Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, whether she has made an assessment of the appropriateness of dividend payments by regulated water companies in financial years in which those companies incur penalties for environmental or operational underperformance; and whether she plans to make changes to the regulatory framework in this area.

Ofwat requires water companies to justify dividends in light of performance for customers and the environment, and demonstrate financial resilience and investment needs. Ofwat can take enforcement action where requirements are breached and prevent dividend payments that would risk financial resilience. The Government has strengthened regulation through the Water (Special Measures) Act.