Nationalise Thames Water and block private rescue deal, MPs tell Burnham

Members of parliament (MPs) are urging Prime Minister Andy Burnham to nationalise Thames Water and block a proposed private rescue deal. The London & Valley Water (L&VW) consortium, comprised of creditors, is seeking to seize control of the company in a £10 billion rescue deal. However, MPs argue that this plan does not prioritize the public's best interests and more closely resembles "joy riding in the family car" for those behind the deal.

Alistair Carmichael, chair of the Environment, Food and Rural Affairs (EFRA) committee, stated that Thames Water's 16 million customers have lost faith in the current management. The committee recommends the government pursue a special administration regime, which would appoint officials and Ofwat, the water regulator, to manage the company before it runs out of capital. This move aims to prevent the "doom loop" that has led to increased customer bills and further financial strain.

Thames Water has been grappling with a debt of over £20 billion and is expected to run out of capital by the end of the year. The creditors, including Apollo and Elliott Asset Management, have rejected the initial rescue plan, arguing it does not adequately protect customers and the environment. The L&VW consortium has committed to paying no dividends until 2035, writing off billions in debt, and reinvesting profits to upgrade the UK's water network and clean up local rivers.

They also pledged to pay all fines and offer the government a share in the business without incurring any cost to taxpayers.

Burnham had previously advocated for a 10-year renationalisation plan to put the public interest first, but the government has remained silent on the matter. Defra has stated that all options, including nationalisation, remain under review.