Water Company Executives: Undisclosed Payments

The Conservative Government allowed millions of pounds to be diverted from essential investment and used for unjustified bonuses. We are clear that executive pay must reflect company performance, and support Ofwat’s plan to consult on requiring companies to report publicly the details of all executive remuneration.

Just last month, The Guardian reported that the chief executive officer and chief financial officer of Wessex Water received around £50,000 in undisclosed payments from a parent company. Just weeks before, it was reported that a former Wessex Water boss was handed a whopping £170,000—again from a parent company. The galling part is that both payments were made in the same year that Wessex Water was slapped with a ban on paying bonuses. With all that in mind, does the Minister agree that if bonuses can simply be rebadged as extra payment from parent companies, we must urgently toughen up the bonuses ban so that we can finally hold failing water company bosses to account?

This situation baffles me. It seems simple to me that bonuses should reflect performance, and if performance is not good enough, people should not get a bonus. I am not sure why that seems so difficult to understand. It is not just about the letter of the law, but about the spirit of the law. Ofwat has exposed serious transparency failings across the water sector, and we are therefore tightening transparency rules to shut down any attempt to dodge the bonus ban.

Welsh Water’s chief executive has one of the highest paid jobs in Wales at almost £900,000 a year, and the company is hiking basic pay to get around the Government’s crackdown on executive bonuses, despite being a not-for-profit. That is even though Welsh Water presides over some of the worst sewage dumping and leaks in the UK and sky-high price rises. Will the Minister look into companies trying to bypass the new regulations in that way and ensure that those loopholes are closed?

With respect, I think the hon. Gentleman has just made the case for why mutualising water companies is not the answer on performance. This Government have already banned more than £4 million in unfair bonuses, which have been blocked by Ofwat for 2024-25.