Water Companies: Private Ownership

Lord Sikka Excerpts

Wednesday 29th October 2025 Lords Chamber

Asked by

[Lord Sikka]

To ask His Majesty’s Government what assessment they have made of the social cost of leaving England’s water companies in private ownership.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, the Government are committed to protecting the most vulnerable households, and we expect water companies to put robust measures in place for households that are struggling to pay their bills. We are bringing forward secondary legislation to introduce new and increased compensation—double the previous amounts, or more—that it will be compulsory for water companies to pay customers for poor service.

[Lord Sikka (Lab)]

As the Minister is struggling to provide information about the social cost of leaving water in private hands, I shall help him a little bit. Analysis suggests that, between 2025 and 2050, customers of privatised water companies will pay over £1 trillion, expressed in 2025 prices. It will probably be higher as companies raise capital from customers while shareholders take returns. People will not own a blade of grass in return. If the Minister disagrees with this alternative analysis, I ask him to please commit to publishing the Government’s data.

[Lord Katz (Lab)]

The Government have indeed published our analysis of the cost of renationalising the water sector, which I believe is what my noble friend is getting at. Our analysis is that—on the basis of regulated capital value, which takes into account not just equity but debt—it would cost at least £100 billion to renationalise the water industry. We are not going to unpick the current ownership model, during which time underinvestment and sewage pollution would only get worse. We believe that the answer is better regulation. We have introduced the Water (Special Measures) Act, which has already hit bonuses for 10 water executives and toughened the rules so that bosses face up to two years in prison for covering up sewage spills. Following the Cunliffe review this year, we are taking forward a number of reforms to the sector, chiefly the creation of a powerful new water regulator.