Ofwat has been given the power to ban bonuses for water firms when their performance is not acceptable and fails to meet environmental standards, under the Water Special Measures Bill.
These measures will kick in from June which means that Thames Water could have their bonuses blocked in June.
Thames Water which is the UK’s largest water company and has around 16 million customers, has debt of £19 million and was allowed to take further high-cost loan recently that could be as high as £3 billion to prevent the firm from collapsing.
Environment Secretary Steve Reed said, “Water companies got away with dumping a tidal wave of sewage into our rivers while pocketing millions of pounds of bonuses.
“That ends now. The Government will ban the payment of unfair bonuses for polluting water bosses. The days of profiting from failure are over.”
Thames Water’s chairman Sir Adrian Montague told MPs this week that bonuses valued at hundreds of thousands is needed to otherwise “head hunters come knocking.”
Sir Adrian told MPs, “We live in a competitive marketplace and we have to provide the right sort of packages to these people otherwise the head hunters come knocking.”
Chief executive Chris Weston has been slammed for having a £195,000 bonus after being in the job for just three months in 2024.
Gary Carter, GMB National Officer, said, “Paying out huge bonuses to failing water bosses would be a slap in the face to their workers and consumers alike.
“Like Thames Waters multiple owners, senior managers come and go, and Thames Waters pollution fines and finances go from bad to worse.
“The Thames Chair has got it wrong – it’s Thames Water’s loyal long serving workforce which are its most precious resource. They’re the backbone of the company and they deserve better pay and bonuses for keeping failing assets from falling over.
“It is the right call from the Government to step in and stop these bonuses.”
