Thames Water

Lord Redesdale Excerpts

Wednesday 17th June 2026 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

The detail of the regulator will be in the new Bill. The noble Lord has mentioned this to me a number of times. That companies have been allowed to generate debt to use the money has been a cause of many of the difficulties that we see today. The way that water companies have been able to increase the debt is not acceptable. That is one of the key things that we want to work on. If there was not as much debt, we would not have so many problems. That is one of the reasons why water companies are failing on all sides—whether investment or customer support.

[Lord Redesdale (Non-Afl)]

My Lords, I declare my interest as set out in the register. Thames Water bills went up around 40% to pay for the current AMP cycle. However, the present company structure means that it will not be able to make the investment to meet the targets under the present AMP cycle. Indeed, investment is far below what is needed to meet the present AMP cycle’s objectives. Given that, is Thames Water not in breach of its licence conditions? Therefore, should Ofwat not remove the licence, put the company into special administration and look at a measure—through either nationalisation or mutualisation, or by bringing in other companies—to fill the gap and make sure that the money is spent on the environment?

[Baroness Hayman of Ullock (Lab)]

My understanding is that that is not the assessment by Ofwat at the current time. However, the noble Lord makes some good points. I am sure that the Secretary of State and the Minister for Water meet regularly with Ofwat. We are watching very closely for when or if there is a considered view that it has tipped into that space.

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

I am sure the noble and right reverend Lord will be pleased to hear that something drastic is about to happen. Ofwat is the regulator currently, which is why it is its decision as to whether to accept the proposal referred to in the Statement. But the water Bill, which we will bring to Parliament shortly, removes Ofwat and brings in a new regulator, which we are determined to make manage the water industry in a much better and more effective way.

[Lord Redesdale (Non-Afl)]

My Lords, I must apologise to the House. Apparently, Members have to be more specific about their interests. I am a senior shareholder in the Water Retail Company. Are Defra and Ofwat looking at the implications for the non-household sector if Thames Water goes bust?

[Baroness Hayman of Ullock (Lab)]

The simple answer is that we are considering all possibilities and eventualities. We want to have everything on the table, because the most important thing is that we continue to maintain this absolutely vital public service.