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Government refuses water nationalisation after securing £88bn investment by sector bosses, MPs told
A household water tap

THE government is refusing to nationalise water companies after securing £88 billion in private investment from their fat cat bosses, the Commons has heard.

Decades of profiteering from Britain’s creaking water infrastructure have left parts of the country facing water rationing in the 2030s, the second reading of the government’s Water (Special Measures) Bill heard.

But responding to growing calls to nationalise the sector, water minister Emma Hardy said this would be “complex, time-consuming [and] would halt the investment needed.”

“We would lose the £88 billion of private investment and it would do nothing to stop sewage pollution,” she said.

Water companies agreed to provide the sum for upgrade works greenlit by the regulator Ofwat earlier this year.

Ms Hardy added that the Bill’s scope is “intentionally narrow” to improve “the performance and culture of the water industry as an urgent priority.”

Opening the debate on Monday, Environment Secretary Steve Reed said Britain’s “green and pleasant land is no longer quite so pleasant” as “our rivers, lakes and seas are being choked by record levels of pollution: by untreated sewage as well as chemicals and runoff from agriculture and highways.”

“The failure to invest in our water infrastructure means the demand for clean drinking water will start to outstrip supply as early as the mid-2030s – without urgent action some parts of the country would then face water rationing,” he said. 

“The water system is broken.”

He said the previous Tory government had “hobbled the regulator,” allowing water companies to “divert millions of pounds into wholly unjustified multi-million-pound bonuses and dividend payments.”

MPs backed the Bill without a division. It faces further scrutiny in the House of Commons at a later date.

It proposes jail for water executives who obstruct investigations by environmental regulators, with new “automatic and severe fines” for wrongdoing that would come out of firms’ profits and a block on bonus payments “to executives who pollute waterways.”

Surfers Against Sewage policy officer Louise Reddy said: “This bill will go a small way to holding companies to account, but we know they can go further.

“We are also worried that new powers set out in the Bill will mean customers pick up the bill for companies’ debts if they are taken into special administration, something Thames Water is on the cusp of.

“We are demanding they ban this bailout, and promise we will not pay for the mess water bosses have put us in.”

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