Thames Water bosses could see their bonuses blocked as soon as next month under new powers for Ofwat.
The Water (Special Measures) Bill gave regulator Ofwat powers to ban bonuses when water companies fail to meet high environmental standards.
These will come into force from June, meaning Thames Water’s bosses could have their bonuses blocked next month, as well as having to return any paid for the last financial year, a Government source said.
Thames Water has been at the centre of growing public outrage over the extent of pollution, rising bills, high dividends, and executive pay and bonuses at the UK’s privatised water firms.
It also has about £19 billion of debt, and was recently allowed to take another high-cost loan which could reach £3 billion to stave off imminent collapse.
Environment Secretary Steve Reed said: “Water companies got away with dumping a tidal wave of sewage into our rivers while pocketing millions of pounds of bonuses.
“That ends now. The Government will ban the payment of unfair bonuses for polluting water bosses. The days of profiting from failure are over.”
Thames Water is England’s biggest water firm and supplies about 16 million households across London and the South East.
Its chairman told MPs this week that hundreds of thousands of pounds worth of recent bonuses for bosses were justified.
“We live in a competitive marketplace and we have to provide the right sort of packages to these people otherwise the head hunters come knocking,” Sir Adrian Montague said.
He admitted that bosses will receive millions of pounds in bonuses as part of the £3 billion loan agreed earlier this year.
Chief executive Chris Weston had already been criticised for accepting a £195,000 bonus for his first three months in the job last year.
