Controversial bonuses paid to bosses of water firms that illegally spill sewage into rivers and seas could be banned.
Campaigners across the political spetrum have long called for the “insulting” financial incentives to be blocked after leaders at the companies pocketed more than £26million in bonuses and benefits over four years.
Senior executives from five of the 11 water companies that deal with sewage took bonuses last year – just as firms are planning to raise customers’ water bills by £156 to help pay for investment to prevent more sewage spills in the future.
Environment Secretary Steve Barclay now looks set to block payouts in the 2024-25 financial year.
Regulator Ofwat will consult on details of the proposed ban later this year, which could apply to chief executives and executive board members.
Mr Barclay said: “No one should profit from illegal behaviour and it’s time that water company bosses took responsibility for that.
“Tougher action is needed to address poor performance by water companies, which is why I am pleased Ofwat is going further today on bonus payments.
“In cases where companies have committed criminal breaches there is no justification whatsoever for paying out bonuses. It needs to stop now.”
An Ofwat spokesman said: “We introduced new measures last year to ensure that executive bonuses are linked to delivering better outcomes for customers and the environment.
“Today’s announcement builds on that approach but takes it even further. We will consult on the detail of the proposals later in the year.”
Lib Dem environment spokesman Tim Farron said: “Finally, ministers have buckled to a campaign led by the Liberal Democrats over two years ago but, even now, this attempt to ban bonuses sounds too weak and feeble.
“The public has looked on in fury as Conservative MPs defended these disgraced water firms and refused to crack down on insulting bonuses.
“Every day, these polluting and profiteering firms get away with environmental vandalism. The bonuses should be banned today, regardless of criminal conviction.”
Labour’s Shadow Environment Secretary Steve Reed said: “Once again Labour leads, the Conservatives follow.”
“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.”
“But they must go further and back Labour’s whole plan to clean up our rivers, and ensure that executives who are responsible for repeated illegal sewage dumping, face criminal charges.”