Water tests taking place in Henley-on-Thames (Image: Getty)

       Six water companies have had “unfair” bonuses immediately banned for their top executives following poor performance, Steve Reed has announced. Regulator Ofwat and the Government will issue fines or claw back money that results from any hikes in salaries to dodge the bonus ban, it is understood.

       The bosses at Thames Water, Yorkshire Water, Anglian Water, Wessex Water, United Utilities, and Southern Water, where bosses are not allowed to receive bonuses with immediate effect. It has been backdated to apply to any performance-related awards for the financial year from April last year.

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       Water bosses gave themselves over ￡112million in bonuses and incentive payments in the last decade.

       James Wallace, CEO of River Action, said: “Banning bonuses is a welcome step from the Government. But we won’t end pollution for profit until water companies are refinanced and governed for public benefit. Any attempt to inflate base pay as a workaround must be stamped out. The era of rewarding criminal leadership must end. No more cream for the fat cats.”

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       Debt-laden Thames Water, which supplies 16 million customers, had seven of the most serious category 1 incidents throughout last year in areas including the Chiltern District, Slough, Enfield in London and Sevenoaks in Kent.

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       South West Water has not been penalised despite a water bug making hundreds of people ill in Devon last year because the incident is still under investigation by the Drinking Water Inspectorate.

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       Each company will have a fresh slate at the start of each financial year, it is understood.

       But if they fail on performance, the environment or customer outcomes then they risk losing the right to award bonuses to some of their top executives.

       Ministers are not applying the bonuses to all senior staff because it still wants to ensure high-skilled workers are attracted to the sector, it is understood.

       The Department for Environment, Food and Rural Affairs (DEFRA) said it will consider proposals from Sir Jon Cunliffe’s Independent Water Commission’s interim report, published this week, and outline more reforms for the sector in future.

       Cat Hobbs, founder and director of We Own It, said: “With this latest announcement the government is just fiddling while Rome burns, or more accurately fiddling while England drowns in raw sewage. This is a token gesture and water bosses have already indicated they’ll just increase salaries instead."

       Helen Campbell, senior director for sector performance at Ofwat, insited eater company bosses have a "clear duty to safeguard our precious natural environment".

       She added: “That’s why we welcome these new powers from government – they strengthen our ability to hold water companies accountable to their customers by stopping their most senior directors from taking bonuses when there have been serious environmental or other failings.

       “Company bonuses continue to cause real concerns and understandably damage trust, so this new power significantly increases the pressure on water company executives to become better custodians of our rivers and seas.

       “We will use this new rule to drive lasting change in the culture and behaviour of leadership in water companies. This is essential to delivering our vision of a secure and sustainable water sector that acts in the best interests of customers, communities, and the environment."

       It comes as water firms brace following the driest spring since the reign of Queen Victoria, the Environment Agency (EA) said.

       Fish rescues have been carried out on the Rivers Redlake and Tern in Shropshire. and Reservoir levels are now at 77%. Navigation issues have been noted in canals because of low water levels.

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       Helen Wakeham, EA’s director of water and National Drought Group chair, said: “It’s been the driest spring since 1893, and we need to be prepared for more summer droughts as our climate changes.

       “The recent rainfall is having a positive effect, but it hasn’t been enough to stop a drought in the north-west and we must ensure we have enough water to last the entire summer.

       “We are working with water companies, farmers and other abstractors to help them plan their water usage over the summer and urge people to be mindful about their daily use.”