Water firms would be foolish to increase salaries to get around bonus ban
Environment Secretary Steve Reed has suggested that water companies would be 'extremely foolish' to increase salaries to try and get around a bonus ban.
Six firms have been banned from paying bonuses to senior bosses under new rules that came into force on Friday.
Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities and Southern Water have been told that they cannot issue bonuses for the financial year 2024/25, which concluded in April.
Mr Reed said that customers need to have 'confidence' in what water firms are doing, but also said it would not be 'right' for the Government or regulator to be 'capping' salaries in private sector businesses.
Asked if he was going to make sure that firms cannot raise base salaries to compensate for any bonus ban, Mr Reed told Times Radio: 'I think they would be extremely foolish to do anything of the sort that you're describing, because (…) these companies need to rebuild their broken relationship with their customers.
'Their customers need to have confidence in what they're doing, their customers are furious at the fact that they're seeing local waterways being polluted, but bosses taking multimillion-pound bonuses.'
He later told the BBC that it would not be 'right' for the Government or regulator to be setting salaries.
He told Radio 4's Today programme: ''I don't think it's right that government or regulators should be capping the salaries in private sector businesses.
'But those businesses need to have an eye on how their customers are feeling about what they are doing, and there are steps that you can take that are appropriate within regulation.'
The firms have all been banned under new rules which prevent bonuses from being paid if a water company does not meet environmental or consumer standards, does not meet financial resilience requirements, or is convicted of a criminal offence.
The six companies are not under an indefinite ban, and those firms may be able to offer rewards for the 2025/26 year, provided they stick within the Ofwat rules, under the Water (Special Measures) Act which comes into force on Friday.
If a company pays a bonus while it is under a ban, the water regulator Ofwat has the power to get the money back.
Under the new rules, Yorkshire Water, United Utilities, Thames Water, and Southern Water will all be unable to pay bonuses to the chief executive or chief financial officer, for the 24/25 financial year.
Anglian Water will be banned from paying its chief executive a bonus, but the chief financial officer will not be banned.
Wessex Water will be banned from paying its chief financial officer any extra, but the chief executive will be exempt.
The exemptions are because people were not in post when the incident that broke Ofwat's rules happened.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
31 minutes ago
- The Independent
Fraudulent City boss ordered to pay back £64 million
A City boss compared to the The Wolf Of Wall Street has been ordered to pay back £64 million over his role in a multi-million pound Ponzi-style investment scam, prosecutors said. Anthony Constantinou remains on the run after he fled the UK during his fraud trial at London's Southwark Crown Court in June 2023. Hundreds of investors were duped out of a total of £70 million between 2013 and 2015 while he ran Capital World Markets (CWM). A spokesman for City of London Police said a confiscation order was made against him on Thursday for the sum of £64 million, which is payable within three months. The default period of imprisonment was set at 14 years. Police released photographs of some of the luxury vehicles Constantinou spent his fraudulent money on, including a Porsche, Range Rover and luxury motorbike. They previously said he was thought to be in Turkey or Dubai after being stopped in Bulgaria with a fake Spanish passport. CWM had high-profile sponsorship deals with the Honda Moto GP, Chelsea Football Club, Wigan Warriors rugby league club, Cyclone Boxing Promotions and the London Boat Show. The seven-week trial heard how Constantinou spent £2.5 million of investors' money on his 'no expense spared' wedding on the Greek island of Santorini in September 2014, while his son's first birthday party a few days earlier cost more than £70,000. More than £470,000 was paid for private jet hire to fly him and his associates to Moto GP races across Europe as well as a return flight to Nice for a 150,000-euro five-day yacht cruise around the Mediterranean to Monaco. The firm paid £200,000 a quarter to rent 'plush' offices in the City's Heron Tower, while nearly £600,000 was spent on just six months' rent of his large home in Hampstead, north-west London, where his luxury cars were parked in the drive. Promised returns of 60% per year on risk-free foreign exchange (FX) markets, a total of 312 investors trusted their money to CWM. Some were professionals but most were individuals who handed over their life savings or pension pots, with a large number of Gurkhas paying into the scheme, said prosecutor David Durose KC. Constantinou denied wrongdoing but was found guilty of one count of fraud, two counts of fraudulent trading and four counts of money laundering and sentenced to 14 years in prison in his absence. Adrian Foster, of the Crown Prosecution Service (CPS), said: 'This was a callous scam targeting members of the public. Many people lost their hard-earned money because of Constantinou's greed and false promises in this fake investment scheme. 'We continue to pursue the proceeds of crime robustly with the City of London Police, where we identify available assets to disrupt and deter large-scale frauds like this case. 'In the last five years, over £478 million has been recovered from CPS obtained confiscation orders, ensuring that thousands of convicted criminals cannot profit from their offending. £95 million of that amount has been returned to victims of crime, by way of compensation.' Constantinou was previously jailed for a year at the Old Bailey in 2016 after being found guilty of sexually assaulting two women during after-work drinks. One of the victims described how the parties were just like the raucous scenes depicted in Martin Scorsese's The Wolf Of Wall Street, starring Leonardo DiCaprio as rogue New York trader Jordan Belfort.
The Independent
41 minutes ago
- The Independent
Liverpool complete £100m club-record signing of Florian Wirtz
Premier League champions Liverpool have completed the £100million club-record signing of Florian Wirtz from Bayer Leverkusen. The deal for the 22-year-old Germany international could potentially become a British record as there are £16m of add-ons included, which would surpass the existing mark of £115m which Chelsea paid for Moises Caicedo in 2023. It is understood Liverpool will be happy to pay these 'aspirational bonuses' as it will mean they have enjoyed considerable success at elite level. Wirtz has signed a five-year contract and the capture of one of Europe's most highly-rated talents is seen as a significant coup for the club having initially faced competition from Manchester City, Bayern Munich and Real Madrid. Leverkusen had valued Wirtz at £126m but a compromise was reached last week, although the up-front fee easily outstrips the £85m deal Liverpool agreed with Benfica in 2022 for Darwin Nunez, who is expected to leave this summer. Wirtz is Liverpool's second signing of the summer, following close friend and Leverkusen team-mate Jeremie Frimpong to Anfield, and with the Valencia goalkeeper Giorgi Marmadashvilli joining next month after a deal was agreed a year ago spending has already reached £175m. That is set to be pushed beyond the £200m mark with a £40m fee agreed for Bournemouth left-back Milos Kerkez. It is their biggest summer window since 2018 when Naby Keita, Fabinho, Xherdan Shaqiri and Alisson Becker were recruited for around £170m, with Virgil van Dijk having signed for £75m the previous January. Owners Fenway Sports Group have, despite their 'Moneyball' reputation, not been afraid to splash out big fees for transformative players like Van Dijk and Alisson – and Wirtz falls into that category. The club have already recouped around £26m with the departures of Trent Alexander-Arnold and Caoimhin Kelleher with further funds expected to be generated from the likes of Nunez, Harvey Elliott, Federico Chiesa and potentially Andy Robertson, who is a target for Atletico Madrid. 'I feel very happy and very proud. I was waiting for a long time – finally it's done and I am really happy,' Wirtz told the club's website. 'I'm really excited to have a new adventure in front of me. This was also a big point of my thoughts: that I want to have something completely new, to go out of the Bundesliga and to join the Premier League. 'I will see how I can perform there. I hope I can do my best. I spoke also with some players who played there and they told me that it's perfect for me and every pitch is perfect, you can enjoy every game. I'm really looking forward to playing my first game. 'I would like to win everything every year! First of all, we have to do our work, I have to make my work. 'In the end, we want to be successful. Last season they won the Premier League so my goal is for sure to win it again and also to go further in the Champions League. I'm really ambitious.'
The Sun
an hour ago
- The Sun
Transfer news LIVE: Liverpool ANNOUNCE Wirtz, Quansah to Leverkusen advancing, Leao to Bayern latest
Garnacho race Manchester United are reportedly hoping a bidding war erupts for Alejandro Garnacho. The Argentine is keen to seek pastures new this summer and the club are happy to cash in. The likes of Napoli, Atletico Madrid, Chelsea, Aston Villa and Tottenham have all been tipped with an interest. It is expected that the first bids will be in the region of £50million.
