Nils Pratley argues that the UK government should not be surprised that water companies are finding ways around the ban on bonuses for polluting bosses, since it was entirely predictable. The Water (Special Measures) Act 2025 let Ofwat block performance-related bonuses at the worst-offending firms but left salaries, allowances and retention payments untouched, so companies simply increased those instead, echoing how banks used "role-based allowances" to dodge EU bonus caps after 2008.

Overall reported pay for water company chief executives and finance chiefs rose 1.5% to £25.3m this year, the second consecutive rise since the bonus ban began. Thames Water drew particular criticism after its finance chief, Steve Buck, received a delayed £1m signing fee having already been paid £591,000 in salary, while the firm also settled "paused" retention payments to other executives via 14 separate agreements. The government called Thames Water's payout "unacceptable", and Ofwat's interim executive director Helen Campbell warned that such manoeuvres, when unexplained, damage customer trust — but Pratley says ministers left the loophole open themselves.