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UK’s Labour Says Thames Water Nationalization Not on the Agenda

Joe Mayes and Anna Edwards

24 June 2024 at 11:19 am·2-min read

(Bloomberg) -- The UK’s main opposition Labour Party — which looks poised to take power after the general election on July 4 — said it wouldn’t want to take Thames Water Ltd. into state ownership, despite the financial crisis facing Britain’s largest water and sewage supplier.

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“I wouldn’t want to see a nationalization,” Labour’s shadow business and trade secretary Jonathan Reynolds said in a UK election business debate on Bloomberg TV on Monday. “I think there should be a solution that falls short of that.”

Thames Water is in crisis after shareholders halted new equity injections in March and its parent company defaulted on its debts, leaving it without the investment it needs to fund a turnaround plan to stop chronic leaks and sewage spills.

The company is running down a £2.4 billion ($3.05 billion) funding pile while it seeks new investors — and if this runs out, the company would face being taken into special administration by the government, a form of temporary nationalization.

The current business and trade secretary, Kemi Badenoch, called it a “very, very difficult” situation and said Britain’s regulatory regime wasn’t working well. While some Labour MPs have argued the case for bringing the industry into public ownership, Reynolds said he wanted to see the issue resolved without government involvement.

“People should not expect the state to bail out bad investments,” he said. “Investment can involve losing as well as gaining money.”

Thames Water is waiting on a key July 11 ruling from water regulator Ofwat on its next business plan, a decision which will set price controls for water utilities, but which was delayed due to the general election.

--With assistance from Jessica Shankleman.

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