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Lib Dems propose 16% sewage tax on water company profits to raise £340million for rivers, lakes and ultimately for the planet

by Jackie Porter on 8 November, 2021

The Leader of the Liberal Democrats has called for a “Sewage Tax” on water companies to prevent raw sewage polluting rivers and lakes. 
Today MPs will vote again on the Environment Bill which includes new rules on sewage being dumped into rivers.
Water companies pumped polluting and harmful raw sewage in national water sources over 400,000 times last year. The River Trust reveals more than half of England’s rivers are currently failing to pass cleanliness tests due to water companies actions. However, the government is proposing taxpayers foot the bill for sewage system improvements, instead of water companies.

The “Sewage Tax” would tax the profits of water companies, which last year made pre-tax profits of £2.2 billion despite polluting Britain’s rivers with dangerous levels of sewage. 
The proposal would be a 16% tax on pre-tax profits, providing a £340 million fund to fix the sewage system – this would be in addition to the current 19% rate of corporation tax. 
For example, Southern Water, which makes the most profit of England’s water companies, would have paid £70 million in 2020.
Thames Water, the company which made £434 million pre-tax profit in 2020, would also pay £70 million in Sewage Tax after pumping raw sewage into the River Wey near Guildford for an estimated 1789 hours last year.

Leader of the Liberal Democrats, Ed Davey MP, has called for the new Sewage Tax to save local rivers and lakes:“Pumping raw sewage into our treasured rivers and lakes leaves a bad taste in the mouth, particularly when these companies are raking in millions of pounds in profits. The whole thing stinks. “Water companies need to clean up after their mess.
Why should taxpayers be left to foot the bill for water companies who have shown utter disregard for our local environments?  “The Tories plan to introduce a new ‘duty’ on these companies will do nothing to stop them dumping sewage for years to come. We can’t wait any longer. More dither and delay could cause irreversible damage to wildlife and precious natural habits.

(Water companies would also be prevented from passing this increase in tax onto consumers through regulation by the regulator Ofwat. )

Facts check: ​ Water Company‘s Profits before tax (£m)

Anglian Water
43.6

Northumbrian Water
246.4

Severn Trent Water
374.6
Southern Water
433.9

South West Water
108.1

Thames Water
433.8

United Utilities
336.2

Wessex Water
109.7

Yorkshire Water
34.0

Total
2,120.3



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