The Prime Minister has unveiled plans for legislation that would pave the way for public ownership of failing water firms and begin a 10-year transition to what he described as a “very different water system” in the UK.
Speaking at the Labour Party conference, Andy Burnham said Environment Secretary Dame Angela Eagle would present a strengthened Water Bill to Parliament. He said the bill’s centrepiece would be the repeal of Margaret Thatcher’s ban on public ownership of water companies.
The proposals could open the way to the temporary nationalisation of debt-laden Thames Water as the Government considers a £10 billion rescue takeover proposed by lenders for the UK’s biggest water supplier. The Government has not confirmed whether it will use a special administration regime for Thames Water. The company has warned that it has enough money only until the end of the year, while the Department for Environment, Food and Rural Affairs said all options remained under review.
Burnham said the bill would strengthen public control, give mayors new powers to hold water companies to account and impose tougher consequences on companies that repeatedly fail. He also said it would close loopholes used to pay excessive executive bonuses.
“Where private companies serve the public interest, we will support them – but the consequences will be clear for those who do not, including taking back control or ownership,” he said.
Under the Water Act 1989, the Government is currently restricted from owning more than between 1% and 3% of the shares in major water and sewerage companies, depending on the company.
Cat Hobbs, director of the public-ownership campaign We Own It, welcomed repeal of the restriction but said it did not go far enough. She called for Thames Water to be placed in special administration and said the company was carrying £20 billion in debt and was close to financial collapse.
Burnham said Dame Angela would also launch a review of loopholes governing water-company executive bonuses after reports that some poorly performing companies had been able to bypass the rules. The Government is expected to provide further details of the 10-year plan later this year, with changes to be delivered through the new Water Bill.
