By Sarah Young LONDON (Reuters) -Thames Water, at the centre of a public backlash against Britain's privatised water industry, has halted a bonus scheme for its executives after ministers objected to
Thames Water Suspends Executive Bonuses Amid Government Pressure
By Sarah Young
LONDON (Reuters) -Thames Water, at the centre of a public backlash against Britain's privatised water industry, has halted a bonus scheme for its executives after ministers objected to the payouts.
The company, which is Britain's biggest water supplier with 16 million customers, has been struggling with billions of pounds of debt.
It secured a 3 billion pound loan in February to stave off financial collapse and some of the money was earmarked for bonuses of up to one million pounds ($1.34 million) each for senior management, or about 50% of their pay, under a retention scheme.
Environment minister Steve Reed told LBC Radio on Wednesday that the bonuses were "outrageous" and said he had told Thames Water he would take "all and any action" to stop the payouts.
Thames said it was pausing the scheme and it would wait for guidance from the water regulator Ofwat. Last year Ofwat stopped Thames Water from paying executive bonuses from customers' money.
"It has never been the Thames Water board's intention to be at odds with the government's ambition to reform the water industry," a spokesperson for Thames Water said.
"Following recent discussions, the board has decided to pause the retention scheme."
The British government wants to reform the water sector, which has been criticised by environmental groups and consumers for damaging Britain's rivers while raising customer bills and for failing to invest. A government-commissioned review will be published in June.
Reed said waterways would become cleaner as a result of a big rise in the number of inspections into sewage pollution in the last nine months which had resulted in the launch of 81 criminal investigations into water companies.
New legislation set out in September last year aims to toughen the oversight of water companies, with penalties including imprisonment for bosses if they obstruct investigations into the contamination of rivers, lakes and seas.
($1 = 0.7466 pounds)
(Reporting by Sarah Young, additional reporting by Muvija M. Editing by Jane Merriman)
