
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The environment department hinted at further action on the regulators – but would not commit to timeframes.
The government is aiming for a “wider reform to fix the broken water system” over this parliament, Steve Reed said, including boosting infrastructure upgrades and ensuring the water industry is still attractive to investors.
A Water UK spokesperson said: “We agree with the government that the water system is not working. 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 £105bn investment plan in full to secure our water supplies, enable economic growth and end sewage spilling into our rivers and seas.”
Ford’s UK boss has called on the government to provide consumer incentives of up to £5,000 per car to boost demand for electric vehicles and help the industry hit challenging climate targets.
Lisa Brankin, chair of Ford UK & Ireland, told Sky News that direct support for consumers to purchase zero-emission vehicles is crucial if the industry is to remain viable and hit challenging net zero milestones.
Last week, amid increased industry pressure, the government launched a “fast-track” review of its Zero Emission Mandate (ZEV), which sets targets for the proportion of new vehicles that must be electric – set at 22% this year for cars and 10% for vans.
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Manufacturers say those targets are unrealistic, and a £15,000 fine per non-compliant vehicle is too harsh. Vauxhall owner Stellantis cited the ZEV as a factor in the closure of its Luton plant announced last week.
Speaking at Ford‘s Halewood plant on Merseyside at the launch of the Puma Gen-E, the electric version of its best-selling small SUV, Ms Brankin said consumer demand has fallen far below that envisaged when the mandate was set.
“The mandate is a really aggressive trajectory to 2030 and the phase out of new petrol and diesel vehicles. For us to get a return on our investment as a manufacturer – we have spent £380m here [at Halewood] and £2bn in Cologne – we need and want to sell electric vehicles. The problem is customers are not moving as we would want.
The electric van and Puma use the power unit produced on Merseyside. Pic: Ford
“The number one thing we want is direct customer incentives, perhaps a scrappage scheme, we have been calling for a cut in VAT on electric vehicles. Something that will incentivise customers to buy EVs, and incentivise the van and car sales that we badly need in the UK.”
Asked if the incentives would need to be in the order of £2,000-£5,000 to be effective, she said: “That is a good question, but it would need to be in that region. It will need to be substantial.”
The Puma Gen-E is significant for Ford because it is the company’s smallest and cheapest EV, with a starting price of just under £30,000, bringing it closer to mass market reach than its existing models.
The Halewood plant has just begun making the Gen-E power unit, used in both the Puma and the E-Transit Custom, the electric version of Ford’s 60-year-old commercial vehicle. They say it will now power Britain’s best-selling car and van.
It comes as the entire European car industry faces challenges in the transition away from internal combustion, including softening consumer demand, stiff Chinese competition and the threat of tariffs from the incoming second Trump administration.
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Ms Brankin defended Ford’s move into electric vehicles, a transition that thus far has failed to replicate its former dominance of the UK market for petrol and diesel vehicles.
She also said state support for its UK plants at Dagenham in Essex and Halewood was dwarfed by the company’s investment.
“The support we’ve had from the government is still far below the amount that we’ve poured into our business to make the EV transition. And for us to have a sustainable business it’s important that it’s profitable for us going forward if we are going to protect the jobs we’ve already created.
“We have got a really good range of electric vehicles, we are just not seeing customers making the switch as fast as we would want them to.”
The Office for National Statistics (ONS) has admitted efforts to overhaul unreliable data on Britain’s jobs market may not be ready until 2027.
The ONS confirmed it is now “unlikely” it will be able to introduce a revamped version of its Labour Force Survey (LFS) – which is the official measure of employment and unemployment in the UK – by mid-2025, leaving policymakers in the dark over the true state of the UK workforce.
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Governor of the Bank Andrew Bailey said it was “a substantial problem” that the exact numbers of people at work are unknown in part due to fewer people answering the phone when the ONS call.
While the labour market is going to be “the key” to future rate cuts, another member of the interest rate decider Professor Alan Taylor told the MPs of the Treasury Committee last month: “We don’t necessarily have the best statistics there.”
The government too has built policy around the belief that the UK has a high number of people out of work and not looking for work.
Just last week the government announced £240m for reforms to “get Britain working”.
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But on the same day, the Bank’s chief economist said labour force participation “has now reached the point where participation is broadly in line with a natural level it should be”.
The UK had been thought to be an outlier compared to its neighbours in that the number of people in work is lower than before the COVID-19 pandemic.
Respected thinktank the Resolution Foundation had also said that there was no rise in inactivity based on HM Revenue & Customs data and that employment had been underestimated by 930,000 since 2019.
Also revised due to changes in population is the employment estimate, which is 0.1% higher than first thought, the ONS said.
The ONS said it continued “to advise caution when interpreting changes” in things like unemployment and economic inactivity.
More than a year ago in October 2023, the ONS temporarily suspended publication of its official labour force survey due to low response rates after the pandemic and began releasing experimental estimates that relied on tax and other data sources.
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