Lords statement regarding the position of Thames Water and the proposed recapitalisation package under consideration.

Lords statement regarding the position of Thames Water and the proposed recapitalisation package under consideration.

My Lords, I thank the Minister for answering on this Statement in your Lordships’ House. Thames Water has scandalised our country while asking its customers to pay more for less. For the sake of customers and taxpayers, we now need stability, not uncertainty. This Statement has not announced any change...

My Lords, I thank the Minister for answering on this Statement in your Lordships’ House. Thames Water has scandalised our country while asking its customers to pay more for less. For the sake of customers and taxpayers, we now need stability, not uncertainty. This Statement has not announced any change...

My Lords, I want to return to a point I raised in this House only last week when I asked whether the Government were delaying the clean water Bill pending resolution of the Thames Water situation. We were told then that the Government were ready to deploy a special administration...

My Lords, I want to return to a point I raised in this House only last week when I asked whether the Government were delaying the clean water Bill pending resolution of the Thames Water situation. We were told then that the Government were ready to deploy a special administration...

My Lords, I thank noble Lords for their questions on this Statement. There are quite a lot

of questions, so I will do my best to cover them but, as always, if I have missed anything out, we will get back to noble Lords.

First, it is important to point out...

My Lords, I thank noble Lords for their questions on this Statement. There are quite a lot

of questions, so I will do my best to cover them but, as always, if I have missed anything out, we will get back to noble Lords.

First, it is important to point out...

My Lords, the Minister will be aware that it is not necessarily just ownership of a water company that is the deciding factor, and there are other jurisdictions in which leakage and sewage going into rivers and the sea are problems. I think of Denmark, where the vast majority of...

My Lords, the Minister will be aware that it is not necessarily just ownership of a water company that is the deciding factor, and there are other jurisdictions in which leakage and sewage going into rivers and the sea are problems. I think of Denmark, where the vast majority of...

Clearly, we need to see the water Bill to see the detail on that and many other issues that people have a particular interest in. The Government are clear that we do not want to have overburdensome regulation. That is important. The regulator is there to help support the industry...

Clearly, we need to see the water Bill to see the detail on that and many other issues that people have a particular interest in. The Government are clear that we do not want to have overburdensome regulation. That is important. The regulator is there to help support the industry...

My Lords, the dire position of Thames Water is, above all, a regulatory failure. Does the Minister accept that Ofwat’s record as a regulator has been absolutely woeful? Above all, it failed to require water companies to invest over a long period of time in appropriate infrastructure of all kinds.

My Lords, the dire position of Thames Water is, above all, a regulatory failure. Does the Minister accept that Ofwat’s record as a regulator has been absolutely woeful? Above all, it failed to require water companies to invest over a long period of time in appropriate infrastructure of all kinds.

I suggest to the noble Lord that the fact that we are talking about removing Ofwat and bringing in a single, more powerful regulator in the water Bill answers his question. It is not just about who the regulator is but about what the regulator’s priorities are: what is it...

I suggest to the noble Lord that the fact that we are talking about removing Ofwat and bringing in a single, more powerful regulator in the water Bill answers his question. It is not just about who the regulator is but about what the regulator’s priorities are: what is it...

My Lords, when the water industry was privatised over 30 years ago, it was almost entirely debt-free. Since then, as the Minister said, debt has been racked up. The Minister said that there will be provisions in the new water Bill for creating a new regulator. Further to the previous...

My Lords, when the water industry was privatised over 30 years ago, it was almost entirely debt-free. Since then, as the Minister said, debt has been racked up. The Minister said that there will be provisions in the new water Bill for creating a new regulator. Further to the previous...

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...

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...

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...

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...

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...

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...

My Lords, do the Government agree that Thames Water needs to put in a lot of new, larger waste pipes and an extra reservoir to cater for the extra population that we have experienced in the area? What is the Minister’s rough estimate of how much capital this new investment...

My Lords, do the Government agree that Thames Water needs to put in a lot of new, larger waste pipes and an extra reservoir to cater for the extra population that we have experienced in the area? What is the Minister’s rough estimate of how much capital this new investment...

On the basis that I do not know how many pipes, what size reservoir and where it would be, it is difficult to assess a capital investment. The Government have a reservoir policy. We have committed to building new reservoirs. No Government have done that for many years now, which...

On the basis that I do not know how many pipes, what size reservoir and where it would be, it is difficult to assess a capital investment. The Government have a reservoir policy. We have committed to building new reservoirs. No Government have done that for many years now, which...

I agree with the Minister that debt overburdening of the company was a major cause of its problems. She has heard me call many a time for the new regulator to have the proper understanding of financial engineering, which the current Ofwat team simply did not have. That enabled the...

I agree with the Minister that debt overburdening of the company was a major cause of its problems. She has heard me call many a time for the new regulator to have the proper understanding of financial engineering, which the current Ofwat team simply did not have. That enabled the...

The noble Lord is correct that how debt was leveraged was unsustainable. It has led us to a situation where companies—not just Thames Water—are saddled with a ridiculous amount of debt that the regulator should have had more of a grip on. I am happy to discuss further the noble...

The noble Lord is correct that how debt was leveraged was unsustainable. It has led us to a situation where companies—not just Thames Water—are saddled with a ridiculous amount of debt that the regulator should have had more of a grip on. I am happy to discuss further the noble...

My Lords, on 9 June the Minister said that

“we consider the regulated capital value of the water sector to be the closest proximity for the total value of the sector’s debt and equity; it is currently £107 billion

”.—[Official Report, 9/6/26; col. 1241.]

On that basis, Thames Water is worth £21.893 billion....

My Lords, on 9 June the Minister said that

“we consider the regulated capital value of the water sector to be the closest proximity for the total value of the sector’s debt and equity; it is currently £107 billion

”.—[Official Report, 9/6/26; col. 1241.]

On that basis, Thames Water is worth £21.893 billion....

It is because that is the generally understood figure. That is why we go with that figure.

It is because that is the generally understood figure. That is why we go with that figure.

My Lords, the action by the Secretary of State in her letter is good. I fully support what she wrote regarding this proposition. Without going back on all the leverage, the main leverage issue on Thames Water happened in 2006. For some reason Ofwat did not follow entirely the strategy...

My Lords, the action by the Secretary of State in her letter is good. I fully support what she wrote regarding this proposition. Without going back on all the leverage, the main leverage issue on Thames Water happened in 2006. For some reason Ofwat did not follow entirely the strategy...

That is an interesting point and it is being discussed. Thames Water is huge and has quite different catchment areas. I remember going on a boat to look at the successful tidal project in London that the noble Baroness talked about, in the early days. It was fantastic. However, you...

That is an interesting point and it is being discussed. Thames Water is huge and has quite different catchment areas. I remember going on a boat to look at the successful tidal project in London that the noble Baroness talked about, in the early days. It was fantastic. However, you...