Reform UK calls for Thames Water to be renationalised

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Thames Water should be “put out of its misery” and renationalised, according to the deputy leader of Reform UK, in a sign that the backlash against water privatisation has become an increasingly populist issue.

Richard Tice told the Financial Times that the situation at the heavily indebted UK utility was “completely untenable” and that City financiers were trying to “rip off consumers even more” with high interest loans and millions in fees.

“It is essentially bust, capital projects are being delayed and it should be put out of its misery now,” he said. “There has to be moral hazard. Let it go into special administration for £1 and reorganise it to the benefit of taxpayers and consumers.”

The comments by the deputy leader of the rightwing populist party came days after Thames Water — which provides water and sewerage services for 16mn households but is struggling under a £19bn debt mountain — warned that it risks running out of cash in the new year.

Unless it can obtain a £3bn loan from creditors, Britain’s largest privatised water utility risks being temporarily renationalised under the government’s special administration procedure.

The 2.5-year loan on offer from creditors, which requires approval in court next week, comes at a 9.75 per cent interest rate, with fees taking the real interest cost much higher. 

Reform’s call for renationalisation reflects a shift by populist parties around the world to focus on what they see as the extractive vices of global capitalism, including private equity investors, and their call for policies that have historically been more aligned with the left.

In Hungary, Viktor Orbán’s Fidesz party has reversed unpopular and costly water privatisations in Pécs and Budapest. In the US, meanwhile, vice-president elect JD Vance has called for more unionisation of workers in the private sector to protect jobs and drive up wages. 

The UK Labour government has said it favours a private-sector solution to the crisis at Thames over special administration, under which the state temporarily takes control of a company to ensure it remains in operation.

This is in part because it is concerned that, if Thames Water entered the special administration regime, leftwing MPs inside the governing party would call for all water companies to be permanently renationalised.

In response to a growing public outcry over executive pay and sewage discharges, the UK Green party has called for public ownership of all water companies. The Liberal Democrats, Britain’s third-biggest party, has said Thames Water should be brought under special administration.

Tice, formerly chief executive of property investment group CLS Holdings, said that, at present “water is not a competitive market, it’s a monopoly”. 

Reform’s general election manifesto included a pledge to bring 50 per cent of all utilities into public ownership, with the other half to be purchased by British pension funds.

David Hall, visiting professor at the University of Greenwich, said there was a global trend towards the return of water services to full public ownership and operation.

Thames Water said it had maintained high levels of capital investment in its ageing assets and to improve network resilience for the benefit of customers and the environment.

“We continue to believe a market-led solution is the best financial and operational outcome for customers, the environment, UK taxpayers and the UK economy,” a spokesperson said.

Thames Water’s creditors declined to comment.

The Department for Environment, Food and Rural Affairs said: “The company remains stable and the government is closely monitoring the situation.”