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

As the UK experienced record temperatures this summer, our water supplies are once again shamefully inadequate.

A lack of new investment in reservoirs and the failure to develop a water network that could divert resources from the abundance of rain in the North to the sun-scorched South has plunged a usually wet and windy island into another drought crisis.

Over the years, our privatized water industry has consistently failed to provide reliable supplies and keep the nation’s waterways and oceans clean.

Despite this terrible record, bosses shamelessly reward themselves with fat cat bonuses and payouts.

Thames Water, the largest of all companies – with 16 million customers in London and across the Thames Valley – this week announced it was paying more than £4 million in bonuses to its senior executives and increasing chief executive Chris Weston’s pay to £1.16 million. An increase of 9.4 percent, which reduced inflation.

This wouldn’t be fair if Thames Water had done its job properly. But it is not like that.

The firm has debts of a staggering £18.5bn, is on the verge of bankruptcy and was fined a record £122.7m last year for dumping raw sewage into the River Thames and mismanaging its finances.

The company’s incompetence; its disregard for the environment and waterways where it pumps toxic pollutants; Sheer disdain for consumers; It’s all awful and incomprehensible; And that’s even before he mentions the 40 percent increase he imposed on water bills.

The water company is owed a staggering £18.5bn and was fined a record £122.7m last year for dumping raw sewage into the River Thames and mismanaging its finances.

Thames Water has revealed in its latest accounts that the company is finally making an operating profit thanks to a huge rise in bills. But that’s no excuse to spend more earnings on executives; Every penny of profits needs to be used to start paying back the £18.5bn mountain of debt.

But what is just as disturbing is the sheer stupidity of the greedy water bosses. The announcements about these pay packages and bonuses (Thames paid £2.2 million to a ‘restructuring chief’) come just as Andy Burnham moves to No 10.

He noted that water companies are tied to some form of state or community ownership.

The fat cats’ hunger for ever-larger payouts plays directly into the unvarnished socialism that guides Burnham and Labour’s army of Leftist backbenchers who believe in nationalization where the state knows best and wealth taxes on corporate bad guys.

Environment Minister Emma Reynolds, no doubt aiming to keep her job, took aim at Thames Water payouts, saying it was ‘outrageous that one of the worst-performing water companies is handing out bonuses and inflation-busting pay rises to its executives’.

‘This is contrary to basic justice,’ he added, ‘and the British people are right to be angry. ‘We have banned bonuses given to patrons who pollute the water and will take action to prevent bonuses given by any other name.’

And he’s right. This is so ugly. But as anyone with even a passing knowledge of the state of Britain’s public finances will tell you, the idea that Burnham’s much-vaunted nationalization plans are the solution suits the birds.

The cost of transferring water to public ownership is estimated at £100 billion, including debts on the books. For a country struggling to meet its defense commitments, this is a cost no UK government can afford without causing a meltdown in the bond markets from which the country borrows.

Moreover, this would mean debiting £20bn onto the Government balance sheet from Thames Water alone. But state ownership is not the only threat. Corporate bosses enriching themselves at the expense of consumers will also fuel Labour’s desire to impose a new layer of wealth tax on Britain’s corporate leaders and entrepreneurs, regardless of whether they are in the water industry.

Chancellor Rachel Reeves’s attacks on the wealthy have so far led an estimated 16,500 Britons to flee to lower-taxed destinations. But these aren’t just the super-rich and top investment bankers.

A friend of mine who runs a wildly successful tech start-up that pays high salaries tells me that many of his top engineers and coders have fled to Dubai, Milan and other places where they now work remotely to avoid Reeves’ devastating taxes.

But water bosses act as if they don’t care. Many of the worst practices can be found among companies such as Thames Water, which have fallen into the hands of financially driven offshore private equity and wealth funds.

But water companies that remain publicly traded are also playing fast and loose with rules designed to prevent bonuses from being paid to companies that pollute the environment.

United Utilities, which provides water and wastewater services from its Warrington base in Burnham’s north-west backyard, is among the known culprits.

Environment Minister Emma Reynolds took aim at Thames Water’s payments, saying it was ‘outrageous’ that one of the worst-performing water companies was handing out bonuses.

The Mail on Sunday recently reported that the company had cunningly devised a pay plan that gave boss Louise Beardmore an annual allocation of £435,000 in shares. The allowance was created to offset a bonus ban imposed by industry regulator Ofwat over raw sewage leaks.

This means Beardmore’s total salary has reached an eye-watering £2.5 million, at a time when the company is failing to meet its pollution targets. But Beardmore is far from alone.

This summer, residents in Tunbridge Wells and the south-east have been devastated by blackouts and discolored tap water. But chief executive David Hinton, who resigned in May, received a check for £457,534, including a £115,000 bonus.

Susan Davy, the former boss of publicly listed Pennon Group, which owns South West Water, received a £1.1 million fee last year, including a £270,000 bonus, despite thousands of Devon residents being dangerously contaminated by a parasite known as cryptosporidium in 2024.

At Severn Trent, former chief executive Liv Garfield regularly received a £3 million pay packet despite frequent fines for dumping raw sewage into rivers and a faulty system of billing customers.

Collectively, the performance of water companies is a national disgrace. A commission chaired by Sir Jon Cunliffe, the former deputy governor of the Bank of England, recommended radical reforms in August last year, including replacing weak regulator Ofwat with a new, heavily strengthened body.

The report argued that a sharper-toothed overlord, new ownership models, updated infrastructure and, above all, the restoration of trust had seeped into Britain’s sewers.

This is what Burnham and the new Labor government should plan for; full and rapid implementation of the Cunliffe report rather than any state or community ownership.

It has a real chance of making a difference because, as is often the case, ministers and the Treasury are left in a quandary rather than taking urgent action as fat cat bosses dance around the rules, drains are drained and hose bans proliferate.

But whether he can grasp this, given his obsession with socialism and nationalization, is another matter.