Thames Water

Lord Thomas of Cwmgiedd Excerpts

Wednesday 17th June 2026 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

I am not in a position to comment on chumminess, because I do not know the people involved. The whole point of bringing in a new regulator is to improve things and get the right focus, so that we can really shake up the water industry and make sure that it is fit for the future. There is no point in bringing in a new regulator if you are just tagging the old one with a new name.

[Lord Thomas of Cwmgiedd (CB)]

One of the problems in regulation is that those who are regulated are able to pay substantially greater salaries and employ better experts. Are the Government going to look at properly funding the new regulator so that the ability of those employed by the regulator is greater than that available to those who are regulated? The financial engineering that occurred did so because those who were regulated were able to devise very clever plans which, no doubt, Ofwat did not have people able to spot. It is a common problem in regulation and one that the Government have to face up to, unpalatable though it may be.

[Baroness Hayman of Ullock (Lab)]

One of the key reasons why we are in such a mess in the water industry is because the amount of debt has meant a lack of the correct investment, and that has led to so many problems regarding pollution, customer bills, and so on. If we are to make sure that the regulator operates in a way that is right for the country, we have to get a grip about what happened and why it has all gone so wrong; otherwise, we cannot make it right. Getting a proper understanding of those financial issues is going to be a critical part of that. Getting the regulator into a position from which it is able to manage and challenge such issues is going to be an important part of moving forward.