Water Sector: Public Ownership

Barry Gardiner Excerpts

Monday 14th September 2026 Westminster Hall

[Barry Gardiner (Brent West) (Lab)]

I hope I do not shock my hon. Friend the Member for Colne Valley (Paul Davies), who made an excellent speech in opening this debate, when I say that I do not want a referendum to bring the water industry back into public ownership. I just want Ministers to get on and do it. The Secretary of State has the power under the Water Industry Act 1991 to petition the High Court for any water company to lose its licence for either poor performance or insolvency.

Poor performance? Discharging untreated sewage into our waterways across England and Wales 568,674 times in just one year—I call that poor performance. That is the reason that Ofwat and the Environment Agency have been imposing fines of more than £100 million a time on water companies. No river in England meets good chemical status, and only 14%—one in seven—achieve good ecological status overall.

Section 94 of the Water Industry Act sets out that companies have a principal duty to provide sewerage systems. They also have a principal duty to comply with their statutory duties under regulation 4 of and schedule 2 to the Urban Waste Water Treatment (England and Wales) Regulations 1994. The Secretary of State can apply to put a company into a special administration regime if it has contravened, or is likely to contravene, any principal duty. They have; she should.

On insolvency, let us turn to Thames Water’s disservice of my constituency of Brent West. Under section 24 of the Act, the company can be taken into an SAR if it

“is or is likely to be unable to pay its debts”.

Thames Water’s gearing is 88%. Major pension funds have written off their £956 million stake in the company, and it has failed its licence obligation to maintain investment-grade status.

[Calum Miller (Bicester and Woodstock) (LD)]

Will the hon. Gentleman give way?

[Barry Gardiner]

No, I will not.

The company’s credit rating is now junk status. The only way it claims it can pay its bills is if the regulator allows it not to do its job of meeting its environmental performance obligations.

For goodness’ sake, we do not need a referendum. We need a Secretary of State who is prepared to use the legislation that was provided for the purpose of defending the public.

--- Later in debate ---

[Dr Savage]

I absolutely agree—much like our water supply, these arrangements need to be more transparent and stink less.

Ministers have been talking about the forthcoming £104 billion investment programme as though the private sector has suddenly reached into its pockets and found that £104 billion to rescue our crumbling water infrastructure, but it has not. Ofwat has confirmed that that money will come through a mixture of customer bills and yet more borrowing and shareholder equity.

[Barry Gardiner]

I fully agree with all that the hon. Lady is saying. Does she find it strange that, although we talk about taking tough action against these companies —we talk about Thames Water’s £80 million rebate and the more than £100 million fine—it is not the investor who ends up paying that, but we the billpayers? Even then, it is not the companies’ investors who suffer; it is us.

[Dr Savage]

The hon. Gentleman makes an extremely good point that I totally agree with.

This is not private enterprise riding to the rescue; it is customers being made to pay yet again for the consequences of corporate failure, and we cannot take our business elsewhere. If I do not like my supermarket, bank or mobile phone provider, I can take my custom elsewhere, but I cannot change from one water company to another unless I physically move house. We are captive customers of a monopoly, which gives water companies an extraordinary responsibility, but they are not living up to it. Too often, we see risks pushed onto customers while the rewards go to investors.

Going back to Fairford, we can see exactly how that plays out in the real world. Fairford sewage treatment works was among the approximately 120 deferred Thames Water investment schemes. Thames Water’s former chair told the EFRA Committee that more than £1 billion was removed from its capital programme to preserve liquidity. In other words, the investment that was needed to protect communities, rivers and nature was postponed because the company needed to shore up its financial position. Now my constituents are living with the consequences.

The analysis of Professor Peter Hammond at WASP records that, at Fairford alone, more than 8,100 hours of sewage spills have flowed into the River Coln since the beginning of 2024. Under the Environment Agency’s “heavy rainfall” methodology, only 347 of those hours—just 4.3%—were assessed as compliant. That means that more than 95% of that outflow was not compliant. This is not an occasional emergency measure; it is sustained pollution on an industrial scale.

It is not only an assault on people: rivers are living ecosystems that sustain fish, birds, insects and plants. Pollution strips oxygen from the water and destroys habitats, but nature has no seat in the boardroom and no voice with the regulator. Nature depends on us to speak for it today, and I am doing what I can, as many colleagues have, to speak up on behalf of our waterways. I feel like I have spoken time and time again in this House about sewage, failing infrastructure and Thames Water, yet the sewage keeps flowing, the debts keep mounting and customers keep being asked to pay more. Frankly, they have had enough, and so have I.

I share the petitioners’ diagnosis that the present model has failed, but the Lib Dems differ from others on what we believe should happen next. We do not believe, as a number of colleagues have mentioned, that we need to spend a long time waiting for a national referendum to tell us something we already know. The Liberal Democrat answer is mutually owned public benefit water companies that are professionally managed but owned by and accountable to the customers who depend on them, with profits reinvested into the water system rather than extracted for shareholders. For Thames Water in particular, that journey should begin with special administration now. Take on the creditors, restructure the company and bring it out the other side under a fundamentally different ownership model.

Ownership change alone is not enough. The new Clean Water Authority must have the teeth that Ofwat so conspicuously lacked. It must inspect assets, publish open data and require companies to measure what they actually put into our rivers—not just the duration, but the volume and toxicity. I want to see citizen scientists and environmental experts formally represented in water company governance so that somebody is at the table to speak for the river itself.

I would like to ask the Minister for three further commitments: ban bonuses until spills end and leaks are fixed; introduce a three-year cooling-off period before the new regulator can employ people from the industry it regulates; and create a single social tariff so that nobody is priced out of the precious water that they cannot do without. The River Coln flows into the Thames, and the Thames flows past this Parliament. The evidence of the failure of privatisation is literally on our doorstep. The petitioners are right to demand fundamental change: the question at the heart of the debate is not simply whether ownership should be public or private, but who is the water system here to serve?

For too long, customers have paid the bills, carried the risk and lived with the pollution while money flowed elsewhere. Our water system should serve customers, communities and the environment, not shareholders, creditors and bottom lines. I do not want to have to come back to this Chamber to again state the obvious: we have to get upstream of the sewage crisis and change the ownership of the water companies, and change it now.

--- Later in debate ---

[The Minister of State, Department for Environment, Food and Rural Affairs (Emma Hardy)]

It is a pleasure to serve under your chairmanship, Sir Jeremy. I offer my sympathy to the Prime Minister on the loss of his father. Losing a parent hurts, whatever age you are. I thank my hon. Friends and other hon. Members for being so kind when I lost my own dad earlier in the year. Thanks, everybody.

I also thank my hon. Friend the Member for Colne Valley (Paul Davies) for securing this important debate. He cares deeply about this issue, as do so many members of the public—many more, I imagine, than the 208,000 people who signed the petition.

I pay tribute to all the citizen scientists, environmental groups, campaigners and Members of Parliament from across the House. I particularly mention Julie and Reuben; I hope I am not giving too much away when I say to Julie how deeply moved both I and the previous Secretary of State—my right hon. Friend the Member for Wycombe (Emma Reynolds)—were after we met her, and how touched and privileged we felt to be presented with one of Heather’s shells as a reminder of the need to campaign on this. I promised her that we would focus much more on public health. We have generally lost that focus, and one of the key things in all the reforms we are trying to make is putting public health back at the heart of water. That is why we created the water system to begin with—for public health—and it should be focusing on that right now.

All the failures that hon. Members mentioned—all the people who have become sick and the impact on places that people love—are outrageous. They talked about the places where they used to paddle but cannot now, and places they used to visit. It is horrific that we have ended up in this situation.

I have always wanted to introduce a water Bill that meets the political moment and the public appetite for change. I am delighted that it feels that we are closer to that. The change in Prime Minister has opened up options that were previously not available; as I will mention, more things are suddenly on the table. I apologise in advance for being an irritating politician—we can quote that one—who is not going to give specific answers, but that is honestly because we are working through things right now. We are working through things across Government, and are looking to introduce a Bill that meets that appetite for change.

Hon. Members have had many key messages. As the shadow spokesman, the hon. Member for Epping Forest (Dr Hudson), mentioned, I would normally respond to everyone. I apologise that I am not going to do that, because too many spoke. However, I hope hon. Members recognise that I have been a very open Member of Parliament. We received a parliamentary question from an Opposition Member asking how many meetings Ministers have had with Back-Bench MPs. I have done 141.

[Barry Gardiner]

First, I reassure my hon. Friend that she is not an irritating Minister at all; I think she is generally held to be a very good Minister. Can I tempt her to enlarge slightly on what she said? When we talk about an SAR, people say, “Let’s start with Thames Water—it is the obvious one to start with.” Might the reason for the Minister’s hesitation to elaborate be that the Government are now looking much more holistically at what could be done with the whole water sector?

[Emma Hardy]

We are looking at all of the sector and what can be done right across it. The Prime Minister has been absolutely clear, in all the comments he has made, that, in his words, the current water sector is “a leaking monument” to a system that prioritises private over public. He has used similar words on a number of occasions.

I completely understand why people are asking fundamental questions about ownership. For too long, pollution, poor performance and financial instability in the water industry have left customers and communities to pay the price. Infrastructure is crumbling, as we see with water outages. Lots of hon. Members mentioned national security, water and resilience. How can we meet the changing climate when we have a system that is so ineffective? I want to move towards a better system, in which we are thinking about the management of water in a catchment—about water, flooding, wetlands and nature, and how we can do all that together.

To do that, we need significant reform to give people and places greater control and to make the industry work for them again. Believe it or not—I know that nobody here would question it—there are some who question whether climate change is real. It is real, everyone. Just remember what it was like in summer. Our water industry must be fit for climate change of the future, delivering clean waterways, reliable services and fair and predictable bills.

Whatever the ownership model, we face a challenge around ageing infrastructure. We need major investment. The provision of basic services and the prevention of sewage spills is a fundamental requirement of the sector. Some 30 years of privatisation has not left the system in a good state, and that is probably an understatement. I want to create a system that protects customers, improves the environment and secures reliable water services for the future.

There is no single easy fix, but the Prime Minister has been very clear that the failures of the past cannot continue. We will look at all possible solutions for the water industry and bring forward reforms to make the sector work for people and places again. As the Prime Minister has said, later in the year our 10-year plan for Britain will set out plans for stronger public control over essentials such as water.

I will not pretend that there is one simple answer to the problems facing the sector, but what is not in question is the need for significant reform. That means tougher regulation, which we have started to see through the increased inspections by the Environment Agency, the court cases coming through and the fines it is starting to issue. We have that tougher regulation, but we still need greater enforcement, greater financial resilience and absolutely a stronger voice for customers and communities. Many hon. Members talked about democratic voice, which I agree is missing from the water sector. Yesterday, my hon. Friend the Member for York Central (Rachael Maskell) and I had a quick conversation about how we need to bring people’s voices and that accountability back into place. I know that the Prime Minister is completely committed to looking at devolution and at how organisations can be responsive and answerable to place.

Bathing water sites are prioritised for upgrades. The hon. Member for Glastonbury and Somerton (Sarah Dyke) is no longer in her place, but I know that she and I share a love of pre-pipe solutions, which is looking at nature, wetlands and how we can create spaces for water to go to prevent it from entering the system. On looking at assets, we have introduced MOT tests, which has uncovered more problems. When people first go in to inspect, they will identify different problems, and we are seeing that.

I want to pick up on a point made by one hon. Member—I apologise; I did not write down their name—about the trade unions and the workers. We can never forget that the workers on the frontline are not responsible for the failures of the water companies. I have absolute respect for them. I meet with the trade unions on a regular basis, and one thing they mention is the abuse that workers get when they are out working. They are not responsible—in fact, I would say that the workers out there on the frontline are the ones holding these companies together. I pay wholehearted tribute to the trade unionists and workers in all those water companies, who are doing a great job in incredibly difficult situations.

I completely agree that the system is not fair at the moment. We need to look at rain water management. England’s drinking water is world-leading. There are many things where we can say there is failure, but our drinking water quality is incredibly high. On referendums, my hon. Friend the Member for Southampton Itchen (Darren Paffey) mentioned that he was scarred by a previous referendum, the result of which I still feel deeply myself. But I think we know what the public think about this sector.

The Prime Minister has been clear that the Government’s priorities must be the public’s priorities. People want more ownership and control over the things that matter most to them. Public trust in the sector has been damaged by pollution, financial difficulties at some companies and a failure to invest sufficiently in infrastructure. Channel 4’s “Dirty Business” further highlighted the public concern about sewage pollution, shining a light on issues that matter to communities.

Public interest should be at the heart of how our critical services operate. For decades, the essential services that underpin daily life, including water, have suffered from over-privatisation, leading to high costs to the public. The Government are clear that the public have a right to expect those services to be affordable and accountable. We have established a public control taskforce that will rewire the state, examining how public control across sectors, including water, can be utilised to return them to public service and bring down costs for families. That ambition is reflected in the reforms we are already taking forward: strengthening accountability, improving performance, giving customers and communities a stronger voice, and ensuring that the water sector works in the public interest. We know that bold action is needed, and that is why we are fundamentally reforming the water sector.

I conclude by thanking the campaigners, the 208,000 people and everyone involved in working together on this issue. I hope we can all unite and push forward together to build the water system that we need for our communities, for our environment and for our public health.