UK Water Companies: Chinese Financial Influence

Lord Cromwell Excerpts

Tuesday 15th September 2026 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

Yes, I can give my noble friend that assurance but, to deliver all this, we need to make sure that we encourage the right kind of investment into the infrastructure. That is one reason why the water industry is going to be included in the National Security and Investment Act mandatory notification scheme: to ensure that we have that assurance, as well as having information about delivery providers and the options to intervene, where necessary, if we are not happy with the transactions that are going forward.

[Lord Cromwell (CB)]

I know the Minister agrees with me that one of the reasons why the water industry got into such a mess was because it was so poorly regulated. A lot of the issues, such as overlaying debt, are simply a result of the regulator not being up to the job. I underline that the new regulator that we are promised—it will be called a super-regulator, apparently —really needs financially acute people who understand this sort of financial engineering. This need not have happened. We could have had a privatised water sector that was properly regulated. We did not; it was badly regulated and it got away with murder.

[Baroness Hayman of Ullock (Lab)]

The noble Lord hits the nail on the head regarding regulation. We know that it is not who owns the water company—whether it is nationalised or private—that decides how effective and efficient it is, and how well it works. It is how it is actually run and the financial nous that underpins it that does not allow it to get into debt and use leverage systems in a way that is not sustainable. That is what has caused so many problems. I completely agree with the noble Lord.