Thames Water

Lindsay Hoyle Excerpts

Tuesday 3rd June 2025 Commons Chamber

[Clive Lewis (Norwich South) (Lab)]

Let me begin by drawing Members’ attention to my entry in the Register of Members’ Financial Interests.

Let us be clear that the collapse of KKR’s rescue deal is not a blip; it is a reckoning—a moment that exposes the complete bankruptcy of the privatised water model. This morning’s interim Cunliffe review of the water sector confirms the scale of the crisis. It describes our water system—a regulated statutory monopoly—as being too risky for investors now. It did not seem to be too risky when shareholders were siphoning off billions in dividends while letting the pipes rot, the rivers choke and the debt pile up. The only people truly at risk now are bill payers, who face a 35% real-terms price hike in the next five years—and not just to fund clean water or climate resilience, because half of it is to boost investor return. So I ask my right hon. Friend again: when will the Government stop fiddling, put Thames Water into special administration, strip out the debt, and begin the job of returning our water system—not just Thames Water—to public ownership?

[Mr Speaker]

Order. Mr Lewis, I was very generous in bringing you in so early, but I did not expect you to make a statement yourself.

[Steve Reed]

I thank my hon. Friend for his question. I reassure him that the Government stand ready for any eventuality and will take action as required. We are not looking at nationalisation because it would cost over £100 billion of public money, which would have to be taken away from other public services, such as the national health service, to be given to the owners of the water companies. It would take years to unpick the current model of ownership, during which time pollution would get worse. We know that nationalisation is not the answer, because we need only look at the situation in Scotland to see that.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Under the Conservatives, Thames Water was allowed to pile up nearly £20 billion of debt while pumping sewage into rivers and lakes for 300,000 hours just last year, but rewarding its shareholders with £130 million of dividends. Today, Thames Water’s customers have been left in the lurch, and the Conservatives seem to think it is because we have all been a bit too mean about Thames Water.

The price must not be paid by the customers. Will the Secretary of State ensure that those who were responsible for making dreadful decisions rightly bear the cost instead? Is it not right for the company now to go into special administration, and to emerge from administration as a public interest company? Is it not also right that all water companies, including the likes of United Utilities in the north-west, move to a public interest model, so that caring for the environment matters more than profit?

My hon. Friend the Member for Witney (Charlie Maynard) has done more to hold Thames Water to account than Ofwat, this Government or their predecessor. Does that not prove that regulation has failed, and that Ofwat should be abolished, with a new, powerful clean water authority given the power to clean up our lakes and rivers, and our industry?

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[Steve Reed]

I thank my hon. Friend for his question. We are prepared for every eventuality, as I have outlined, and we will take whatever action is necessary to ensure the continuing supply of water to customers in the Thames Water region and elsewhere.

[Mr Speaker]

I call the Chair of the Environment, Food and Rural Affairs Committee.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Under the £3 billion loan that Thames Water has negotiated, the first drawdown of £1.5 billion will be on 30 June, which is less than four weeks away. That is contingent on Thames Water having a lock-up agreement in respect of a recapitalisation transaction, but it now has no partner to provide that. It of course chose to proceed with just one option, which has now walked away. Who does the Secretary of State think that Thames Water will now turn to—it is not exactly going to be negotiating from a position of strength—and what are the Government going to do if it cannot meet that 30 June deadline?

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[Steve Reed]

I share the hon. Gentlemen’s anger that the public have been left to pay the price of Tory failure over 14 years. One of the first things I did when I was appointed Secretary of State was get the water company chief execs into my office, seven days after the election. I got them to commit to ringfencing customers’ money that is earmarked for investment, so that it can never again be diverted to pay bonuses and dividends in the way that it was under the previous Conservative Government.

[Mr Speaker]

I call the Member for Strangford—on water, no less.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for his answers, and for his perseverance on this subject. He will understand that it is disappointing in the extreme to hear that public funding may have to be used to bail out this company. Given that it has some 8,000 British employees and serves 25% of the UK population, Government attention is very urgently needed. What steps will be taken to ensure that this is not money down the drain, to use a pun, and that we instead reconstruct a viable concern that takes a modern approach? Does the Department have a team ready and able to step up and achieve that goal?

[Victoria Atkins]

On a point of order, Mr Speaker.

[Mr Speaker]

It is not to continue the argument, is it?

[Victoria Atkins]

indicated dissent.

[Mr Speaker]

Okay, shadow Secretary of State. Let us see if it is a point of order.

[Victoria Atkins]

It is just to correct the record, Mr Speaker. The Secretary of State has given the impression in his answers—without, I am sure, intending to—that the investigations of which he is very proud, from July last year, were a direct result of Labour winning the election in July. That is simply incorrect. As I have drawn to his attention on Twitter, courtesy of a press release on 20 February last year, we in fact invested some £55 million in further investigations, which is the—

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[Mr Speaker]

Order. I am not responsible for the correction. You have certainly put the matter on the record. The Secretary of State may want to come back; if not, we will move on.