UK Water Companies: Chinese Financial Influence

Lord Blencathra Excerpts

Tuesday 15th September 2026 Lords Chamber

Asked by

[Lord Blencathra]

To ask His Majesty’s Government what assessment they have made of the government of China’s financial influence over UK water companies.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, the noble Lord raises a very important issue. It is critical that those who own and invest in our water companies are good custodians of these nationally important businesses. The reforms that we are putting in place will transform our water system to ensure that it delivers for customers and the environment, but also that it attracts investors who are committed to securing the long-term performance of our water companies.

[Lord Blencathra (Con)]

I thank the Minister for that reply, but that is for the future. The Times has revealed that emails on financial records obtained from the London office of the Industrial and Commercial Bank of China, the world’s largest bank, show that the Chinese bank issued nearly £1.26 billion in loans and borrowing options to UK water and energy companies up to July 2024. Furthermore, there were examples of concerns raised in the London office about internal due diligence being overruled by bank staff in Beijing, as well as concerns about money laundering when the bank moved £960 million for Huawei back from the UK into China following the arrest of one of its top officials. As a result of its investment in our strategic industries, there are deep concerns that this poses a financial security risk, especially since the ICBC has continued to accept business from Russian and Belarusian clients. What will the Government do about this potential security threat?

[Baroness Hayman of Ullock (Lab)]

The Government take all security threats extremely seriously. I am sure the noble Lord will be pleased to hear that the water industry will be included in the National Security and Investment Act’s mandatory notification scheme. That will require water companies and certain infrastructure delivery providers to notify government of certain proposed acquisitions. These notifications from companies will ensure that government can undertake a robust assessment of any national security risks. It will operate alongside powers that allow government to call in certain acquisitions. If necessary, we can then intervene with various remedies. These could include legally binding conditions or, in rare cases, blocking or unwinding a transaction.