WOKINGHAM MP Sir John Redwood has backed calls for Ofwat to raise customer bills to allow Thames Water to make infrastructure improvements.
Amid fears the company could collapse over debt levels, the water firm’s boss, Chris Weston, said bills should rise by 40% over the next few years. Investors have said it will not pour in additional money unless it was matched by customers.
BBC News reported that investors were due to pump in almost £4bn into the business over the next two years, but have withheld the first payment – due at the end of this month – saying its turnaround plan is “uninvestible”.
This would see average bills rise from £436 to £609.
“That is the price customers have to pay for the investment in our infrastructure that’s needed,” Mr Weston said.
Appearing on Newsnight on Thursday, March 28, Sir John appeared to back this stance.
He told viewers: “Very clearly the regulator has to allow the water industry to collect more from its customers in order to speed up the improvements.”
And in a post on his website, he backed the case for privatised firms to continue, saying there are strong arguments against the nationalised model for commercial services including telecoms, water, electric and gas.
“As monopolies not facing daily competitive pressure they put up prices too much and tolerated poor service,” he wrote.
He also wrote: “When making the case against nationalisation I was able to demonstrate nationalised industries were bad for customers, charging too much, bad for taxpayers, costing too much, and bad for employees, getting rid of so many.”
This stance has baffled his counterpart Clive Jones, the Liberal Democrat candidate for Wokingham in the forthcoming general election, who wanted Thames Water to be put into special administration. A similar measure was implemented for the electricity company bulb, which was considered to be too big to fail.
He said: “John Redwood, the architect of failed water privatisation, is calling for massive increases in household water bills.
“Thames Water was privatised in 1989 with zero debt, it’s now laden with £16 billion of debt and is facing serious financial challenges.
“For years the management of Thames Water have been more interested in paying massive dividends to shareholders – more than £7 billion has been paid in dividends over the last 30 years – rather than stopping sewage dumping into our rivers and streams and fixing leaking water pipes.
“Most of the shareholders of Thames Water are foreign investment funds, not UK householders.”
And Mr Jones was also critical of Thames Water for its policy of putting sewage into rivers and streams.
“In the last 24 hours (to Good Friday) there have been sewage discharges into the River Loddon for eight hours, the Ashridge stream for over 14 hours, the Emmbrook for 4.5 hours and the Barkham brook for 14 hours.
“The only way to stop this mis-management of Thames Water is to put Thames Water into special administration.
“Sir John’s failed experiment has to come to an end sooner rather than later.”
In the i newspaper, Michael Gove, the Levelling Up secretary, said Thames Water’s leadership had been a disgrace, and he had zero sympathy to its issues.
“(The issues are) because of serial mismanagement for which they must carry the can,” he said.
