Future of Thames Water

Layla Moran Excerpts

Tuesday 6th January 2026 Westminster Hall

[Layla Moran (Oxford West and Abingdon) (LD)]

I beg to move,

That this House has considered the future of Thames Water.

It is a pleasure to serve under your chairpersonship, Mrs Harris, and I thank the Minister for attending this debate to listen to my constituents’ concerns. What better way to start the year than to debate the future of Thames Water? But—let me be frank—I do not believe this company has a future. If Thames Water had been genuinely subject to market forces over the years, it would have collapsed many, many decades ago, but instead, a broken regulatory system and chronic mismanagement have repeatedly let businesses and customers down.

Consider this: last year, Robert, aged 81, from Abingdon, received a water bill for—wait for it—£39,000. Thames Water later revised it to £37,688.64. He and his partner Patricia said, quite understandably, that they had become ill from stress because of the bill. It took two months, an intervention and a BBC story to cancel the absurd charge. That case epitomises the incompetence and disregard for customers that has eroded public trust in this company.

Another example is 70-year-old Morna from Botley, who suffered repeated floods in her house due to a blocked Thames Water drain. I visited and saw for myself the strain it took for her to fight for over a year with Thames Water for it finally to unblock it. The delays and inaction are just unacceptable.

I have one last example: Len and Jenny are in their 80s and in frail health, and they lost basic sanitation to their home in 2023. A blocked pipe caused sewage to enter through air bricks and they were left with no toilet, no washing facilities and no power. All they had was a portaloo in their garden and a tanker to pump out sewage. Foul waste continued to bubble up through the basin in their bathroom. We are now in 2026, and Jenny and Len still do not have the recommended non-return valve, a firm date for the maintenance or compensation. If Thames Water cannot even do those basics, what can it do?

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for bringing this debate to Westminster Hall. Thames Water is £20 billion in debt, and it needs £20 billion to service the investment that is necessary. The chief executive has had substantial payouts and dividends. Is it not time for the Government to intervene, take over and get the job right?

[Layla Moran]

Thames Water’s repeated mismanagement is why the Liberal Democrats have long called for all of the water company bosses not to receive that level of payout. We will continue to campaign in that vein.

Locally, we have been campaigning on the issue for many years. Along with Safer Waters, Thames21 and local activists, we secured bathing water status for Port Meadow in Oxford, only the second inland site in the country. That has forced Thames Water to monitor and report on water quality there, but for the last three years, that rating has been “poor”. Residents in Oxford, like others across the country, continue to risk their health every time they swim.

One would think that poor quality would logically lead to action, but it seems not to have done. In a debate just two years ago, I called for legally binding targets on sewage pollution, so I was pleased when the Government promised last July to halve sewage pollution by 2030. Today, I urge the Minister and the Government to move faster and to take all legal and financial steps necessary to make that change happen, because, as we have heard, Thames Water customers experience poor service, flooding, sewage in their homes and sewage in their rivers, and for this, they are being asked to pay more—indeed, 31% more in 2025-26 than the year before.

[Sarah Olney (Richmond Park) (LD)]

My hon. Friend is giving an excellent speech on a topic that is very close to every Liberal Democrat heart. Thames Water is in £17 billion of debt, yet the company continues to progress with the Teddington direct river abstraction in my constituency, with a plant that would be operational for just six weeks a year at a cost of £1 billion. The project is strongly opposed locally on environmental, social and economic grounds. Does my hon. Friend agree that Thames Water should scrap the project and use that money to cut bills?

[Layla Moran]

I do not trust Thames Water to do anything, and I will come on to an example of an even bigger and even worse project. We want investment and change, but the problem we have is that there is no longer any trust that this company can do that on time and on budget, and in a way that is actually going to deliver real change. That is why 2,507 local residents across Oxfordshire backed a Lib Dem petition calling for these price hikes to be scrapped. If this were a proper private company, it would not be asking customers to pay more for this level of service, yet that is exactly what it has done, and it has frankly given them no say in the process.

While I am lambasting this company today, I am not having a go at its hard-working staff. We need to be clear that they are not to blame for the current woes and dismal performance. In July, I visited Abingdon sewage treatment works, and friendly and knowledgeable people who had worked there for decades told me how the system is supposed to work: tanks remove the sludge, microbes digest bacteria and clean water is discharged. It was so clean that I could have drunk from it there and then—in fact, a heron strutted around the wetland ponds showing exactly what would have been possible. Sadly, that summer idyll is all too frequently shattered when the rain falls, the floodgates open and raw sewage pours out.

At this point, I should acknowledge the role that we and the public can play in helping to reduce pressure on the system. We have seen with our own eyes those mountains of wet wipes being removed from the pipes, and that skip full of rubbish that should never have been flushed down the toilet in the first place. Do the Government have plans for a public information campaign on this matter—paid for, of course, by water company profits? If we saw as many adverts on this issue as we do on things such as fast food, it would help everyone in protecting our rivers.

However, I do not want to downplay the institutional failings that we see in the company. We need additional capital investment; in Abingdon specifically, the staff were asking for another set of tanks to filter and clean the sewage to help that problem there, but it is the same everywhere. Last year, Thames Water admitted that £19 billion of its assets were deemed “poor” or “failed”, posing a risk to thousands of homes.

[Freddie van Mierlo (Henley and Thame) (LD)]

My hon. Friend speaks of the under-investment in sewage treatment works and other assets. Nowhere is that truer than in Oxford sewage treatment works, which serves residents in my constituency outside of Oxford city. The site already cannot cope with the amount of sewage that it has to deal with. Does my hon. Friend also find it strange that the Environment Agency suddenly dropped its objections to developments, days after receiving a letter from lobbying interests around Oxford? Does she share my scepticism that Thames Water can deliver on the upgrades before the homes are built?

[Layla Moran]

My scepticism about Thames Water is basically the theme of my entire speech, and I completely agree. We absolutely need more houses in and around Oxford—on that I am clear. However, if that work is one of the things stopping those homes from being built, we must of course ensure that it is done to the highest possible standard. It sounds like something has happened there, and I would love to understand better why the EA withdrew that objection with no further change.

More than half of sewage treatment facilities are operating below their required capacity, while raw sewage discharge doubled between 2023-24 and 2024-25. That is a symptom of chronic underinvestment, and we need serious capital to fix the problem. Instead, Thames Water chose to funnel profits into dividends. As recently as March 2024, the company paid £158.3 million out to shareholders. This is a company that is hanging on to a lifeline of creditor goodwill, having already raced through £1.5 billion of the emergency cash that was injected 11 months ago. The scale of the mismanagement is staggering.

No one doubts the need to take steps to secure our water supply for the future in the context of the climate change, but I now come to the local example that I promised my hon. Friend the Member for Richmond Park (Sarah Olney). Thames Water presides over leaks to the tune of over 592 million litres a day, which is nearly a quarter of all the water it manages—it is unbelievable. My residents have justified questions about the validity of the arguments underpinning the south-east strategic reservoir option, also known as SESRO, which lies just outside Abingdon. It is estimated to cost £7.5 billion and counting, and we should remember that it started at £2.2 billion, and barely nothing has changed since then. If such a major project must go ahead—the Government say it should, fine—then can the Minister tell me something that I just do not get? Do they really trust Thames Water to get this done right? It is like running a bath when a hole has been punched through the plughole. I would not trust Thames Water to run a bath, let alone deliver a project of this size.

Will the Government also make clear what residents can expect from this project, should it go ahead? Will there be genuine community benefit? As it stands, the company is promising lots of lovely things—sailing clubs and all sorts—but when questioned on the matter at a recent drop-in event, the promises seemed to be nothing more than an artist’s impression. Will the Minister therefore intervene to ensure that the local villages and towns that will have to suffer the disruption get something out of it, beyond higher bills?

Time and again, constituents are being let down by chronic under-investment. For decades, every Government of every colour have presided over some form of this mess. But I do not want to blame; I just want solutions. As a result, I have some questions. What are the Government doing to prepare for when Thames Water exhausts the £1.5 billion of emergency funding? Have they considered the Liberal Democrats’ plans to turn it into a public benefit company? That is not public ownership, which others call for. The taxpayer would not take on the debt, but the profits would be invested back into infrastructure and fixing the problem, not used to enrich the likes of Abu Dhabi Investment Authority and the China Investment Corporation.

Will the Government promise a full response to the Independent Water Commission report and the creation of the new regulator with teeth? When can we expect the White Paper? Will we all, together, make a new year’s resolution—that this is the year we sort out Thames Water’s mess, for the sake of people and our planet, once and for all?

[Carolyn Harris (in the Chair)]

I remind Members to bob if they wish to speak, so that we can ascertain whether we need a time limit. I will call the Front Benchers at 5.08 pm, with the Minister rising at 5.18 pm.

--- Later in debate ---

[Layla Moran]

I thank you, Mrs Harris, and all Members for their contributions to the debate. I am not totally sure we got all the answers we were hoping for. Soon, I hope, means soon. I look forward to seeing the detail of what is in the White Paper, where many of the answers will be.

I am sure the Minister and the officials will have heard that the scepticism on both sides of the House is pretty strong. I would argue that the company is not and has not been meeting its obligations for quite some time now, either financially or to its customers. We will see what the conclusions will be. I rather suspect that, sooner rather than later, they will land on the place where we have been for quite some time. I thank all Members for participating.

Question put and agreed to.

Resolved,

That this House has considered the future of Thames Water.