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Jeremy Hunt has condemned Thames Water’s plea for increased household bills in the face of potential insolvency as “utterly outrageous.”
Amidst growing concerns over the utility company’s financial woes, the Chancellor emphasized shareholders’ responsibility to rectify the situation rather than burdening consumers.
Addressing constituents at a public meeting in his South West Surrey constituency, Hunt expressed strong opposition to the notion of households bearing the brunt of poor management and financial missteps by Thames Water shareholders. He asserted, “It would be utterly outrageous and totally unfair if we were made to pick up the tab.”
Hunt addressing constituents at a public meeting in his South West Surrey constituency
Hunt’s remarks come amidst mounting pressure on the Government to intervene as Thames Water’s parent company, Kemble, missed an interest payment on a £400 million loan. With the utility giant serving 16 million households across the UK, concerns over potential insolvency have escalated.
David Black, CEO of Ofwat, assured on Friday that customers would not be held accountable for Thames Water’s management failures, although he did not rule out the possibility of increased bills.
Speaking on the sidelines, Hunt reiterated his stance, emphasizing that constituents should not be obligated to bail out shareholders for their poor decisions. He stressed the importance of Thames Water taking responsibility and resolving the crisis internally.
Chris Weston, Thames Water’s CEO, echoed a commitment to salvaging the business amid ongoing discussions with Ofwat regarding the company’s financial outlook.
The water company’s challenges are multifaceted, with soaring interest payments, credit rating downgrades, and hefty fines from the Environment Agency for environmental violations. Thames Water’s liquidity, while substantial at £2.4 billion, faces depletion due to mounting debt finance costs and impending fines.
The recent water outage in the Godalming and Guildford areas following Storm Ciarán prompted further scrutiny, with constituents expressing frustration over the lack of access to water and inadequate compensation for affected parties.
Jane Austin, local councillor for the most affected ward Bramley and Wonersh, told Mr Weston: “We have water anxiety where we live.”
Hunt’s condemnation underscores the urgency for Thames Water to address its financial predicament responsibly, sparing consumers from bearing the burden of its failures.
