The Water (Special Measures) Bill is a new law that parliament is currently deciding whether to pass. The new law is stage one of the Government’s longer-term plan to clean up our river’s lakes and seas. The Bill will apply in England and Wales and delivers on the commitments the Labour Party made in their manifesto. 

Don’t get us wrong, the Bill is a good step forward and we are stoked to see the Government starting to take action. It includes things like stopping bonuses being paid to polluting water company bosses, creating automatic fines for polluters and ensuring every single sewage overflow must be monitored.  

But the Bill, as it stands, fails to tackle our fundamentally broken water industry and tackle profit from pollution. 

If a water company runs out of money or stops being able to deliver its duties to provide clean water and treat sewage it should be placed into ‘Special Administration.’  

Special administration is when the Government appoints an administrator to take control of that company temporarily to ensure essential services are being delivered. This is a good thing, as it takes control away from bosses who have been failing to do their job and allows the water company to be reformed into a more sustainable model. 

The Bill, as it stands, protects taxpayers from the costs  special administration brings, but it means that the costs, like paying off a water company’s debts or buying out shareholders, could be placed on one or even all water companies; which, in turn, the water companies could pass onto customers in the form of higher bills. 

In reality, this could mean the cost of bailing out the billions of pounds of debt racked up by the likes of Thames Water could ultimately be placed on every water company billpayer around the country. 

This is unacceptable. Neither customers nor taxpayers should be made to bail out water company shareholders or the debt polluters have racked up as result of mismanagement.  

This is unacceptable. Neither customers nor taxpayers should be made to bail out water company shareholders or the debt polluters they have racked up as result of mismanagement.  

The Government’s own policy statement that explains how the bill could be used states: 

“The bill introduces a power for the Secretary of State to modify water company licenses to recover a shortfall in government costs at the end of special administration. This additional power will give flexibility to the Secretary of State to recover any shortfall in funding in a manner appropriate to the circumstances. For example, they will be able to decide if they want to use this power and whether losses are recovered from a single company, some or all water companies. The recovery mechanism will be subject to consultation with all relevant sector stakeholders.” 

https://www.gov.uk/government/publications/water-special-measures-bill-policy-statement/water-special-measures-bill-policy-statement  

The Government’s explanatory note, which goes to all politicians to explain how the Bill works, also states:   

“The modifications can require a water company to raise amounts of money determined by the Secretary of State from its consumers, and to pay those amounts to the Secretary of State to make good any shortfall and may include a requirement that amounts be held on trust pending payment to the Secretary of State.” 

https://bills.parliament.uk/publications/56100/documents/5022  

So, whilst we welcome the fact that the Government is trying to take action to protect taxpayers from the costs of sorting out failing water companies, this bill just allows that cost to be pushed onto billpayers. Who are also taxpayers.  

The Government in a statement has said that they have no current plans to use customer money to bail out water companies, and that ‘these powers would never be used to pay bondholders, shareholders or creditors.’ https://deframedia.blog.gov.uk/2024/09/19/misleading-coverage-on-the-water-special-measures-bill/  

So, if this is the case, the Government should have no issue in changing the Bill to ensure neither tax- nor billpayers pay up to bail out water company shareholders or pay off water company debt.  

The Bill already makes sure that taxpayers don’t have to pay to bail out water companies. We want the Government to change the Bill to ensure that the Government is also protecting water company customers and ensuring neither taxpayer or billpayers have to pay to bail out water company debts or pay off water company shareholders. 

The Government has repeatedly told us that they have ‘no plans’ to use this power. So, why won’t they simply change the bill to ensure it never happens? 

We are working with lots of other partner organisations, MPs and members of the House of Lords to introduce changes/ amendments to the Bill whilst it goes through Parliament. 

One of these amendments inserts a new clause into the Bill that ‘prohibits the bail-out of water company shareholders and creditors.’ We are demanding that the Government adopt this amendment. 

Ofwat, the economic regulator of water companies in England and Wales, currently has no legal duty to protect the environment or nature. Instead, their key legal duty is to make ‘reasonable returns for water companies’. This means that for the last 30 years, Ofwat’s decisions have always been led by making sure water companies make a profit. This is one of the main reasons we are in the mess that we are in. 

In this bill, the Government has a real opportunity to reshape the priorities of the water sector to protect public health and the environment, not to make profit for shareholders. 

As a result of the hard work of campaigners and the support of members of the House of Lords, the Government has already started to make changes to the Bill. In particular, they have introduced an amendment that ensures Ofwat has ‘due regard’ for targets set out in the Environment Act and Climate Change Act. However, we think this duty is weak and still does not remove Ofwat’s duty to make returns for water companies. 

As long as Ofwat still has a legal duty to make money for water companies, they will continue to make decisions that are not in the best interest of the public and the environment. This is the Government’s opportunity to change this for good. 

Yes, the system is broken, and whatever happens with this Bill, we need to completely transform how the water industry works. But that’s going to take a long time. In the meantime, it’s crucial the Government acts now to clean up our rivers, lakes and seas and doesn’t just kick the can down the road. This is the first step. 

Already signed the petition? Then the next step is taking the issue up with your local MP and demanding that they take action to strengthen the Water Bill and end profit from pollution. 

Use this tool to Email your MP. Pledge to Protect the Ocean – Surfers Against Sewage   

The new Government was elected on a promise to clean up our rivers, lakes and seas. But so far, they are tinkering around the edges. At the same time, they are being lobbied by the water industry to keep things just the way they are. We need to show those in power that this is unacceptable, and we need as many voices united as possible to drown out the noise from the water company lobbyists.  

The Bill covers England and Wales, so our specific demands are most relevant to people who live in England and Wales. But the principles the petition represents are relevant no matter where you live! There should never be profit from pollution, so you can still sign to show your support.