Thames Water has never been closer to nationalisation

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Thames Water is creeping closer to nationalisation after environment secretary Emma Reynolds criticised a rescue deal drawn up by its creditors. The proposal would have written off half of Thames Water’s existing £20bn debt while adding another £6bn and injecting £3.4bn of equity, in return for more lenient fines for sewage spills. It would have also cost the utility £750m in legal and banking fees. Reynolds said the package was bad for the environment and customers. Thames Water’s owners spent years paying themselves dividends, despite the risk of insolvency, while its creditors lent it money at high interest rates and then sold the debt to others. Keir Starmer has been reluctant to nationalise it despite pressure from his backbenchers. But Andy Burnham has injected fresh energy into the debate by saying public ownership would “absolutely be an option” under his leadership.