Believe in tougher water regulation for England only when you see it
W elcome, then, 34 years after privatisation, to a new era of get-tough regulation in the English water industry. The Environment Agency will have powers to levy unlimited financial penalties on companies for pollution offences. Over at Ofwat, the economic regulator is changing companies’ operating licences so that dividends cannot be paid to shareholders if balance sheets are too flimsy or if environmental performance is too poor. It’s all backed by the government’s new and wider-ranging “plan for water” that landed on Tuesday.
Convinced? Well, after three decades of demonstrably soft regulation, the only rational response is to believe in the new era when you see it. That is not only because the government’s headline-grabber about a ban on plastic in wet wipes has been round the policy U-bend twice already, as the campaigner Feargal Sharkey noted.
The proposal for unlimited fines, for instance, is the government’s “preferred option” from its menu of choices, but the chair of the Environment Agency has already said it is not his. Questioned by a select committee of MPs last month, Alan Lovell wasn’t even keen on raising the cap on civil penalties – currently a feeble £250,000 – to £250m. “I think it should be in double figures of millions,” he said. “My personal view is in the £10m to £25m range.”
Lovell offered reasons: the agency will still prosecute in the most serious cases and courts already have unlimited fining powers; and double-digit sums still “hurt”. Even so, one might have expected more boldness from the new chair of an agency that has been lambasted for its timidity over many years. He is meant to be a figure to be feared.
Ofwat’s new authority over dividend payments may therefore be the one that concentrates
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