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Labour urges mutualised water cooperatives to avoid debt from Thames Water
The plan aims to give public control through not-for-profit entities run locally, while testing it first with Thames Water, which is nearing collapse and in talks over a potential creditor rescue deal.
Labour politicians are pressing the UK prime minister to consider turning failing water firms into not-for-profit cooperatives, a proposal they say could deliver public control without pushing additional debt onto the government balance sheet, according to the Guardian Business.
The outlet says Labour leader Andy Burnham has raised concern about how nationalising water companies could increase government debt, a risk he believes could show up in Treasury projections.
Labour MPs and regional mayors argue a mutualised structure, where local people run transformed not-for-profit water entities, could reduce that debt exposure while still addressing accountability as companies have faced criticism for pollution, rising bills, and weak infrastructure investment.
The Guardian Business reports that the proposal is linked to a Good Growth Foundation report and that Labour plans to test the model first with Thames Water, which is described as close to financial collapse. It says Thames Water is in discussions about a potential rescue deal that would allow it to be relieved of fines and environmental obligations, with a fallback that would place it under temporary government control through a special administration regime if talks fail. The report recommends tougher regulation across the sector, including enhanced monitoring, tighter limits on executive pay, and a dividend ban unless a company meets specified conditions.