The Labour government introduced the Water (Special Measures) Bill alongside the King’s Speech on Wednesday, aimed at enhancing water quality by strengthening the powers of the water regulator Ofwat.
It comes amid ongoing public outrage at the level of sewage and wastewater being dumped into British rivers and coastlines by major water firms including Thames Water and FTSE 100 members United Utilities Group PLC (LSE:UU.) and Severn Trent PLC (LSE:SVT).
Announcing the bill in his speech in the House of Lords today, King Charles stated: "My Government recognises the need to improve water quality and a bill will be introduced to strengthen the powers of the water regulator."
Key aspects of the bill include:
- Strengthening regulation to make water company executives personally criminally liable for lawbreaking
- Granting the water regulator new powers to ban bonus payments if environmental standards are not met
- Introducing a new 'code of conduct' for water companies to boost accountability, allowing customers to summon board members
- Implementing new powers to impose automatic and severe fines for violations
- Requiring water companies to install real-time monitors at every sewage outlet, with data independently scrutinized by water regulators
- These measures are designed to enhance the enforcement regime and make it clear that poor performance in the water sector will not be tolerated. The Government plans to introduce further legislation to fundamentally transform and reset the water industry, aiming to restore rivers, lakes, and seas to good health.
The Bill will extend and apply primarily to England and Wales.
Government data released with the bill showed that in the 2022/23 period, water and sewage company executives in England and Wales received £9.7 million in bonuses despite poor sector performance.
The total dividends paid to shareholders by water companies in England from April 2010 to April 2023 amounted to nearly £21.2 billion.
In 2023, there were 464,056 storm overflow spills, a record number and a 54% increase compared to 2022.
Ye between 2015 and 2021, the number of enforcement actions against companies by the Environment Agency decreased by 48%, with only five prosecutions against individuals within companies, of which two were successfully appealed.
Shares in United Utilities rose by 1.9% to 1,015p, Severn Trent by 2.7% to 2,539p and Pennon by 3.8% to 644p.