Thames Water: Government Support

Debate between Emma Hardy and Luke Taylor

Thursday 3rd April 2025 Westminster Hall

[Emma Hardy]

I am pleased by what I believe I have heard: that no reference was made to Ruth Kelly with regard to Thames Water; instead, the comment was solely about her representing Water UK.

Further to my point about people who are not here and unable to defend themselves, as a trade unionist I want to talk about the people who work for water companies, including those who work for Thames Water and go out to fix the broken pipes, clean up sewage and deal with the sewage overspills. I have had reports from some unions that those people often face abuse for doing so. They are often on the frontline facing people angry with the company. I would like to say—and I hope we have unity on this point—that the people going out, cleaning up the mess and dealing with the difficulties are not responsible. They are not Thames Water; they are people who work for it. I thank them for the work that they do in incredibly difficult circumstances.

[Luke Taylor]

I think we would all agree on that. It was interesting to see, in the BBC documentary, that the people who work at Thames Water clearly wanted to do a good job. They wanted to improve things for residents—their neighbours, family and friends—but just did not have the chance to do so because of the structure of the company and the difficulties that it is in. This debate is about the need to help not only the customers—our residents—but the workers who want to be doing so much better and find it so dispiriting to be part of that failing organisation.

[Emma Hardy]

I completely agree. They are trying to do a good job. I add that it is a good industry to work in; the people in it have long careers and, I might add, excellent trade union representation. I am not sure that I will have complete support from everyone in the room on that point—just when I was doing so well—but I want to echo that it is not those people’s responsibility.

My hon. Friend the Member for Slough (Mr Dhesi), who is no longer in his place, was right to say that customers and the environment should be at the heart of reforms. As I mentioned, we changed the articles of association to put customers on to the boards. My hon. Friend is always incredibly caring about his residents, so I wanted to mention to him and to all the other hon. Members that we are holding the water companies to account to end water poverty by 2030. We are just about to consult—we have to wait for purdah—on changing the rules around WaterSure to extend eligibility for it.

I am pleased that my hon. Friend the Member for Clapham and Brixton Hill (Bell Ribeiro-Addy) enjoyed her three years in Yorkshire. It is a fine and wonderful part of the country, and she is always welcome to come back. She is an incredible champion for her community. I am sure that she will never need my assistance in standing up for that community, but I am always happy to give it if she does.

My hon. Friend the Member for Swindon North (Will Stone) highlighted the role that MPs can play. He showed what a good choice was made in the last election to send him here as a representative for his community. I thank him for his support for the Water (Special Measures) Act and for the further work that we are doing on regulators.

The hon. Members for Twickenham (Munira Wilson) and for Richmond Park (Sarah Olney) talked about the Teddington abstraction scheme. Without going into loads of detail, there will be a consultation, and they will be able to feed in the concerns of their residents and environmental concerns. But if either of the hon. Members feel that their concerns, or those of their residents, are not being listened to, I am happy to make arrangements for us to sit and have a longer conversation about that.

My hon. Friend the Member for Bexleyheath and Crayford (Daniel Francis) mentioned a family of four struggling with their water bill. I again highlight WaterSure. We are looking to expand eligibility for it, but at the moment, if a family has three or more children under the age of 18 living at the property and they claim child benefit, they will be eligible for WaterSure, so I urge my hon. Friend to pass that information on to his constituents. I thank him for his support for the Water (Special Measures) Act, the commission and our desire to introduce change.

Before turning to Thames Water, I want to emphasise that as a Government we recognise that the water sector is facing many challenges, and we have set out ambitious plans to tackle those challenges head-on, but it is important also to emphasise that resolving them will require long-term and transformative change. One thing mentioned here—I think by the loyal Opposition—is that there is no silver bullet or quick fix for some of the problems that we face.

We recently took the Water (Special Measures) Act through Parliament; it was amended in the other place. It will drive meaningful improvements in the performance and culture of the water industry and act as a first step in enabling wider and transformative change across the water sector. The Act delivers on the Government’s manifesto commitments by blocking bonuses for executives who pollute our waterways, enabling the bringing of criminal charges against persistent lawbreakers, enabling automatic and severe fines for wrongdoing, and ensuring monitoring of every sewage outlet.

In October we launched, in collaboration with the Welsh Government, an independent commission on the water sector regulatory system. This is the largest review of the water industry since privatisation. The commission will report in the middle of this year and make recommendations on how to tackle systemic issues in the water sector to help restore our rivers, lakes and seas to good health, meet the challenges of the future and contribute to economic growth. Those recommendations will form the basis of further legislation to attract long-term investment and clean up our waters for good.

I now turn to Thames Water specifically before moving on to the sector as a whole. I will say as much as I am able to about Thames Water, bearing in mind that it is going through a confidential process. I completely understand what has been said. Let me say at the beginning that I am not here as the hon. Member for Thames Water, and I am not here to defend the actions of Thames Water. I want to reassure and, I hope, send a message to the general public that we are monitoring the situation and the company remains stable. In the event of special administration, the taps will still function and the sewage will still be taken—I want that message to be heard by the general public—so there is no need for alarm. The people working for the company will continue to be paid in the event of special administration. As a responsible Government, we are preparing for every eventuality. However, at the moment the company remains stable.

I think it is incorrect to say that we are “resisting” special administration. That would be a total mischaracterisation of what special administration is and the process of entering the special administration regime. It is not that we are resisting anything. A special administration order is a well-established mechanism to ensure that the company continues to operate and that customers continue to receive their water and wastewater services, so customers need not be concerned about any disruption to their water supply or wastewater services because of the financial position of their water company. The provision of water and wastewater services will continue.

Special administration is the ultimate enforcement tool in the regulatory toolkit, and as such, the bar is set high. The law is clear—this obviously links to insolvency legislation—and states that special administration can be initiated only if the company becomes insolvent, can no longer fulfil its statutory duties or seriously breaches an enforcement order. Only in that scenario does the Secretary of State for Environment, Food and Rural Affairs or Ofwat—crucially, with the consent of the Secretary of State—have the power to request the court to place a company in a special administration regime. If that situation arises, the court must be satisfied that there is sufficient evidence to demonstrate that the water company in question is insolvent, can no longer seriously fulfil its primary statutory duties, or has seriously breached an enforcement order. It will then make a special administration order, appointing a special administrator.

That is a hypothetical situation. It is not, I stress, the situation that we are talking about now, but let us say that somebody said, “We want to put this company into special administration”; the decision then would be made by the court, and the court would need to be satisfied that there is the evidence to put that company into special administration.