Water companies threatened to hike customers' bills if the government made them clean up the sewage they dumped in rivers, openDemocracy can reveal.

One firm, which recorded profits north of £100m last year, called proposed government targets "demanding" and argued they would result in more customers struggling to afford bills.

Sewage is the main source of phosphorus water pollution in England. This drives the growth of toxic algae, which in turn kills plants and fish in rivers and lakes.

More than half of English rivers fail to meet phosphorus standards, according to the Environment Agency, and most sewage treatment works cannot currently remove the chemical.

During a consultation last year, several firms privately told the government that its new target to remove 80% of phosphorus from sewage by 2037 would come with a hefty cost, which they would pass on to bill payers.

The news follows a report by the House of Lords industry and regulators committee last month, which found “water companies have been overly focused on maximising financial returns at the expense of the environment”.

A ‘smokescreen for profit and greed’

In documents obtained by openDemocracy under Freedom of Information laws (FOI), South West Water told the Department for Environment, Food and Rural Affairs (Defra) that “demanding targets” would lead to “disproportionate costs” for customers.

The company said the “level of investment required” would lead to “upward pressure on customer bills” and “a significant increase in the number of households in water poverty and struggling to pay their bills.” South West Water, which made £138m in profit before tax last year, declined to comment when approached by openDemocracy.

Thames Water responded to the consultation claiming it would cost £815m to upgrade its sewage treatment works and a further £30m a year in ongoing costs, which was “likely to materially increase customer bills”. The company made almost £400m in pre-tax profits in the first half of the last financial year.

Anglian Water, which paid £92m in dividends to its shareholders last year, said the government’s approach risked “driving up additional costs for customers”.

Punk-rock singer and water campaigner Feargal Sharkey told openDemocracy the companies’ threats to increase prices “appear to be an attempt to extract even more cash from the pockets of bill payers”.

Sharkey added that the industry was “continuing its attack on working families”, branding the price rises “uncalled for, unwarranted and unjustified” and the lobbying a “smokescreen for profit and greed”.

‘Bill payers are very rightly disgusted’

England has 3,500 sewage treatment works, which are the entry point for 60-80% of the phosphorus in English rivers. But Defra told openDemocracy that only 24% of them have phosphorus removal systems.

That figure is set to rise to 37% by 2027 but the quality of these systems varies and only 160 – less than 5% of the total – will meet Defra’s highest technical standard.

Conservative MP Philip Dunne, chair of the Environmental Audit Committee’s ongoing inquiry into water quality, told openDemocracy: “Bill payers are very rightly disgusted at the routine discharge of sewage we are seeing and expect improvements across the board.

He said water companies needed to “strike the right balance between keeping bills affordable and raising the funds required for improving infrastructure”.

“[Reducing phosphorus] will not be an overnight fix and is likely to require substantial investment by water companies,” Dunne added. "But consistent monitoring and credible plans to reduce phosphorus levels are absolutely key to return our waterways to good ecological health.”

Ash Smith, founder of the charity Windrush Against Sewage Pollution, said a “classic water industry response” was to “present huge costs as a deterrent”. He told openDemocracy: “Look at where that has led us with untreated sewage overflows.”

Smith pointed out that water companies contribute to the phosphorus pollution by adding phosphate to drinking water to prevent the corrosion of metal pipes.

Last month’s Lords’ industry and regulators committee report found regulator Ofwat had “failed to ensure companies invest sufficiently in water infrastructure”.

The committee said Ofwat and the Environment Agency “must go further to hold water companies to account for environmental pollution through penalties and prosecution” and called on the government to finance this work properly.

‘Obfuscation’

Water samples taken by volunteers downstream of Anglian Water sewage works on the River Cam last summer contained phosphorus levels more than 50 times higher than the level recommended by Natural England, the government’s adviser on the natural environment.

Richard Pavitt, a district councillor in Essex who took the samples, said Anglian Water had 26 sewage works on the Cam upstream of Cambridge but only seven had systems to strip phosphate from sewage.

Anglian Water told openDemocracy it planned to fit new removal systems at two sewage works on the Cam by the end of next year. But it would not confirm how many of its works do not have these systems in place.

A spokesperson said: “Every catchment and river will have different amounts of phosphorus present and it might not be necessary to reduce this by 80% to achieve the outcome for the environment.”

Pavitt told openDemocracy the water companies’ responses to the consultation showed they were trying to evade responsibility for the pollution. He said: “It’s obfuscation. At the end of the day, the point at which [phosphorus] goes back in the rivers is sewage treatment works and that is where it has to be limited”.

In December, the government gave companies an additional year – until 2038 – to comply with the new target. Water companies have not yet publicly stated how they will achieve this and what it will cost.

A Defra spokesperson said: “We have full confidence in our ambitious Environment Act targets, including our commitment to cut phosphorus loadings from sewage treatments by 80%.

“Through the Environment Act we have ensured a robust legal framework to hold current and future governments to account on these targets, protecting our waterways for generations to come”.

A spokesperson for Thames Water said the company had reduced its phosphorus discharges to 3.5 tonnes per day in 2020 and that it planned to reduce its discharges by a further 0.8 tonnes by 2025.

The spokesperson said: “Taking action to improve the health of rivers is a key focus for us and we made clear in our response to the government’s consultation that we support the reduction of phosphorus in waterways.”