Water Companies: Executive Bonuses

Debate between Jerome Mayhew and Ruth Cadbury

Tuesday 5th December 2023 Commons Chamber

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

My constituents are not only bill payers and users of Thames Water, but they live with its decades-long failure to plan and invest. The River Thames flows alongside Chiswick, Brentford and Isleworth, where we walk, kayak, row and paddleboard. Too often, the Thames is polluted with dilute sewage just about every time it rains. Mogden sewage treatment works, covering 55 acres, sits in my constituency. For decades, Mogden has been a regular source of pungent sewage smells and a virulent subspecies of mosquito.

In February 2020, the streets and parks of Isleworth and the pristine Duke of Northumberland’s river was flooded with raw—not even dilute—sewage, because the main sewage intake into Mogden backed up and punched a hole through into the river. That was a direct result of maintenance failure and that issue not appearing on the risk assessment register. This debate matters to my constituents.

In October 2020, 2 billion litres of dilute sewage was discharged into the River Thames at Isleworth Ait over just two days. That was two thirds of the total discharges in 2020. In 2022, that same sewer storm outflow spilled 20 times for a total of 164 hours, discharging again into the River Thames. Just across the river at Petersham, another outfall regularly discharges. All of that is 10 years after Mogden sewage treatment works had its treatment capacity almost doubled.

I am struggling to find any evidence of any fines that Thames Water has received for the discharges I have just described. That is because they are planned. They are permitted discharges. The discharges of which we are notified are the only ones we know about, because, as the BBC “Panorama” investigation found, water companies appear to be covering up illegal sewage discharges, making sewage pollution disappear from official figures.

The water companies not only process our sewage and storm run-off, but supply fresh water. As other Members have already said, however, too much of that fresh water is wasted through pipe leaks. After too many water main bursts flooded shops and homes, we had, as my hon. Friend the Member for Hammersmith (Andy Slaughter) described, a programme to replace the Victorian fresh water pipes across the Thames Water area, but it seems to have stopped and we are just supposed to wait until the next burst happens. There is so much more that Thames Water could be doing to stop the leakages.

The overall picture of our water situation in the Thames Water area is a failure of oversight—a failure to upgrade the water and sewage infrastructure continually as London’s population grows, and as drought and heavy rain become regular aspects of our weather. For over 20 years—first as a councillor, and as an MP since 2015—I have been pressuring Thames Water to take action, as have the Mogden Residents’ Action Group, Hounslow London Borough Council and other residents. As a result of a legal challenge by residents, Thames Water was forced to increase the capacity of the sewage treatment works, to improve its reporting and to do continuous mosquito eradication.

Thames Water has also done some other work. We have had to put up with recent roadworks locally, because it has now installed a pipe to pump excess methane into the main gas grid, which is to be welcomed. We have had the multibillion-pound tideway project to take sewage out of the Thames, but it does not benefit those of us who live upstream of Hammersmith, so we are now faced with another expensive tunnelling project: the Teddington direct river abstraction scheme, which will address not high rainfall periods but periods of drought.

The Teddington DRA is designed to take millions of litres of water from the Thames, pump it across London to the Lee valley, and then replace that water with treated effluent from Mogden. That means a new pipeline and access shafts, so we are going to have a building site the size of half a football pitch on the Ivybridge estate, a low-income council estate in my constituency. The project will involve tunnelling beneath homes. It will also potentially impact on biodiversity in the River Thames and on riverside walks, and impact on river users as well. Are there really no alternatives to this three-year construction project across my constituency and those neighbouring it? The Environment Agency certainly raised doubts about the scheme when it wrote to Thames Water in March this year. The Teddington DRA will save only a 10th of the 630 million litres lost per day through leaks.

What are the rewards for this managed incompetence? Thames Water’s chief executive, Sarah Bentley, received a £496,000 pay-out last year. At least she had the good grace this year to say that it

“just did not feel like the right thing to take performance-related pay this year.”

I support the Opposition’s motion calling on the Government to enable Ofwat to block company bosses’ bonuses where high levels of sewage are being pumped into rivers; to end self-monitoring and force all companies to monitor every single water outlet; to ensure that water bosses face personal criminal liability for extreme and persistent lawbreaking: and to introduce severe and automatic fines for illegal discharges that bosses cannot ignore. We should not be dependent on whistleblowers to find out about failures. With a boost in the powers of the water regulator, water bosses who fail to meet high environmental standards on sewage pollution must be met with significant sanctions to ensure that they cannot profit from damaging the environment.

[Jerome Mayhew]

I am grateful to the hon. Lady for giving way and apologise more generally for jumping up and down like a jack-in-the-box. Is she aware of Ofwat’s press release of 29 June entitled “Ofwat delivers decision on executive pay”? In that, it says that it has recently announced

“new powers that will enable it to stop the payment of dividends”

directly and in full if a company does not meet its performance targets, including environmental targets. It goes on to say:

“In line with the new guidance”,

which it published that day,

“Ofwat expects water company remuneration committees to take full account of performance for customers and the environment”,

and that, if they do not, Ofwat will intervene on every single basis. Does she not accept that the powers are already in place and being used?

[Ruth Cadbury]

I would like to see them—I find that Ofwat is just too powerless. On dividends, Thames Water has not paid them for five years—so it keeps telling me—but that did not stop it until this year paying its senior executives very high dividends.

Why should my hard-pressed constituents face an average increase of £39 in their water bills? They have lost trust in Thames Water after years and years of scandal, putting up with smells, mosquitoes, building works, flooding and sewage through their streets and parks. Having met and talked to Thames Water for almost 20 years as a councillor and an MP, it is clear to me that it still has a lot to do to clean up its act. Bills are rising, service standards remain poor, and we continue to see raw sewage being pumped into the Thames.