The Daily Telegraph - Saturday
Thumbs up Argentina’s president Javier Milei met Elon Musk in a Texas Tesla factory. He backed Mr Musk in a dispute with a Brazilian judge in a dispute over X, formerly Twitter. Hunt warns Thames Water bill rises would be ‘outrageous’
JEREMY HUNT has said that it would be “utterly outrageous” for Ofwat to grant Thames Water’s demands for higher household bills as it faces potential insolvency.
The Chancellor said shareholders in the embattled utility company had “an obligation to sort out the mess”, when asked whether they had a duty to inject more cash into the business.
Speaking at a public meeting in his South West Surrey constituency, alongside the head of watchdog Ofwat and the boss of Thames Water, Mr Hunt said: “I just want to say on behalf of my constituency, it would be utterly outrageous and totally unfair if we were made to pick up the tab for poor management and financial engineering by Thames Water shareholders.”
Mr Hunt’s comments come as the Government faces increasing pressure to intervene to support Thames Water after its parent company, Kemble, failed to make an interest payment on a £400m loan last week.
The utility is locked in a stand-off with regulators and the Government after insisting that without a 40pc increase in bills, plans for salvaging the company are “uninvestable”. Thames Water provides water and sewage services to 16m households – about a quarter of the UK population.
David Black, the chief executive of Ofwat, pledged yesterday that customers would not be required to pick up the bill for Thames Water’s management failures, but did not rule out an increase in household bills.
Speaking to The Telegraph on the sidelines of the meeting, Mr Hunt said: “My constituents do not have an obligation to bail out Thames Water shareholders for their poor decisions and we got a clear commitment from Ofwat tonight that won’t happen.
“I think Thames Water needs to behave in a responsible way and sort out this problem. I think they have an obligation to sort out the mess.”
Thames Water risks being put into temporary administration, a form of nationalisation, if it is unable to pay its debts, forcing taxpayers to foot the bill.
Chris Weston, the chief executive of Thames Water, insisted he was focused on salvaging the business. He said: “There are lots of things going on and moving. I am absolutely talking to Ofwat about my business case.”
Thames Water has said it has enough money to stay afloat for 15 months, meaning its collapse may become a problem for a potential incoming Labour government.
The water company, which has paid out billions of pounds in dividends, has struggled to cope with soaring interest payments on its debt.
More than half of its debts are indexlinked, leaving it vulnerable to interest rates rising to a 16-year high in the past year. Its credit rating has been downgraded closer to junk status by ratings agencies Moodys, S&P and Fitch.
It has also been blighted by fines, with the Environment Agency charging it penalties of almost £36m between 2017 and 2023 for releasing untreated sewage into rivers. Thames has pointed out that it still has £2.4bn of liquidity.
The boss of Thames Water faced questions from angry constituents yesterday after thousands of homes in the Godalming and Guildford areas were left without water following a storm.
Chancellor says the utility giant has ‘an obligation to sort out the mess’ and not pass costs to households