Thames Water nationalisation moves closer as government objects to rescue deal

Thames Water serves about 16 million people in London and the south of England. Photograph: Yui Mok/PA View image in fullscreen Thames Water serves about 16 million people in London and the south of England. Photograph: Yui Mok/PA Thames Water nationalisation moves closer as government objects to rescue deal Environment secretary raises concerns that customers would face ‘undue burden’ from £10bn plan Thames Water should be nationalised, says Burnham Nils Pratley: the tide is turning on Thames Water The UK environment secretary has objected to a £10bn rescue proposal for Thames Water because it would place an “undue burden” on consumers, pushing the troubled utilities firm closer towards public ownership. Emma Reynolds wrote to Iain Coucher, who chairs the regulator Ofwat, on Monday to raise concerns about the plan for the UK’s biggest water company as she is worried that customers will lose out. Ofwat was close to a deal under which the struggling company would avoid any new fines over sewage leaks for four years in return for a cash injection into the business from its creditors, who would take over the company. Thames Water should be nationalised, says Andy Burnham Reynolds said on Tuesday: “Thames Water customers have been let down for far too long, with 15 years of underperformance, increasing serious pollution and customers left to pick up the bill.” Ofwat said it was reviewing her letter, as well as the rescue consortium’s plans “to assess whether they deliver a turnaround in the company’s operational performance and strengthen its financial resilience to the benefit of customers and the environment”. Thames Water debt chartSpeaking in the House of Commons, Reynolds said the “long-term resilience” of the water systems may not be adequately protected: “I do not believe that the current proposal goes far enough to protect customers and the environment. “I have three particular concerns … the unfair cost to customers, delays to vital infrastructure investments, and delays to environmental improvements.” Her Conservative shadow, Victoria Atkins, said the government should be careful not to scare off potential investors. On Tuesday, 107 MPs, including 42 from Labour, signed an open letter to Ofwat and Reynolds calling on them to reject the Thames creditors’ latest deal and instead bring the company into a special administration regime, a form of temporary nationalisation. Earlier this month, Andy Burnham said Thames Water should be nationalised, saying public ownership of water companies would “absolutely be an option” if he becomes Labour leader.