MPs vote on blocking water firms receiving tax cuts unless they stop sewage discharges 

EMBARGO: 00:01  Wednesday 10th January 

• 10 water firms paid no tax last year after government’s previous round of tax cuts on industry

• Water firms who paid £1.4bn in dividends to overseas owners are now set to receive permanent tax cuts from government 

• Liberal Democrat amendment vows to block “water industry gravy train, where money and sewage flows freely”

Today (Wednesday 10th January), MPs expect to vote on a Liberal Democrat amendment to block disgraced water firms receiving a tax cut.

The government’s Finance Bill allows water firms to fully expense the costs of investment in equipment, handing them a large corporate tax cut.

The Liberal Democrats’ amendment tabled by Treasury spokesperson Sarah Olney MP, would block these tax cuts for the water industry, unless the equipment was specifically for ending sewage dumps in rivers, lakes and coastlines. The amendment also specifies the tax cuts cannot be given to water firms unless they produce a full time-limited plan for dealing with the sewage scandal. 

The government’s temporary version of this tax cut, which began in 2021, handed Northumbrian Water a staggering £21.9 million tax rebate. At the same time, Northumbrian Water increased their payout to overseas owners in Hong-Kong and New York, with a £105 million dividend. Meanwhile, their CEO earned £648,000 in salary and bonuses, whilst the firm pumped sewage into waterways for a staggering 107,536 hours in 2022.

House of Commons Library research commissioned by the Liberal Democrats found the water industry benefited from almost £100 million in tax rebates last year. The analysis of Companies House records and financial reporting has also revealed 10 water firms paid no tax at all in 2022/2023 - a stark increase since 2021/2022, when just one firm paid no tax. 

Liberal Democrat Treasury spokesperson Sarah Olney MP said:

“The Conservative government is about to hand water firms a stinking big tax cut. What a farce. 

“The same disgraced industry which causes environmental destruction is now set to receive a great fat cheque from the Treasury. This is a national scandal.

“My amendment is simple - no tax cuts unless you stop sewage. We need to put an end to the water industry gravy train, where money and sewage flows freely.

“Water firms are polluting our rivers, lakes and coastlines, all whilst stuffing their pockets with eye-watering bonuses and salaries. Conservative MPs have the chance to block water firms receiving multi-million pounds worth of tax cuts. How can they justify hiking taxes on working people whilst slashing them for sewage pumping companies? They clearly have no shame.”

ENDS

NOTES TO EDITORS

Lib Dem Amendment (Sewage)

Sarah Olney                                                                                                           1

Clause 1, page 2, line 3, at end insert— 

“(3) The provisions of subsection (1) shall only be applied to water companies after they have published a costed, time-limited plan, demonstrating the way in which these capital allowances will be used to prevent sewage discharges.” 

Member's explanatory statement 

This amendment would require water companies to demonstrate how they will use capital allowances to prevent sewage discharges in order to benefit from full expensing.

Government’s tax expense policy

The House of Commons Library provided figures using Fame, a business information database, based on each company’s filings with Companies House. The figures marked with an asterisk are taken from published annual reports instead and should be treated as provisional.