Water Companies: Investment Income

Department for Environment, Food and Rural Affairs written question – answered am ar 2 Ebrill 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Steve Reed Steve Reed Shadow Secretary of State for Environment, Food and Rural Affairs

To ask the Secretary of State for Environment, Food and Rural Affairs, what estimate he has made of the total dividends paid to shareholders by water companies in each year since 2010.

Photo of Robbie Moore Robbie Moore The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

Based on data from Ofwat the total dividends paid to shareholders by water companies in England between 2010 and April 2022 amounts to just under £23.4 billion. In each year since privatisation, investment has been greater than dividends paid.

We are clear water companies must not profit from environmental damage and through the Environment Act 2021 have given Ofwat increased powers that will better enable them to hold companies to account for their performance.

Using these powers, Ofwat introduced a new licence condition last year to require companies to demonstrate dividends are linked to performance for customers and the environment. Ofwat now intends to issue updated guidance to provide greater clarity on how it assesses companies' dividend decisions and compliance with their licence. This will include a clear reminder that companies carefully consider serious criminal breaches of the law when taking account of their performance and potential dividend payments.

Where this guidance is not followed, Ofwat will not hesitate to undertake enforcement action.

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