Question to the Department for Environment, Food and Rural Affairs:

To ask His Majesty's Government, further to the Written Answer by Baroness Hayman of Ullock on 8 August (HL429), what assessment they have made of the changes that have taken place since the publication of The cost of nationalising the water industry in England by the Social Market Foundation on 5 February 2018, and the impact of these changes on the cost of compensation to stakeholders.

If the whole water industry was nationalised, share- and debt-holders would need to be compensated, which could cost over an estimated £99 billion. This is based on Ofwat’s Regulatory Capital Value (RCV) 2024 figures for companies in England and Wales. This figure is higher than the Social Market Foundation's 2018 estimates because the industry's RCV has grown over the past six years, following new investment in infrastructure and RPI inflation.

Given the significant costs attached, the Government has no intention to nationalise water companies. It would take years to unpick the current ownership model, during which time the sector's issues would only get worse. The Government instead wants to tackle the situation as quickly as possible by improving the privatised regulated model.

That is why, alongside providing the regulators new powers to take tougher and faster action through the Water (Special Measures) Bill, the Government has also announced a full review of the water system. This will shape further legislation that will fundamentally transform how the current system works and clean up our rivers, lakes and seas for good.