Water bosses threatened with jail as government launches crackdown
Water Bill will hand new powers to Ofwat and Environment Agency
Last updated 5th Sep 2024
Water firm bosses could face up to two years in jail for obstructing regulators under new laws proposed by the Government to crack down on the pollution of England's rivers, seas, and lakes.
The Water (Special Measures) Bill, introduced in Parliament on Wednesday, will hand new powers to Ofwat and the Environment Agency to take action on companies damaging the environment and failing customers.
The Government said the current enforcement system is insufficient to hold firms accountable for widespread illegality in the sector.
Under the Bill, harsher penalties for law-breaking will be introduced, including jail sentences of up to two years for executives who fail to cooperate or obstruct Environment Agency and Drinking Water Inspectorate investigations.
The burden of proof in civil cases will be lowered so that the Environment Agency can bring forward criminal charges against bosses more easily.
Regulators will also be empowered to ban bonus payments to water bosses if they fail to meet high standards to protect the environment, their consumers and their company's finances.
Years of under-investment by the privately-run firms combined with ageing water infrastructure, a growing population, and more extreme weather caused by climate change have seen the quality of England's rivers, lakes and oceans plummet in recent years.
Sewage spills have contributed to a situation in which no single river in England is considered to be in good overall health, and beauty spots including Windermere in the Lake District have been polluted.
Some water utilities are also creaking under high levels of debt or face criticism over dividends to shareholders and executive bonuses.
The new Labour Government has already announced initial measures to tackle pollution but this is its first major move to deliver on its manifesto pledges to reform the broken water system.
It comes as part of plans for a broader reset of the sector over this parliament, including legislation to speed up sewage infrastructure upgrades and to address how the water industry is run so that it can still attract investment and talent, officials indicated.
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.
"Under this Government, water executives will no longer line their own pockets whilst pumping out this filth.
"If they refuse to comply, they could end up in the dock and face prison time."
Under the proposed laws, regulators will be able to issue severe and automatic fines without having to direct resources to lengthy investigations, the Government said.
The legislation will also require independent monitoring of every sewage outlet and the reporting of discharges within the hour of the initial spill.
Water firms will now be required to fully monitor the 7,000 emergency overflows, which are only permitted to discharge raw sewage as a last resort from the network in the event of issues such as power outages or pump failures.
To ensure regulators are properly funded, the Bill will expand powers for the watchdogs to recover costs from water companies for enforcement action taken in response to their failings.
Ofwat will also be required to set rules that ensure companies appoint directors and chief executives, and allow them to remain in post, only when they meet the highest standards of "fitness and propriety".
Elsewhere, there will be a new statutory requirement for water companies to publish annual pollution incident reduction plans that outline the steps they are taking to address pollution incidents.
Alan Lovell, chair of the Environment Agency, said the regulator welcomed the Government's ambition to drive through "much-needed" reform.
"The Bill will give us, as regulator, more power to protect our precious water quality and resources, hold water companies to account and ensure the polluter pays," he said.
David Black, chief executive of Ofwat, said: "This Bill strengthens our powers and will help us drive transformative change in the water industry so that it delivers better outcomes for customers and the environment."
A Water UK spokesman said: "We agree with the Government that the water system is broken. 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 £105 billion investment plan in full to secure our water supplies, enable economic growth and end sewage spilling into our rivers and seas."
The Tories claimed Labour were "attempting to pass off measures implemented under the Conservatives" as their own, pointing to a ban on bonuses for water company bosses whose companies who commit serious breaches as an example.
Shadow environment minister Robbie Moore said: "It was the Conservatives that introduced 100% monitoring for storm overflows and set out a plan to transform our infrastructure to ensure safer, cleaner waters."