Water bills to see ‘small, steady' rise despite reform plans, says Reed
Those plans are thought to include action to tackle sewage spills, invest in water infrastructure and the abolition of the industry's beleaguered regulator Ofwat as ministers seek to avoid a repeat of this year's 26% increase in bills.
But while Mr Reed has promised that families will never again see 'huge shock hikes' to their bills, he was unable on Sunday to rule out further above-inflation increases.
Although he told Sky News's Sunday Morning With Trevor Phillips that bills should be 'as low as possible', he added that there needed to be 'appropriate bill rises' to secure 'appropriate levels of investment'.
He said: 'A small, steady increase in bills is what people expect.'
Government sources have argued that the recent large rise in bills was necessary to pay for investment in long-neglected infrastructure, but expect Mr Reed's promised reforms to make further rises unnecessary.
Asked about the possibility of expanding social tariffs to help households struggling with bills – a move that could see wealthier families pay more – Mr Reed said he had 'not been convinced yet' that this was necessary.
Earlier on Sunday, Mr Reed had pledged to halve sewage pollution in England by 2030, after the Environment Agency said serious pollution incidents had risen by 60% in 2024.
Mr Reed said the measures the Government was taking would enable it to significantly reduce pollution, with the aim of completely eliminating it by 2035 should it be re-elected.
He also suggested to the BBC that he would resign if the 2030 target was not achieved, provided he was still in the same job by then.
His comments come before a major report by former Bank of England deputy governor Sir Jon Cunliffe, which is expected to recommend sweeping reform to water regulation on Monday.
Sir Jon has been widely reported to be preparing to recommend the abolition of Ofwat, which has faced criticism over its handling of sewage spills and allowing water companies to pay large dividends while taking on significant debt and missing targets for investing in infrastructure.
On Sunday, Mr Reed would not say whether he would scrap Ofwat, but also declined to say he had confidence in the regulator.
He told the BBC's Sunday With Laura Kuenssberg: 'The regulator is clearly failing.'
Sir Jon's interim report criticised regulation of the water sector, which is split between economic regulator Ofwat, the Environment Agency and the Drinking Water Inspectorate.
But on Sunday, Conservative shadow communities secretary Kevin Hollinrake said he would be concerned any changes 'might just be shuffling the deckchairs on the Titanic'.
He told the BBC: 'It's really important the regulator's effective, and we put in a lot of measures to give Ofwat more powers to regulate the water industry and a lot of those things were very effective.'
Liberal Democrat leader Sir Ed Davey said he backed scrapping Ofwat, calling for a new Clean Water Authority to 'hold these water companies to account'.
Sir Ed has also called for the Government to go further and aim to eliminate sewage pollution entirely by 2030, saying voters were 'fed up with empty promises from ministers while Britain's waterways continue to be ruined by sewage'.
He added: 'For years water companies have paid out millions in dividends and bonuses. It would be deeply unfair if customers are now made to pick up the tab for this scandal through higher bills.'
Although sweeping regulatory reform is likely to be on the table, full nationalisation of the industry will not be after the Government excluded it from Sir Jon's terms of reference.
Smaller parties such as the Greens have called for nationalisation, while on Sunday Reform UK's Nigel Farage said he would look to strike a deal with the private sector to bring 50% of the water industry under public ownership.
But Mr Farage was unable to say how much this would cost, leading Labour to accuse him of having 'nothing to offer apart from bluster', and shadow Treasury minister Gareth Davies to say he was 'flogging billion-pound promises with no plans to deliver them'.
Mr Reed argued nationalisation would cost 'upwards of £100 billion', diverting resources from the NHS and taking years during which pollution would get worse.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BBC News
3 hours ago
- BBC News
Hundreds of protesters gather at asylum hotel in Norwich area
Hundreds of people have gathered for a protest outside a hotel housing asylum arrived at the hotel in the Norwich area with St George's flags, placards and banners, some reading "Stop the invasion".A BBC journalist at the scene said at least 200 people were were present as protesters, some standing in the road, listened and cheered a number of speeches delivered from the back of a parked lorry. On Monday, about 150 protesters gathered outside a hotel in Diss, Norfolk, housing asylum-seeking families in protest again Home Office plans to house single adult males there men were arrested on Saturday morning on suspicion of affray in relation to a protest at the Diss hotel and an earlier one at the hotel in the Norwich groups have also clashed outside The Bell Hotel in Epping, Essex, during several demonstrations since 13 people have been charged with offences in relation to disorder there. Follow Norfolk news on BBC Sounds, Facebook, Instagram and X.
The Guardian
3 hours ago
- The Guardian
Water chiefs' pay rises to average of £1.1m despite ban on bonuses and outrage over pollution
The pay of water company chief executives in England and Wales rose by 5% in the last financial year to an average of £1.1m, despite a ban on bonuses for several companies and widespread outrage over the sector's poor performance. Total pay reported by water companies reached £15m in 2024-25, up 5% on £13.8m the previous year, according to Guardian analysis of 14 companies' annual reports. Water companies have been under scrutiny in recent years over their record on the environmentally damaging discharges of sewage into Britain's rivers and seas. Politicians and campaigners have also reacted angrily to bill increases allowed in April by the regulator, Ofwat. The pay figures raise questions about the effectiveness of the government's efforts to limit water executives' pay. Ofwat gained powers last year to insist that bonuses were paid by shareholders rather than through customers' bills, before new rules in June that allowed a ban on bonuses for bosses of companies guilty of the most serious environmental damage. The biggest pay increase was enjoyed by Keith Haslett, the chief executive of Affinity Water. He was awarded an extra £844,000, doubling his total pay to £1.6m. Portsmouth Water's boss, Bob Taylor, also doubled his pay, to £754,000. Six companies – Thames Water, Anglian Water, Southern Water, United Utilities, Wessex Water and Yorkshire Water – were banned from paying bonuses for the 2024-25 financial year to their chief executives and chief financial officers. The bonus ban did appear to have an effect, with pay falling 8% to £5.5m across those six suppliers. Most of that drop was driven by Thames Water, whose boss, Chris Weston, received £1m, after he and three predecessor chief executives received a total of £1.7m the year before. Despite the bonus ban, Southern Water awarded its chief executive, Lawrence Gosden, an 80% pay increase to £1.4m. After the Guardian revealed the increase, the environment secretary, Steve Reed, said Gosden should turn down the extra money. Southern Water said the pay increase complied with the rules. A spokesperson said it was not a bonus but part of a 'two-year long-term incentive plan'. Not all the money was paid during the financial year, and he may not receive all of it if Southern fails to achieve an adequate environmental rating. Sophie Conquest, lead campaigner at We Own It, a group campaigning for public ownership of water, said: 'The public is rightly angry about the obscene levels of cash being handed over to the private water bosses. 'What has their highly valued commercial brilliance delivered for us? Water bills hiked by 30% and the ongoing vandalisation of our rivers and lakes. No new reservoirs built in 30 years, and 3bn litres of water lost daily to crumbling pipes. 'Never in the field of essential public services has so much been earned by so few for doing so little.' Pay for chief financial officers pay fell 3% to £7.6m for the 12 water companies who disclosed it, although that decline was driven by a steep drop from £1.3m to £636,000 for the since-departed Alastair Cochran at Thames Water as the company neared collapse. Aside from Thames, CFO pay rose by 7% on average during the year. The highest-paid water boss was Liv Garfield, of Severn Trent, a FTSE 100 company that supplies 4.6m households across the Midlands and north Wales. She was granted £3.3m during the financial year. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The lowest-paid water chief executive was David Hinton, of South East Water, who received £456,000 – still well above the £270,000 salary for the head of the NHS. Luke Hildyard, the executive director of the High Pay Centre, which campaigns against 'excessive' pay, called for water company salaries to be limited to 10 times the lowest earners. 'Many people have found it hard to reconcile the litany of financial, environmental and customer service disasters variously afflicting these companies with top pay awards that have frequently exceeded £1m,' he said. 'Is a clean, reliable water supply really so contingent on these seven-figure pay awards?' A government spokesperson said: 'Undeserved bonuses for water company bosses have now been banned as part of the government's plan to clean up our rivers, lakes and seas for good. We also have ringfenced customers' bills to ensure investment must be spent on new sewage pipes and treatment works, not bonuses. 'Any instances of companies trying to circumvent the new rules are completely unacceptable. The government will leave no stone unturned against any bosses being made these payments.' A spokesperson for Water UK, a lobby group, said: 'Executive pay in the water industry is independently determined by remuneration committees, which abide by the laws and regulations set by government. 'Water companies are focused on investing a record £104bn over the next five years to secure our water supplies, end sewage entering our rivers and seas and support economic growth.'
The Guardian
3 hours ago
- The Guardian
Call to make wet wipe producers pay for polluting England's waterways
Wet wipe producers should be charged to remove their pollution from England's waterways, the author of a government review into reforming the sector has said. Sewage has been a critical factor in the devastating pollution of our waterways, but other sources of pollution include microplastics, consumer products such as wet wipes, and the byproducts of modern manufacturing, such asPfas ('forever chemicals'), as well as fertiliser and pesticides from farming. Many of these have been linked to harmful effects on human health and the natural environment. The fairest way to deal with this, Sir Jon Cunliffe, a former Bank of England deputy governor, said, could be to apply the 'polluter pays' principle, whereby the company behind the pollution contributes towards its removal. 'The alternative is for everyone to pay for it through their bills, and the question is, should we spread that among everybody, or should we go through a polluter pays route? So I think, really, we should look at those routes,' he said. It has been a landmark week for the water sector, after Cunliffe published a major review containing recommendations on how to clean up England's filthy rivers and seas. The regulator Ofwat is to be abolished, the government has pledged, and a new, powerful, super-regulator created to better hold water companies to account. Campaigners welcomed many of the recommendations, in particular ending the self-monitoring of water companies, which currently voluntarily publish information on how much sewage they dump. Citizen scientists have argued for years that this system is open to under-counting, and have tried to shed light on the true amount of human waste in waterways: under new proposals sewage spills will be automatically published online. But there are those who felt this was a missed opportunity. The environment secretary, Steve Reed, took nationalisation out of the scope of the review from the outset, and also told Cunliffe not to consider more radical approaches such as turning companies into not-for-profits. This despite the fact that it is the mismanagement of water companies as much as the dumping of sewage that has enraged the public. So what of the idea that polluters – the upstream companies that generate some of the worst pollutants in our waterways such as wet wipes and Pfas – should pay? 'One of the best ways to deal with stuff not going into our rivers is not to let it into the sewers in the first place,' Cunliffe said, 'Why do we need wet wipes?' 'I have some sympathy for the water companies,' he said, 'because the drinking water system is closed and no one can touch it unless authorised to do so. The wastewater system is open. Anybody can put anything down the loo, and then at the treatment works, I've seen literally huge machines taking wet wipe mountains out of the sewage system.' Water companies claim that wet wipes, which shed microplastic particles and also build up into major blockages, are the main cause of sewage pollution. John Penicud, Southern Water's managing director for wastewater, said recently that 'the majority of wastewater pollutions are caused by wet wipes, fats, oils and grease being flushed down toilets and sinks', and called for wet wipes to be banned. The EU is introducing quaternary treatment, a more advanced method than that used in the UK. This has powerful filters that remove these trace chemicals from the water supply, but is expensive, so the bloc is looking at making the producers of these chemicals pay a levy that would then be used to create these treatment plants. Producers would be required to cover at least 80% of the costs associated with the sewage treatment upgrades necessary for removing these substances from wastewater. Cunliffe thinks the UK could look at adopting a similar approach for wet wipes; as a side-effect this would make plastic wet wipes more expensive, which would discourage their use. His report has recommended looking at adopting the EU laws in the UK, and investigating the prevalence and impact of these micropollutants in the environment and on human health. This way, he says, 'it's not the water bill payer who pays to take it out, but the people who make and buy the products … Pfas and so on will require quaternary treatment, and there are currently three levels of sewage treatment. To build another would be expensive.' The question, he said, was whether the user or the polluter paid. A Water UK spokesperson said: 'Removing Pfas 'forever chemicals' and other micropollutants from the water environment is a huge challenge because current sewage technology was never designed to deal with them. We need a national plan from government for upgrading sewage treatment that is paid for by chemical manufacturers instead of water bill payers, as well as a ban on Pfas products that will otherwise keep making the problem worse.'
