The UK government is proposing changes to the special administration regime (SAR) for vital public services like water, aiming to protect taxpayers if a major firm goes bankrupt and requires a bailout. The new rules could allow for increased water bills to cover potential government losses.
Campaigners say the new plans will do nothing to solve the problem, claiming the public will continue to 'subsidise dividends and expensive debt'
The Government has said water bills could increase amid growing concerns over the stability of debt-laden Thames Water Separately, the Environment Secretary has also said tens of billions of pounds of private finance is guaranteed to be spent over the next five years to build new sewage overflows and reservoirs, and to carry out major pipe upgrades.
If the entire sum needed to be recouped by the Government, it could see an additional £200 added to consumers’ bills across the country over five years. The water company is still in discussions with Ofwat over a potential fine for paying out dividends to shareholders despite its poor performance, as well as a proposed £104m fine for failing to manage or invest in sewage treatment plants.In a blog post from the Government department, it said: “This is not the case.
Environment Secretary Steve Reed said nationalisation would ‘cost billions of pounds and take years to unpick the current ownership model’ The Prime Minister has already ruled out the idea of nationalising debt-laden water companies which go bust. Introducing the Water Bill to Parliament earlier this month, Mr Reed said: “We need to reform the entire water system,” but he rejected nationalisation as the way forward.
“Clamping down on bosses’ bonuses makes for good headlines but the impact is irrelevant. Shareholders are still running the show and taking their cut.” She said: “The company’s shareholders already say it’s worth nothing and the creditors would expect a ‘haircut’ – in other words, the people who got us into this mess wouldn’t get their money back, or not all of it.
Boycott Thames Water, a campaign group planning a water bill boycott to take place in October, is also in favour of nationalisation.
Water Companies Thames Water Government Bailout Water Bills Special Administration Regime
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