Pathway to stronger public control of the water industry revealed
Water Bill to remove caps on government share ownership in water firms
The Prime Minister announced today (29 September) that the strengthened Water Bill will remove the current limits on government ownership of shares in the major water and sewerage companies in England.
Public interest should be at the heart of how our critical services operate. The Government intends to increase public control to deliver cleaner waters, fairer bills, stronger accountability and better outcomes for customers and the environment.
This change will remove a historic restriction on government share ownership, which does not exist in other sectors, so government can act where water companies let down customers and the environment.
Current limits set out in the Water Act 1989 on government ownership of shares in the major water and sewerage companies, and the associated restriction on government acquiring shares in those companies, will be removed. These limits vary between 1-3%, the exact limit varies by company and is below 3% in each case.
The change will apply in England.
The Government recognises that securing the long-term future of England’s water sector relies on continued private sector investment. Removing the cap does not change that. We will continue to work with investors, regulators and companies to secure the best outcomes for consumers and the environment.
This announcement gives the Government flexibility to consider a wide range of possible future interventions, including on ownership models, and provide support where it is needed. We are committed to delivering these reforms within the fiscal rules – which the Chancellor and Prime Minister have been clear will be met at Budget, with a buffer against uncertainty.
The Prime Minister also recognised that mayors and strategic authorities currently have far too little influence over companies’ priorities or mechanisms to hold them to account. New powers for local leaders will be developed as part of the Government’s reforms of the water sector.
Further details on the Government’s approach to the water industry will be set out in the 10-year plan for Britain, to be published later this year. This will set out plans for stronger public control over essentials like water, making them work for people and places again and will underpin the reform we will take forward through a strengthened Water Bill.