Water firm profits almost doubled since 2019, Lib Dems claim

Liberal Democrat leader Sir Ed Davey called the ‘eye-watering profits’ a ‘national scandal’ (James Manning/PA)

Water company profits have almost doubled since 2019, with firms in England and Wales raking in £4.2 billion over the course of the current Parliament, the Liberal Democrats have claimed.

In 2022/2023, England’s water firms made £1.7 billion, up 82% since 2018/2019, according to party analysis of Companies House records.

Yorkshire Water took away the biggest profit last year at £723 million – the highest since 2018/2019, the Lib Dems said.

But the company said the figure was “not an accurate reflection” of its performance and it had in fact made a loss in 2022/2023.

The party is expected to detail its plans for a sewage tax and a new wave of “local environmental reporters” as part of its plans to “clean up the country’s waterways” at its spring conference this week.

It will call for an additional 16% levy on top of corporate tax for water firms, which it says could be used to fund journalists operating in a similar way to the BBC’s local democracy reporter network.

The Lib Dems have put tackling sewage at the heart of their efforts to flip traditionally Tory seats in so-called “blue-wall” areas across southern England ahead of a general election expected next year.

They have also called for swimmers who have suffered illness as a result of bathing in contaminated bathing spots to be given compensation, and an outright ban on bonuses for water company executives.

Ahead of spring conference, party leader Sir Ed Davey said: “These eye-watering profits are a national scandal. Whilst our rivers, lakes and coastlines get destroyed by raw sewage, these polluting firms are laughing all the way to the bank. Frankly, the whole thing stinks.

“This is concrete proof that under the Conservatives, water firms have prospered and got away with environmental vandalism.”

A spokesperson for Yorkshire Water said: “Profit before tax is not an accurate reflection of our business performance in 2022/23 as it included unrealised fair value movements relating to our financing. Adjusting for these movements, Yorkshire Water made a loss.

“We invested over £530 million in infrastructure projects in 2022/23 to improve our clean and wastewater networks while delivering the best value for customers.

“In addition to this, we have not paid any dividends to external stakeholders for seven years and are not intending to do so in the near future.”