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GOVERNMENT plans to block the bonuses of water company bosses who fail to stop illegal sewage spills have been dismissed as merely “symbolic” by environment group Greenpeace.
The campaign group is calling for fundamental change in the industry and has accused companies of using privatisation to borrow tens of billions of pounds that was dished out to shareholders in dividends while water infrastructure was starved of investment.
A consultation by government regulator Ofwat on the potential blocking of polluting firm bosses’ bonuses was announced by Environment Secretary Steve Barclay on Sunday.
Greenpeace UK director for policy Dr Doug Parr said: “Thirty-five years ago the government created a captive water monopoly where ‘investors’ could extract the value of the UK’s water industry by effectively mortgaging it and handing out the proceeds to shareholders.
“This business model neither built nor maintained the vital infrastructure the water companies had been entrusted with, resulting in raw sewage frequently pouring into our rivers.
“This system needs to be fundamentally changed, and a symbolic bonus ban — while tiptoeing in the right direction — is not fundamental change.
“The flow of cash out of the industry needs to be reversed, flowing into our infrastructure until sewage stops flowing into our rivers.”
He called for an end to payment of shareholder dividends “until our water industry is no longer an international embarrassment.”
Greenpeace said the borrowing also left water companies saddled with debt.
When the water industry was privatised in 1989, the government paid off debts of more than £7 billion, leaving the industry debt free.
In March last year, English water companies had combined debts of £60.3bn.
Between 2010 and 2022 water companies paid out £18.9bn in shareholder dividends.
Labour shadow environment secretary Steve Reed MP accused the government of copying Labour’s policy on water bosses’ bonuses.
“Once again Labour leads, the Conservatives follow,” he said.
“Labour called for the water regulator to be given new powers to block bonuses for polluting water bosses last year.
“After doing nothing for 14 years, the Conservatives have now been shamed into adopting Labour’s plan.”
Despite popular backing for the idea, Labour has dumped its pledge to take water and other utilities back into public ownership and control.
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