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Photo essay: https://bit.ly/3DrbJob

By Kate Holton and Dylan Martinez

LYME BAY, England, March 14 (Reuters) - Beneath the

gloomy seas off southern England, 400 million mussels encrust

ropes hanging from buoys dotted over an area the size of the

country's biggest airport.

Almost 5 km (3 miles) from shore at its nearest point,

Europe's largest offshore mussel farm was built by the Holmyard

family in Lyme Bay, where they believed it would be free of the

millions of gallons of sewage pumped into UK waters each year.

But even this far offshore, harmful bacteria such as E.coli

can pollute the water, blocking exports to continental Europe

for weeks and damaging the prospects of a business producing

sustainable food.

"It's criminal that they're allowed to dump what they dump

in the seas and get away with it," sales manager Sarah Holmyard

said during a visit to the farm. "It's affecting all sorts of

businesses, including us."

While Britain's shellfish industry is small, the problems

faced by the Holmyards underscore how failings with the most

basic services in British society such as water and sewage can

harm the broader economy.

Reuters interviews with 20 people and data analysis show how

polluted water has also hit tourism and delayed construction

projects, acting as a drag on the economy at a time when the new

Labour government is trying to kick start growth.

In the five years to October 2024, the Environment Agency

intervened on 60 occasions to object to planning applications

due to the pressures they would place on local sewerage systems,

according to a Freedom of Information request.

Clean water campaigners have started to marshal opposition

against planning applications, believing that's more likely to

pressure the government into fixing the sewage system than

current efforts focusing on the harm caused to biodiversity.

"Money talks," said Ash Smith at campaign group Windrush

Against Sewage Pollution. Standing knee deep in grey, untreated

sewage water in a local brook in Oxfordshire, he explained how

they were objecting to house building to show how the water

system had broken the country's infrastructure more broadly.

The pumping of sewage into rivers and seas has become a

major scandal in Britain. Privatised water companies have been

accused of prioritising dividends over investment and dumping

sewage in waterways when its ailing infrastructure cannot cope.

The pollution has deterred wild water swimmers, angered

surfers, prompted warnings about toxic blue-green algal blooms

in lakes and created an army of people who have become experts

on water quality after they noticed changes in waterways.

In England, water companies discharged sewage for 3.6

million hours in 2023, polluting streams, rivers and coastlines,

littering them with sanitary products and condoms, damaging

ecosystems and habitats, and scaring away tourists.

SEWAGE SPILLS

British sewers mostly combine rainwater with wastewater.

During exceptional rainfalls, water companies can make "spills"

into waterways to prevent sewers from becoming overwhelmed. But

many have been fined for releasing sewage too regularly.

South West Water, which provides water and sewerage services

in the county of Devon by the Holmyard's farm, discharged sewage

for 530,737 hours in 2023 - an 83% jump on 2022 making it one of

the worst performers in England, Environment Agency data show.

South West Water said it was looking for ways to improve

water quality at Lyme Bay.

"We are making sure that every designated shellfish water in

the region will meet the government's target of less than 10

spills per year - 10 years ahead of deadline - as we plan to

nearly double investment to 2.5 billion pounds from 2025-30."

When John Holmyard and his wife Nicki started to plan their

mussel farm, they had a lot to factor in.

Having farmed mussels in colder waters off Scotland for

years, they decided to find a site with warmer water, the right

sea depth and abundance of nutrients they believed would help

mussels grow faster. It had to be far enough offshore to avoid

runoff, but with some protection to limit the swell of the sea.

They settled on Lyme Bay after visiting similar sites around

Britain, Europe, China and New Zealand and spent seven years

securing planning and regulatory approval - without knowing

whether their hunch would pay off.

Eleven years on, the farm produces about 3,000 tonnes of

mussels a year and the Holmyards hope to hit 10,000 to 12,000

tonnes once it is completed.

John Holmyard, who runs the business with Nicki, their

daughter Sarah and son George, said they never expected sewage

to affect their farm: "But it's not worked out like that."

For shellfish producers, dumped sewage has been toxic.

Before Britain left the European Union, mussels and oysters

could be shipped to the continent prior to purification. Post

Brexit, the EU only accepts purified goods or those from the

cleanest British waters, rated Class A.

That change has all but destroyed mussel farming in north

Wales on Britain's west coast. The region once produced the bulk

of Britain's exports to Europe but now rarely sells to the

continent due to poor water and a lack of bulk purification

facilities in the country.

The Shellfish Association of Great Britain (SAGB) says

British exports would double if the seas were cleaner.

James Green, who harvests and sells oysters in Whitstable, a

town in southeast England famed for shellfish since Roman times,

used to send about half of his produce to markets such as Hong

Kong and Europe, but Brexit and water quality issues mean he now

only sells purified oysters domestically.

His water supplier, Southern Water, was fined 90 million

pounds in 2021 for dumping sewage in the five years to 2015,

disrupting harvests and exports. He did not get any compensation

and says it is hard to wait for improvements.

"I've got a business," he said. "Can you wait for the

changes to kick in, in five, six, seven years' time?"

To protect his oysters, Green monitors for E.coli,

salmonella and Norovirus, and tracks rainfall and sewer

overflows to assess risks before harvesting.

Southern Water said it was investing heavily to ensure the

continued high quality of shellfish beds around its coast.

"The 2021 court case regarding events between 2010 and 2015

found no evidence of impact on shellfish beds, which are

affected by many factors," it said.

DRIVEN TO DESPAIR

The Holmyards say their mussels are tested for E.coli in the

Netherlands on an almost daily basis - and they have always been

within the limits for a Class A designation.

But high numbers of E.coli have occasionally been reported

by British authorities in similar monthly tests, designating

parts of the farm Class B.

In the British system, negative readings can have different

outcomes for future harvests. For the Holmyards, it stopped them

from exporting mussels for several weeks from that part of the

farm - and also designated the same area as Class B the same

time the following year.

The family say they find it baffling, as bacteria coming

from the shore should be heavily diluted by the time they reach

the farm - and because the British readings don't tally with the

more frequent Dutch tests.

John said they had been unable to raise fresh capital since

Brexit due to the risk of export bans.

The British body responsible for classifying shellfish

harvesting areas, the Food Standards Agency, said it had tried

to be flexible, but it had to protect public health and

classifications would only improve with better water.

As Sarah and George plucked predatory starfish off the

mussels, they explained how an annual survey showed the farm had

spawned an abundance of species, such as crab and lobster.

Their blue mussels, known for their rich, sweet flavour, are

sold as a premium product in Europe. Notwithstanding the bans,

the Holmyards still export about 95% of their mussels to the EU,

with the rest sold in Britain.

Tourism bosses say this is the kind of high-quality, locally

produced food they need to promote to prospective

holidaymakers.

Alistair Handyside, chairman of the South West Tourism

Alliance, said while tourism was mainly affected by weather and

cost, talk of sewage had damaged the appeal of many locations.

"It drives you to despair," he said.

TOXIC OUTPUT

The sight of sewage and litter on beaches and in rivers has

also driven thousands of people to protest.

Sally Burtt-Jones was one of the founders of SOS Whitstable,

part of a network of groups that stage protests, test local

water and campaign for legislative change.

She said she was most proud of her campaigning work. "We

care about the community and the sea," she said. "When we get

together we can make change happen."

John Reeve, a Surfers Against Sewage representative in

the northeastern seaside town of Saltburn, has worked with local

officials and studied the geology to understand how to control

rainwater as storms become heavier due to climate change.

"We are making a difference over time," he said.

The water industry says it has invested heavily in

infrastructure since privatisation in 1989, but population

growth and climate change have imposed new pressures at a time

when it says successive governments - and regulator Ofwat - were

focused on keeping customer's bills low.

Ofwat said water companies in England and Wales had paid out

53 billion pounds ($66 billion) in dividends since privatisation

- and had collective net debt of 69.5 billion in 2024.

It has proposed letting customer bills rise by an average of

36% before inflation over the next five years to fund

infrastructure upgrades and has gained new powers to link

dividends to performance. The government is also reviewing the

sector.

An Ofwat spokesperson said customers wanted change: "We need

to see a transformation in companies' culture and performance.

We will monitor and hold companies to account."

Failures around sewage have also bedevilled construction,

with the Environment Agency objecting to planning applications

when it thinks existing systems will not cope.

The objections, for everything from housing to retail sites,

offices, schools, a science business park and leisure centre,

are typically overcome with ways to mitigate the impact.

But the objections add time, cost and complexity to building

projects, a serious challenge for the government as it seeks to

trigger a boom in housing and infrastructure construction.

Water pollution has also damaged biodiversity.

Stocks of Atlantic salmon, which hatch in freshwater

breeding grounds in Britain, have hit new lows. The provisional

declared rod catch in 2023 was the worst since records began in

1988.

The Environment Agency attributed the fall to pollution and

sedimentation - just the type of environment the Holmyards had

sought to avoid.

Sarah said the potential for the business being replicated

elsewhere was huge. "But if you've got the same issues of not

being able to export because of the water quality, then it's

just not going to work."

($1 = 0.8046 pounds)