With parts of England the driest since records began – after five months of below-average rainfall – some homes have run out of water, rivers have dried up and farmers are facing crop failures. Many are furious with companies that have failed to invest in tanks, fix leaks and stop sewage from polluting their pipes. Bosses at England’s water companies have been criticized for bankrolling £58m in pay and benefits over the past five years. Since the privatisation, shareholders have been paid £72bn in dividends. The cash came from big debt, with companies borrowing £56 billion, and big bills, with prices rising 40%. Stuart Singleton-White, head of campaigns at the Angling Trust, said: “The profits made by water companies, which are effectively private monopolies, dividend payments to shareholders, inflated salaries and bonuses to CEOs and the debts that have been built up by these companies, mostly to prop up dividends and inflated wages, rather than fund investment, is a clear sign that the market is broken.” He pointed out that no new reservoirs had been built in England since the water companies were privatized and that chronic underinvestment had led to “unacceptable levels of leakage”. Water companies now leak around a quarter of their supply through old pipes, with 2.954 million liters a day leaking last year. “When the crisis hit, the water system was not ready,” Singleton-White said, blaming “water company greed, regulatory weakness and government complacency.” Even some Tory MPs say the money water company bosses are making is “unacceptable”. Former environment minister Rebecca Pow, who had a water portfolio, said the regulator should take tougher action and impose heavy fines on companies. He told the Guardian: “These wages are unacceptable if they cannot in good conscience provide clean, abundant and sustainable water. “But that also depends on the regulator.” He added: “We also have the opportunity to charge water companies 10% of their turnover in fines, so we will have to look at that.” Feargal Sharkey, the former Undertones singer turned Rivers advocate, agrees that the companies should face hefty fines, but pointed out that it is within the government’s control to do so. He said, “What [environment secretary] What George Eustice needs to do is something the government has had the power to do for 30 years – put in place an executive order where they can legally require water companies to do things exactly as the government chooses and when it wants the government”. Sharkey added: “If water companies were to lose 10% of their annual income, that would blow the mind, wouldn’t it?” Campaigners have argued that privatization is not working as England is an outlier on the world stage with fully private companies and water companies increasingly criticized for not investing in infrastructure. The Green party called for the nationalization of water companies. Caroline Lucas, MP for Brighton, said: “Water company bosses are taking home giant pay packets and giving themselves obscene bonuses and shareholders are reaping huge dividends – meanwhile what the rest of us get in return is widespread water leakage, chronic underinvestment and raw sewage pouring into our rivers. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. “The sooner we get the water companies back into public hands, the better. But that’s not enough – it’s now more urgent than ever to introduce pay rates legislation to enact the long-standing Green policy that ensures bosses don’t take more than 10 times the pay of the lowest paid in their companies, so that the tragic inequalities in our society they are finally being addressed.” Eight of England’s 14 regions are now classified as drought-stricken, with tire bans in place in more and more parts of the country. The Lib Dems first called for a ban on water company bonuses last week and on Monday the party’s environment spokesman Tim Farron told the Guardian: “Rich water company executives are profiting from Britain’s rusting water infrastructure. They are handing themselves multi-million pound bonuses while people this week have had to queue for bottled water in the heat all because of a refusal to fix leaks. These are the same executives who paid huge salaries despite pumping poisonous sewage into our rivers. “Ministers are looking the other way while this scandal is happening. You cannot trust this Conservative government to stand up for people and the environment. Instead, all they care about is keeping the CEOs of the water companies rich.” The Environment Agency recently called for water company bosses to be jailed for serious pollution after it found water companies’ performance on pollution had fallen to its worst for years. A spokesman for Water UK, which represents water companies, said: “Private investment has brought more than £160bn into a previously cash-strapped industry, while improving the water company’s profitability by over 70%. This efficiency means costs are lower, allowing bills to remain roughly the same for over a decade in real terms, while allowing for new investment in resilience projects and reduced leakage. “Dividends over the past two years have averaged around 3%, in line with Ofwat’s expectations. Most companies last year either lost money or failed to meet their core performance allowed by the regulator. “We are extremely ambitious about the further projects needed to protect against climate change. We have proposed large, transnational projects – including reservoirs and grid connections – that would provide enough new water for ten million people. It is vital that regulators now allow these programs to go ahead.”
