Thames Water will appoint a Labour peer to become its new chair if a rescue deal goes ahead, a group of its creditors has said, as the embattled utility fights to stave off nationalisation.
London & Valley Water, a consortium of investors and creditors to Thames Water which has submitted turnaround plans to keep the firm in private hands, has selected Lord John Hutton as the independent chair designate for a new proposed board if the plans go ahead.
Hutton was MP for Barrow and Furness from 1992 to 2010, during which time he served as work and pensions secretary under Blair and business secretary under Brown.
“People living in London and the Thames Valley have the right to expect the highest possible standards of customer service and proper environmental stewardship from their water company, and that will be our focus as we look to the future,” Lord Hutton said.
Burnham seeks ‘radical options’ for Thames Water
The move by London & Valley Water comes amid reports Andy Burnham is pushing for more “radical” options for the future of Thames Water amid a wider push to nationalise Britain’s utilities.
Prior to becoming prime minister, Burnham threw his support behind plans for the government to take full control of Thames Water – but since taking office has struggled to find a way to fund the billions of pounds needed for plans to go ahead.
Any takeover action would also risk a pricey and protracted legal battle with existing creditors, to whom billions in debt is owed.
Existing options on the table have included converting fines issued by regulators into equity stakes for the government.
But according to the Guardian, Burnham has instructed Whitehall policy officials to explore options that were not previously considered feasible, even if they would incur legal challenge or extra cost to the taxpayer.
Thames Water, which is sitting on a near-£20bn debt pile, warned in July it would run out of cash by the end of the year if a rescue deal was not finalised.
The struggling water firm – which serves around 16m customers, mostly in London and the South East – said in its latest financial report that it has £515m in cash, plus access to another £750 million in backup funding if needed.
But Thames Water confirmed this is only expected to last until some time in the fourth quarter of the year, meaning it will run out of liquidity by the end of 2026.
London & Valley Water, who wish to keep the utility in private hands, say Thames Water will require at least £10bn of new, committed private capital over the next few years and have submitted plans to recapitalise the business.
The consortium has set out an ambition to return the company to the public markets through a listing on the London Stock Exchange once the turnaround has taken effect.