Thames Water: Bids

Lord Sikka Excerpts

Monday 28th April 2025 Lords Chamber

Asked by

[Lord Sikka]

To ask His Majesty’s Government what guarantees they expect to give to, or receive from, any bidder for Thames Water.

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

I had almost relaxed then.

My Lords, it would be inappropriate for the Government to comment in detail on a company’s commercial regulations. Ofwat notes that the company has now moved to the next stage in its equity raise process, and it continues to engage with the company to ensure the delivery of the financial and operational turnaround that both customers and the environment deserve. Any investors will be expected to show that Thames Water will meet its statutory and regulatory obligations.

[Lord Sikka (Lab)]

My Lords, I thank the Minister for her Answer. Let us look at the facts. Thames Water was put on the road to ruin by private equity. Now its shareholders have designated KKR, another private equity group, as their preferred bidder. KKR’s business model is profiteering, high leverage, low investment, asset stripping and high cash extraction. That will inevitably multiply Thames’s problems. The Water Industry Act 1991 gives the Secretary of State powers to vary the licensing conditions. We need to know precisely what the Government will demand from the new owners of a company that already has 187 criminal convictions.

[Baroness Hayman of Ullock (Lab)]

Regarding the company choosing KKR as its preferred bidder in the ongoing equity raise process, clearly Thames Water is a commercial entity engaged in a public equity raise, and it would therefore be completely inappropriate for the Government to comment on that. However, I note that the company had a number of potential bidders to choose from, which indicates that a market-led solution to the financial resilience of the company is a possibility.