Under the new Water Special Measures Bill, Ofwat can prohibit bonuses for water companies that perform poorly and violate environmental regulations, effective from June. This regulatory change particularly impacts Thames Water, which holds a massive debt of £19 million and is facing challenges, including high-cost loans to avert collapse. Environment Secretary Steve Reed emphasized that profits from environmental failures, like sewage dumping, will no longer be tolerated. Meanwhile, Thames Water executives defend their bonus structures as necessary for competitive talent retention amid criticism for excessive payouts.
Ofwat's new powers under the Water Special Measures Bill can ban bonuses for underperforming water companies, effective June, targeting Thames Water's financial practices.
Environment Secretary Steve Reed stated, '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 defended bonuses as necessary to attract talent amidst competition, emphasizing, 'We live in a competitive marketplace...'
Gary Carter of GMB criticized the bonuses given to failing managers, stating, 'Paying out huge bonuses to failing water bosses would be a slap in the face to their workers and consumers alike.'
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