The government announced that under the new rules, many water companies have been banned from paying "unfair" bonuses to senior executives.

These measures apply to water companies that do not meet environmental and consumer standards, which are financially inflexible or criminal.

Over the years, the concern about sewage overflow and rising bills has increased, and over the past decade, the water company has paid executives a £112 million reward.

Under the Enhanced Water Act, six companies are prohibited from paying bonuses this year, including England, South, Thames, United Utilities, Wessex and Yorkshire Water.

The ban is traced back to April 2024, meaning Ofwat's regulators can force companies to deduct paid bonuses or face enforcement actions. It works with shared rewards and cash.

This is part of the new measures in the Water Act that came into effect on Friday.

Environment Secretary Steve Reed said water company owners “can only get bonuses if they perform well, and of course they can get bonuses if they fail to cope with water pollution.”

Officials said the government will investigate companies that are trying to address the ban by raising the basic salary of executives.

But Tim Farron, a Liberal Democratic environment spokesman, called the government a “semi-friction.”

He added, “This won’t touch on the aspects of developing basic reforms – especially if the water company can still address the bonus and struggle hard”.

The government said that in the last year alone, the water boss in England was paid a bonus of £7.6 million.

Water UK, which represents companies in the industry, said the independent committees of companies that decide on performance-related compensation will comply with laws set by the government.

It added: “Water companies are focused on investing a record £100.4 billion over the next five years to ensure our water supply, end sewage into our rivers and oceans and support economic growth.”

This week, a comment found that the aquatic industry in England and Wales was failing.

In its interim findings, the Independent Water Commission, led by former Bank of England Deputy Governor Sir Jon Cunliffe, said in its interim findings that public trust has been shaken by “polluted, financially difficult, poorly managed (and) infrastructure failure”.

Clients have seen Bills Rocket when water companies try to raise funds to invest in crashing infrastructure.

The commission said the UK's water system has suffered "deeply rooted, whole-body and interlocking failures" over the years.

These include “the future of government strategy and future plans.”

Last month, Thames was fined £122.7 million for sewage overflow and shareholder spending, the biggest fine ever for Ofwat.

The high-profile company serves about a quarter of the UK’s population, mainly in parts of London and southern England, and employs 8,000 people.

The Thames suffered a major blow earlier this week to secure its future as U.S. private equity giant KKR pulled out of the company's £4 billion rescue deal.

In April, activists discovered that England's number of pollution incidents reached 10 years.