April 13, 2024

This is what the Labor Party needs to do to tackle the sewage crisis

The scale of England’s sewage crisis was revealed this week when official figures showed a record amount of sewage will be dumped into the country’s lakes, rivers and seas in 2023.

Labor responded to the shocking figures by calling on the Government to immediately ban bonuses for top executives of polluting water companies, but this demand was branded “weak” by campaigners.

If polls are to be believed, the Labor Party looks set to form the Government after this year’s general election, meaning the party will soon be responsible for resolving the dire state of Britain’s rivers.

Here I describes what needs to be done to resolve the sewage crisis:

What the Labor Party said it will do

At the forefront of the Labor Party’s sewerage plan to date, should it win this year’s election, is a proposal to give Ofwat the power to ban bonuses for bosses of polluting water companies.

Although this idea is widely supported, many activists feel it will have little impact. Ofwat is already consulting on the possibility of introducing such a measure and many water company bosses have turned down their bonuses in response to public outrage over sewage spills last year.

“Bonus bans are weak gestures. We want politicians to enforce the law to force water companies to invest – at their expense and that of their shareholders – and end this breach beyond the scale of the law,” said WildFish chief executive Nick Measham. I.

The Labor Party also said it would pursue criminal investigations into water company CEOs, but did not release further details about how it would do so.

“The public must judge all political parties on what they will actually do to make water companies obey the law,” added WildFish attorney Guy Linley-Adams.

Activists have suggested other ways the next government could combat river pollution:

Increase funding for the Environment Agency

Most NGOs and activists agree that poor regulation is at the root of the sewage crisis. They say water companies have for years been allowed to get away with flouting environmental regulations and dumping sewage illegally.

Any plan to reduce sewage pollution must therefore include a plan for the Environment Agency (EA). As I previously revealed, the watchdog is currently not visiting 90 percent of toxic water spills and has not renewed some of the water company’s sewer licenses in more than 50 years.

This comes in a context of budget cuts within the agency. Analysis by trade union Prospect found that government funding for environmental protection was cut by 50 percent between 2010 and 2022 in real terms.

“To realize the full potential of the Environment Agency, to reduce pollution, tackle waste and play a leading role in meeting the targets of the Environment Act, the Agency’s budget must be increased to at least £2 billion (up from £1 .65 billion in 2023/24),” said Richard Benwell, chief executive of Wildlife and Countryside Link, a coalition of 83 environmental organisations. I.

The Labor Party has not yet made any firm spending commitments on EA funding.

Wat renovation

There were also demands for a major reform of Ofwat, the body responsible for the economic regulation of water companies.

Ofwat is responsible for approving water companies’ business plans, which includes making decisions about how much companies will invest in infrastructure, how much they can charge customers and how much they will pay investors in dividends.

Environmental groups argue that the regulatory framework is currently too focused on making water companies attractive to investors rather than protecting the environment.

“One idea would be to impose a green duty on Ofwat to require them to essentially comply with Environment Law and climate change targets wherever possible,” said Ali Morse, water policy manager at the Wildlife Trust.

“They are currently an economic regulator, but this would make their work more explicitly environmental. This could help unblock things like the strict restriction of bonuses and dividends due to poor environmental performance, for example.”

Reconsider how water companies are structured

Linked to Ofwat reform is the wider question of whether England’s privatized waterways need wider restructuring.

The issue came to prominence as a result of the economic turmoil faced by England’s largest water company, Thames Water, which announced on Thursday that its investors were withholding funding as they claimed the regulatory framework imposed by Ofwat was making the company “uninvestable.” ”.

More broadly, water companies have been criticized for prioritizing shareholder dividends over infrastructure investment.

The question of what to do now is not something everyone agrees on. While some support renationalization, others fear that this will leave the taxpayer footing the bill.

James Wallace, CEO of River Action UK, is one of many calling for failed water companies like Thames Water to be placed into “special administration”, a process that sees the government temporarily take over a company to look for new investors.

Wallace said companies like Thames Water could then be “refinanced to remove opaque investment structures that have protected shareholders rather than bill payers, communities and the environment”.

The Liberal Democrats backed calls for Thames Water to be placed under special administration and said water companies should be transformed into “public benefit companies”, with a legal requirement to pursue environmental objectives while not getting more than a “reasonable” profit.

Labor has not yet gone that far, calling on the Government to “do everything in its power to stabilize the company and ensure that new investment comes in to fix the broken sewerage system, without taxpayers being left to foot the bill.” .

While there is no clear consensus on how water companies should be structured in the future, the Thames Water crisis makes it clear that any new government will need a credible and detailed plan for what to do with the troubled water sector in England.

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