Water firms could escape higher fines for pollution as ministers row back on tougher penalties

Last week Simon Jupp asked questions and now we hear that the government wasn’t really listening. 

Thérèse Coffey is backtracking on plans for penalties having already extended clean up deadlines to 2035. The Times launches a Clean It Up campaign. – Owl

Chris Smyth www.thetimes.co.uk

Water companies are set to avoid big fines for spilling sewage into rivers and seas as ministers fear the multimillion pound penalties could backfire.

Thérèse Coffey, the environment secretary, is understood to believe fines of up to £250 million for polluters are “disproportionate” and is backing away from the plans.

A consultation due to open soon is expected to provide an opportunity to water down the planned increase in fines as regulators argue against “crazy” high penalties.

The Times today launches Clean It Up, a campaign to push the government and polluters to clean up the country’s rivers, lakes and beaches.

It calls for a beefed-up Environment Agency, jail sentences and fines for water bosses responsible for repeated and serious pollution incidents, help for farmers to curb their impact on the environment, and more designated bathing waters.

In an article for The Times, the water quality activist Feargal Sharkey backs the campaign, saying: “I hope our politicians start holding the likes of the Environment Agency and economic regulator Ofwat to account.”

Ministers last year promised a thousand-fold increase in the maximum fines for water pollution following persistent sewage spills into rivers and seas.

Ranil Jayawardena, Coffey’s predecessor, said such high levels of pollution were “not on” and set out plans to increase fines from £250,000 to £250 million after dressing down water company bosses.

However, Coffey is said to have resisted the measure while she was deputy prime minister under Liz Truss and has refused to commit to higher fines.

Allies say that as part of the consultation process she wants to “make sure that fines are proportionate and easy to enforce”, saying she will “look at the evidence with a fresh pair of eyes and do what is most effective”.

There are also concerns that threatening companies with vast fines could scare off investors from lending money needed to fund £56 billion in waterway infrastructure upgrades demanded by ministers. However, Defra insists that the biggest penalties are “still on the table”. Those close to Coffey insist that she believes levels of pollution are “unacceptable” and that companies should pay for breaking the law. They argue that her priority is an effective deterrent rather than eye-catching numbers, saying she wants to bring “an open mind” to the best way to tackle sewage spills.

Others who have worked with Coffey in the job have concluded she is “super focused” on finding better environmental protections, saying they were pleasantly surprised she had not turned out to be “a Trussite who doesn’t care about the environment”.

Environment campaigners and opposition politicians, however, said that rowing back on the plan for higher fines sent the wrong signal.

Ashley Smith of the Windrush Against Sewage Pollution group, based in Oxfordshire, said: “The upper limit of £250 million does not prevent the penalty being applied at a lower level, so it is very hard to see why the secretary of state is wasting more time and taxpayers’ money on doing something that can only bring a smile to the faces of water industry shareholders and senior executives.

“It could be seen as a notional victory for them and reassurance that the big investment funds still hold more weight than the public and environment in government circles.”

Jim McMahon, the shadow environment secretary, said: “I think the danger the Tories have is they’re reneging on their already quite weak position on the £250 million cap. But more than that, it’s the message it sends out, which is business as usual.”

The Environment Agency has never used its civil powers, granted in 2010, to fine companies and Coffey wants to look at how they can be reformed to deter pollution more effectively.

Alan Lovell, chairman of the Environment Agency, is already pressing ministers to drop the proposed £250 million penalties. In a speech last month he described the plans as “crazy”, “massive” and “way in excess of what’s needed”.

He accepted that the maximum fines needed to rise from £250,000, which he said was “unfortunately not enough to make a difference to a water company’s behaviour”, but stressed the need to speed up the penalty process.

There is an existing mechanism for the EA to impose civil sanctions — the variable monetary penalties regime. However, secondary legislation would be required after the consultation to change the cap, so water companies can be fined more than £250,000 for serious pollution incidents.

A Defra source insisted that £250 million fines were “definitely still on the table”. The source added: “The environment secretary is very clear that she wants to consult on that proposal, along with other options. Ultimately we have to make sure that regulators have the powers they need to hold water companies to account.”

Who are the water company bosses and how much do they earn?

Top, from left: Susan Davy, Sarah Bentley, Liv Garfield, Steve Mogford Bottom: Lawrence Gosden, Heidi Mottram, Peter Simpson, Colin Skellet

Top, from left: Susan Davy, Sarah Bentley, Liv Garfield, Steve Mogford Bottom: Lawrence Gosden, Heidi Mottram, Peter Simpson, Colin Skellet

Anglian Water Peter Simpson

Pay £1.3 million

Number of storm overflow spills (2021) 21,351

Simpson has been chief executive since 2013 and is co-chairman of the Prince of Wales’s corporate green leaders group at the University of Cambridge.

In his own words “While implementing bans should always be a last resort, we also believe the time has come to enforce a complete ban on the sale of wet wipes that do not adhere to Fine to Flush standards.”

Northumbrian Water Heidi Mottram

Pay £648,000

Spills 36,483

Chief executive since 2010, Mottram last year joined the board of the Great British Railways Transition Team.

In her own words “Northumbrian Water has always been an incredibly environmentally conscious business.”

Severn Trent Water Liv Garfield

Pay £3.9 million

Spills 59,684

The water industry’s best-paid chief executive, Garfield is thought by some politicians to have one of the sector’s more progressive approaches to water pollution. A former chief executive at BT broadband division Openreach, she was recently tipped to lead Vodafone.

In her own words “We spend our money on the activities that customers desire . . . Even two years ago, it [water pollution] wasn’t on the priority list.”

South West Water (Pennon) Susan Davy

Pay £1.6 million

Spills 42,484

Chief executive since 2020, Davy has blamed South West Water’s poor record on sewage spills on “population growth, tourism and lockdowns”, but says pollution levels are lower than a decade ago.

In her own words “The [environmental performance] rating for South West Water will be one star for 2021 and I want to acknowledge this is not where we need to be, and it is deeply disappointing.”

Southern Water Lawrence Gosden

Pay Unpublished

Spills 19,077

Gosden was appointed in July to lead Southern Water, which was fined a record £90 million for water pollution in 2021. His predecessor, Ian McAulay, was paid £1.4 million a year.

Thames Water Sarah Bentley

Pay £2 million

Spills 14,713

Bentley has headed up the UK’s biggest water company since 2020, when she joined it from Severn Trent. The company recently published a live map showing sewage spills.

In her own words “Like many of you, I care passionately about the health of rivers. As well as providing a wonderful home for so many species, they provide an escape from the intensity of everyday life.”

United Utilities Steve Mogford

Pay £3.2 million

Spills 81,588

Mogford is due to step down as CEO early this year, after leading the company since 2011. He is the second-highest paid water boss.

In his own words “I think [there’s] a lot to do, to work with the EA [Environment Agency] and Ofwat through their investigations [into sewage pollution by United Utilities] and we’ll see where that goes. But I think at this point, we’ll work with the agencies. We feel we’re very transparent.”

Wessex Water Colin Skellett

Pay £975,000

Spills 23,524

An industry veteran, Skellett has led Wessex Water since privatisation in 1989 and has been described by friends as having a “very humble beginning” on a Nottingham council estate.

In his own words “[I welcome the] spotlight now being thrown on river water quality.”

Yorkshire Water Nicola Shaw

Pay Unpublished

Spills 70,062

A former executive officer at National Grid, Shaw was appointed to head Yorkshire Water in May. She took over from Liz Barber, who was paid £1.4 million.

The Times is demanding faster action to improve the country’s waterways. Find out more about the Clean It Up campaign.

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