Thames Water Debate
Full Debate: Read Full DebateDepartment: Department for Environment, Food and Rural Affairs
Barry Gardiner
Main Page: Barry Gardiner (Labour - Brent West)Department Debates - View all Barry Gardiner's debates with the Department for Environment, Food and Rural Affairs
(1 month, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Emma Reynolds
I thank the hon. Gentleman, I think, for his support for my statement today, although it was slightly half-hearted. He is right to say that there have been serious pollution incidents in different water companies, but especially in the Thames, and that is of grave concern to the public and to Thames Water’s customers in particular. I point out to him that there are two types of special administration regime. An insolvency SAR is an insolvency process and is for the company directors to determine. A performance SAR would be triggered if a company was in serious breach of its statutory duties or if the company breaches an enforcement order in a way that is so serious that it is inappropriate for the company to retain its licence. The Government stand ready for all eventualities, including a SAR.
Barry Gardiner (Brent West) (Lab)
Will the Secretary of State confirm that, in the event of a special administration regime, any compensation would be based on appropriate value as set out in the case of Lithgow v. the UK, not on regulated capital value, as suggested by the shadow Secretary of State. For Thames Water, appropriate value would take account of the £23 billion in infrastructure repairs needed to meet condition P of its licence and comply with its statutory obligation, as well as the £13 billion of dividend and debt interest already paid to creditors. Appropriate value would therefore be nil. The Secretary of State said that Ofwat is responsible for taking the decision to modify the licence. I urge her to read section 12A(7) of the Water Industry Act 1991, because she has the power to overrule.
Emma Reynolds
I think there were a number of questions there. As I have said, there is obviously a difference between a special administration regime and nationalisation. My hon. Friend refers to regulatory capital value, and he is right to suggest that the price of any company is a complicated matter, but in the event of a special administration regime, the state would seek to recoup the investment it had made upon SAR exit. Nationalisation would be a different matter.