Water companies are facing fines of up to a tenth of their turnover from today under new powers granted to regulator Ofwat to halt the scourge of sewage dumping.
David Black, Ofwat's chief executive, said: “From today we are putting water companies on notice to improve customer service and where we see failure, Ofwat can and will take action which could result in significant fines.”
Ofwat has been under intense pressure to come up with a solution to discharges from the water companies, which were allowed under changes to rules when Boris Johnson was PM.
Suppliers have announced an investment programme to upgrade the UK’s decrepit sewer infrastructure, to cost each household £156 a year by 2030.
In addition, a new plan will see bosses of water utilities lose bonuses if the performance of their company fails to meet performance requirements.
Out of the eleven water companies in England and Wales, six chiefs opted to forego bonuses last year due to the outcry over sewage dumping.
Government ministers are said to want the bonus policy to be implemented from April, being the start of the financial year for the sector and ahead of the next election.
"In cases where companies have committed criminal breaches, there is no justification whatsoever for paying out bonuses. It needs to stop now," said environment secretary Stephen Barclay.
The Department for Environment, Food and Rural Affairs (DEFRA) said incidents involving polluting a bathing site or conservation area, or a company being found guilty of serious management failings, would be reasons for bonuses to be withheld.
Shares in Severn Trent rose by 0.5% to 2,482p and United Utilities by 0.7% to 1,024p on news of the new proposals.