Committee publication · Correspondence · 10 April 2025
Correspondence from the Minister for Water and Flooding regarding Thames Water, dated 1 April 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
Minister Emma Hardy responds to the Environment, Food and Rural Affairs Committee's March 2025 inquiry about government involvement in Thames Water's court proceedings and contingency planning for special administration. The government states it was not requested to intervene in the restructuring case, that Thames Water's financial resilience is the company's responsibility, and that intervention would be a last resort. The minister emphasises preparedness for multiple scenarios and highlights water sector transformation initiatives.
Key findings
- Government did not engage in Thames Water court proceedings because neither the High Court nor Court of Appeal requested government submission or presence—Thames Water is a private company pursuing market-led solutions.
- Government declines to assess the merits of the recent Thames Water–creditor agreement, stating it is inappropriate to comment on commercial entities' financial management.
- Any taxpayer intervention through special administration would be a last resort; many costs would be recouped through company sale or rescue, minimising net taxpayer burden.
- Government confirms it is 'prepared for a number of scenarios' and works closely with Ofwat and other regulators on contingency planning, though specific details of such discussions are not disclosed.
- Government emphasises water sector transformation via the Water (Special Measures) Act, an independent regulatory review, and Ofwat's Price Review 2024, which allocates £104bn for sector upgrades 2025–2030.
Tone
ProceduralTopics
Key actors
Emma Hardy MP, Alistair (committee chair, recipient), Thames Water, Ofwat, Court of Appeal, Welsh Government
Notable line
“It would be unprecedented for Government to engage in this process.”
Key Quotes
“… neither the High Court nor the Court of Appeal requested a submission of evidence nor Government presence at any of the hearings regarding the company's restructuring plan”
“… it is the responsibility of the company to resolve its issue of financial resilience, and it is not for Government to tell a private company how to manage their finances.”
“… any intervention which would place increased pressure on the taxpayer will always be considered very seriously and only as a last resort”
“… many of these costs would be recouped through the sale or rescue of the company at the end of any Special Administration, minimising costs for the taxpayer”
“… we are prepared for a number of scenarios across our regulated industries as any responsible Government would be”
Source · parliament.uk record ↗