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Helena Horton

Helena Horton has an update on Thames Water

Thames Water has blocked controversial plans to pay executives “retention payments” out of a £3bn loan, the environment secretary told the Efra committee.

Steve Reed said: “Just over the last few days we have seen a very unfortunate situation where Thames Water appeared to be attempting to circumvent that ban, calling their bonuses something different so they can continue to pay them. I am very happy indeed that Thames have now dropped those proposals. It was the wrong thing to do. They have now withdrawn their proposal to make those payments.”

The company won a court battle that allowed it to accept the loan, which comes with an expensive 9.75% interest rate and fees. The chair of Thames Water has written to the committee to clarify his comments after the Guardian revealed he wrongly told it last week that the bonuses were “insisted upon” by the creditors.

Sir Adrian Montague told the environment, food and rural affairs (Efra) select committee last week that the lenders had insisted that “very substantial” bonuses of up to 50% of salary should be paid to company executives from the controversial loan in order to retain key staff.

The chair of Thames Water has now written to the committee to say he “misspoke” after the Guardian revealed his comments were not true.

After the Guardian approached Thames to ask why its chair claimed the lenders “insisted” bonuses were paid, Montague wrote to the Efra committee to clarify his comments.

“Following the session we have been approached by the Guardian who we understand intend to write a story suggesting that we misled the committee in relation to the Company’s management retention plan.

“I appreciate that in the heat of the moment I may have misspoken when I stated that the creditors insisted on the management retention plan.”

Helena Dollimore, Labour MP and member of the committee, said of Montague’s appearance: “He was trying to justify the paying of these retention payment … that the creditors of Thames Water had said it was a condition of the loan for top leaders to get retention payments. Since that evidence to our committee we’ve seen documents filed in the high court that suggest Sir Adrian misled in his wording … This is very serious behaviour from the bosses of Thames Water at our committee.”

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