The UK Labour Government is taking decisive action to clean up our water sector, tackle environmental degradation, and hold water companies accountable after years of inaction.

The Water (Special Measures) Bill represents a change from the failures of the past, delivering on Labour’s commitment to protect our waterways and ensure the public and environment are put before private-sector profits. In Wales, the Welsh Government has agreed, in principle, to extend the Bill’s provisions to Wales.

A key feature of the Bill is the introduction of tougher financial penalties for water companies that flout the rules. Currently, regulators must conduct lengthy investigations to the criminal standard of proof (“beyond reasonable doubt”) before they can impose financial penalties, even for minor offences.

This Bill closes the gap in enforcement powers by lowering the standard of proof to the civil standard (“on the balance of probabilities”) and enabling Fixed Penalties to be imposed as Automatic Penalties for specific offences – allowing regulators to issue penalties more quickly, without having to direct resources to lengthy investigations and fight their way through miles of bureaucratic red tape.

Along with financial penalties, the Bill will significantly increase the ability of the Environment Agency and Natural Resources Wales to bring forward criminal charges against law-breaking water executives. These measures send a clear message: the days of impunity for water companies are over.

Emergency sewage overflows are not currently fully monitored. This Bill will change that by requiring water companies to install monitors on all emergency overflows.

To make it easier and quicker for regulators to investigate and punish wrongdoing, water companies will be required to publish real-time data (within an hour) for all emergency overflows in a clear, accessible format. This will create unprecedented transparency, enabling the public and regulators to see what is happening and hold water companies accountable.

We will continue to communicate to water companies that we expect them to achieve monitor installation at 50% coverage across overflow sites by the end of 2030 and 100% coverage by the end of 2035 – doubling the unacceptable 25% 2030 targets set by the last Conservative Government.

In parallel, water companies will be required to publicly outline their actions to reduce pollution through new annual Pollution Incident Reduction Plans (PIRPs). These plans will be mandatory and independently scrutinised – ensuring that water companies cannot hide behind a lack of data.

One of the most important parts of this Bill is the reform of the Special Administration Regime (SAR), a mechanism used if a water company collapses. Under the existing system, there are no guarantees that taxpayers won’t be left footing the bill for a failing company. This UK Labour Government is changing that – ensuring that those responsible for financial mismanagement—the water sector, not you, the taxpayer—bear the cost of failure.

We are clear: there will be no bailouts for shareholders or bondholders using taxpayers’ money under these new provisions.

Despite overseeing catastrophic failure, water chief executives have paid themselves over £41m in bonuses, benefits and incentives since 2020. We are changing this. Bonuses for water company executives will now be tied to environmental performance; customers will have stronger avenues to hold companies to account and compensation for service failures—such as ‘boil water’ notices—will be doubled.

Crucially, any funding ringfenced for infrastructure upgrades must be spent or returned to customers, ensuring it benefits the public, not shareholders’ pockets.

Labour’s bold reforms show we are serious about tackling these failures of the water industry head-on. After years of successive Conservative Governments prioritising private profits over public good, we are finally delivering the tough action we need.

Under the Conservatives, pollution incidents remained unacceptably high, fines were paltry, and investment lagged. The measures within this Bill will ensure water companies are held to account and drive the investment needed to upgrade our crumbling infrastructure after years of Conservative neglect.

We are committed to fixing this broken system and protecting our environment for future generations.