To ask the Secretary of State for Environment, Food and Rural Affairs, if he will bring forward proposals to prohibit water companies from paying shareholder dividends until the number of combined sewer overflows incidents are reduced and bathing waters in their locality meet blue flag water quality standards.
Between 2020 and 2025, water companies will invest £3.1 billion in storm overflow improvements to reduce sewage discharges to our waters. This includes £1.9bn investment on the Thames Tideway Tunnel super sewer, as well as £1.2bn of other investment throughout England. £144m of this is new, additional investment as a result of a call to action from the Storm Overflows Taskforce.
Reducing sewage discharges and tackling their harm is one of our top priorities and I recognise there is more to be done. On 8 June 2021 the Government tabled amendments to the Environment Bill to introduce measures on storm overflows.
Bathing water quality can be affected by a number of pollution sources, including wastewater and run-off from agriculture. One of the four criteria for a Blue Flag is that beach water quality must be classified as Excellent. In 2019, 72% of bathing waters in England were classified as ‘Excellent’.
Decisions on dividends for water company shareholders are made by water company boards. Company boards carry out these decisions within the framework of regulatory price controls, licence conditions and company law. Ofwat is responsible for economic regulation of the water companies. Among Ofwat’s statutory duties is a duty to ensure that companies carry out their functions and are able to finance them, and that water companies protect the interests of consumers. Where companies fail to meet their obligations, Ofwat has enforcement powers. To secure compliance and change behaviour they can obtain legally binding undertakings and impose enforcement orders. For the most serious contraventions they can impose financial penalties on companies.