Cap on Environment Agency pollution fines to rise to £250m as Defra pushes for faster infrastructure

Environment secretary, Ranil Jayawardena, will consult on proposals to raise the civil penalty for water companies who pollute the environment by 1,000-fold – from £250,000 to up to £250m. This was framed as part of a push to get companies to accelerate infrastructure delivery to minimise pollution incidents and secure water supplies.

The move would bolster fast-track enforcement directly via the Environment Agency (EA), given court cases can be very slow and expensive. The EA currently has the power to pursue both criminal cases through the courts, and civil prosecutions through directly imposed Variable Monetary Penalties (VMPs), against water companies who break the law or cause environmental harm. Fines from courts are unlimited, but currently VMPs for individual breaches are set at a £250,000 maximum. Increasing the cap to £250m will strengthen the EA’s hand to take the VMP route.

Defra reported all water companies had responded to the environment secretary’s day-one demand for a plan by 21 September, setting out their intentions for improving environmental performance and infrastructure. These are currently being scrutinised.

Jayawardena commented: “Bigger financial penalties will act as a greater deterrent and push water companies to do more, and faster, when it comes to investing in infrastructure and improving the quality of our water. This 1,000-fold increase sends a clear signal that we want clean rivers and coastlines, and that the duty falls to the water companies to deliver – the polluter must pay.”

The increase in the civil cap was announced in Jayawardena’s Conservative Party conference speech last week, in which he criticised the water industry’s leakage and pollution performance. Asserting “I believe in private enterprise” he added: “And yet we all know that government must step in if there is market failure. Our water companies have a lot to answer for.”

Elsewhere in the speech, the environment secretary emphasised the role of the food and drink sector in his party’s growth plans, trumpeting in particular the potential of international trade. “At Defra,” he said, "we’re all about EFG. The Environment. Food. And Growth…Instead of being a regulatory department, we are now an economic growth department.”

He insisted: “Though our opponents would like to pretend otherwise, a strong, healthy environment and a strong, healthy economy are not incompatible. In fact, they are perfect partners. A strong environment and a strong economy is how we deliver in a Conservative way.”

Jayawardena said Defra remained committed to “our environmental schemes that support our farmers as they look after our countryside,” though farming regulations will be reviewed. Moreover: “We will use our new grant schemes to support farmers and food producers to invest in the technology that will boost their productivity and profitability. The technological advancements being made in the agricultural and horticultural sectors are astounding, producing more food whilst using fewer resources, including water.”

Biodiversity also got a brief mention.`