Why the whopping £1.6million payout for the Thames Water CEO spells disaster for Britain's future: ALEX BRUMMER

As the UK broils in record temperatures this summer, our water utilities have once again been caught embarrassingly short. A lack of fresh investment in reservoirs and a failure to develop a water grid, which can transfer resources from the rain glut in the North to the sun-scorched South, has tipped an often wet and windy island into yet another drought crisis. Over the years, our privatised water industry has serially failed to provide reliable supplies and keep the nation’s waterways and oceans clean. Despite this appalling record, its bosses are shamelessly awarding themselves fat-cat bonuses and payouts. The biggest of all the firms, Thames Water – with 16 million customers in London and along the Thames Valley – this week revealed it paid more than £4million in bonuses to its top officers and has boosted the pay of chief executive Chris Weston to £1.16million, an inflation busting jump of 9.4 per cent. This would barely seem fair if Thames Water was doing its job properly. But it is not. The firm sits on a staggering £18.5billion of debts, is on the verge of bankruptcy and was last year fined a record £122.7million for pouring raw sewage into the Thames and for the mismanagement of its finances. The incompetence of the company; its disregard for the environment and waterways into which it pumps toxic pollutants; its sheer contempt for consumers – all are egregious and incomprehensible, and that is before I have even mentioned the 40 per cent increase it imposed on water bills. Thames Water chief executive Chris Weston has seen his pay boosted to £1.16million, an inflation-busting jump of 9.4 per cent The water company sits on a staggering £18.5billion of debts and was last year fined a record £122.7million for pouring raw sewage into the Thames and for mismanagement of finances In its latest accounts, Thames Water showed the company has finally started making an operating profit thanks to the huge increase in bills. But this is no excuse to lavish yet more earnings on directors – every penny of profit should be used to start paying back that £18.5billion debt mountain. Just as disturbing, though, is the sheer stupidity of the grasping water bosses. For the revelations about these pay packets and bonuses – Thames paid a ‘chief restructuring officer’ £2.2million – come just as Andy Burnham moves into No 10. He has stated he is committed to some form of state or community ownership of water companies. The fat-cats’ hunger for ever-bigger payouts plays directly to the unvarnished socialism that guides Burnham and Labour’s army of Leftist backbenchers, who believe in State-knows-best nationalisation and wealth taxes on corporate villains. Environment Secretary Emma Reynolds, doubtless aiming to hang on to her job, has already taken aim at the Thames Water payouts, saying it’s ‘outrageous that one of the worst-performing water companies is handing out bonuses and inflation-busting pay rises to its executives’. ‘It flies in the face of basic fairness,’ she added, ‘and the British public are right to be furious. We’ve banned bonuses for polluting water bosses and will be taking action to prevent bonuses by any other name.’ And she is right. It is outrageous. But the idea that Burnham’s much-vaunted nationalisation plans are the answer is for the birds – as anyone who knows anything about the state of Britain’s public finances will tell you. The price of taking water into public ownership is calculated at £100billion, including debt on the books. For a nation struggling to meet its defence commitments, it is a cost which no UK government could possibly afford without causing a meltdown on the bond markets, where the nation borrows. Moreover, it would mean taking £20billion of debt on to the Government balance sheet from Thames Water alone. But state ownership is not the only threat. The sight of company bosses enriching themselves at the expense of consumers will also inflame Labour’s desire to impose a new layer of wealth taxes on Britain’s corporate leaders and entrepreneurs – irrespective of whether they are in the water industry or not. Chancellor Rachel Reeves’ attacks on the wealthy have so far seen an estimated 16,500 Britons flee to lower-tax locations. These are not just the super-rich and top investment bankers, though. A friend running a highly successful tech start-up, which pays large salaries, tells me that many of his top engineers and code writers have fled to Dubai, Milan and other locations where they now work remotely to avoid Reeves’ devastating taxes. And yet the water bosses behave as if they simply do not care. Many of the worst practices can be found among companies, such as Thames Water, that have fallen into the hands of financially driven private-equity and wealth funds from overseas. But those water firms which remain listed on the stock market are also playing fast and loose with the rules designed to prevent bonuses being paid to polluting firms. United Utilities, which provides water and wastewater services from its Warrington base in Burnham’s backyard of the north-west, is among the known offenders. Environment Secretary Emma Reynolds has taken aim at the Thames Water payouts, saying it’s ‘outrageous that one of the worst-performing water companies is handing out bonuses’ The Mail on Sunday recently reported that the company craftily devised a pay plan that hands its boss, Louise Beardmore, a £435,000 annual allowance in shares. The allowance was created to offset a bonus ban introduced by the industry regulator, Ofwat, over raw sewage spills. It means Beardmore’s total pay hit an eye-watering £2.5million at a time when the company is failing to meet pollution targets. Beardmore is far from being alone, though. This summer, residents of Tunbridge Wells and the south-east have been blighted by outages and discoloured water from their taps. Yet the chief executive responsible, David Hinton – who stepped down in May – received a cheque for £457,534, including a bonus of £115,000. Susan Davy – former boss of the publicly listed Pennon Group, which owns South West Water – last year received remuneration of £1.1million, including a bonus of £270,000, despite thousands of Devon residents being perilously polluted by a parasite known as cryptosporidium in 2024. At Severn Trent, ex-chief executive Liv Garfield regularly received £3million pay packages despite frequent fines for discharging raw sewage into rivers and a flawed billing system to customers. Collectively, the performance of the water companies is a national disgrace. A commission headed by former Bank of England deputy governor Sir Jon Cunliffe recommended radical reforms in August last year, including the replacement of the feeble regulator Ofwat by a new, greatly empowered body. The report argued for an overlord with sharper teeth, new ownership models, updated infrastructure and, above all, the restoration of trust – which has leached away down Britain’s drains. This is what Burnham and the new Labour government should be planning – the full and rapid implementation of the Cunliffe report, rather than any form of state or community ownership. He truly has a chance to make a difference because, as is so often the case, ministers and the Treasury have been sitting on their hands instead of taking emergency action as fat cat bosses dance around the rules, sewage is being dumped and hose pipe bans are proliferating. But whether he will grasp it, given his obsession with socialism and nationalisation, is another matter.