Water executives called in for talks with new Labour environment secretary
Water company bosses have been called in for talks with Steve Reed, Labour’s new environment secretary, ahead of a set of key investment rulings by the water regulator.
Steve Reed will meet executives from all 16 water companies across England and Wales, City PM understands, including trouble-hit supplier Thames Water.
The firm yesterday warned it risked running out of money by the end of next May after releasing annual results showing its liquidity at the end of June was just £1.8bn, “only sufficient to fund our operations for the next 11 months”.
Thames Water is creaking under the strain of an £18bn debt pile and has been verging on collapse since March after shareholders vetoed a plan to invest £500m emergency case.
It comes as the regulator Ofwat prepares to launch its ruling – or draft determination – tomorrow [Thursday, July 11] on whether firms are allowed to increase customers’ bills.
A source close to Reed said: “The last Conservative government weakened regulation allowing the sewage system to crumble and illegal sewage dumping to hit record levels.
“The election of this Labour government is a reset moment for the water industry.
“In the coming weeks and months, this government will outline its first steps to reform the water sector to attract the investment we need to upgrade our infrastructure and restore our rivers, lakes and seas to good health.”
Prime Minister Keir Starmer’s administration has previously said nationalising the crisis-hit company was “not consistent” with the party’s fiscal rules.
Ofwat said yesterday that the news of teh deepening crisis at Thames Water “underscores the need for it to address two fundamental issues of securing its financial resilience… and the need to turn around its poor operational performance”.
Thames Water declined to comment for this story.