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Collapse of KKR’s rescue deal for Thames Water is “a reckoning” that “exposes the bankruptcy of the privatised water model” an MP told the House of Commons on Tuesday.
The Environment Secretary Steve Reed has said nationalisation of Thames Water and other utility companies is “not the answer.”
Reed said that by keeping the troubled Thames Water afloat will take money away from the NHS, he warned.
The Shadow Environment Secretary Victoria Atkins said that Labour ministers have “talked themselves out” of a rescue plan for Thames Water which has around £19 billion of debt.
She added, “According to a source close to KKR, one of the reasons they pulled out was because they were concerned about negative rhetoric directed at Thames Water and the rest of the industry in recent weeks by the Secretary of State and other ministers; in other words, the Secretary of State and his ministers have talked themselves out of this rescue deal.”
Reed told MPs in the House of Commons, “The Government stands ready for any eventuality and will take action as required.
“We are not looking at nationalisation because it would cost over £100 billion of public money that would have had to be taken away from other public services like the National Health Service to be given to the owners of the water companies.
“It will take years to unpick the current model of ownership, during which time pollution would get worse and we know that nationalisation is not the answer – you only have to look at the situation in Scotland to see that.”
Labour MP Clive Lewis told the Commons on Tuesday, “The collapse of KKR’s rescue deal isn’t a blip, it’s a reckoning – a moment that exposes the complete bankruptcy of the privatised water model.
“This morning’s interim (Sir Jon) Cunliffe review into the water sector confirms the scale of the crisis. He describes our water system, a regulated statutory monopoly, as now too risky for investors.
“Too risky – but it didn’t seem too risky when shareholders were siphoning off billions in dividends while letting the pipes rot, rivers choke and the debt pile up.”
He urged the government to “stop fiddling, put Thames Water into special administration, strip out the debt, and begin the job of returning our water system – not just Thames – back into public ownership.”
Liberal Democrat environment spokesman Tim Farron said, “Thames Water’s customers have been left in the lurch, and the Conservatives seem to think it’s all because we’ve all been a bit too mean about Thames Water. The price must not be paid by the customers.
“Will he ensure that those who are responsible for making dreadful decisions rightly bear the cost instead?”
Reed replied, “There is a procedure to be followed for special administration.
“We stand ready should that be required in this case, or in any other case with regulated industries.”
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