Andy Burnham has cautioned that his administration would “find it very difficult to reverse” the privatisation of water companies that occurred in 1989, nearly four decades ago.
Speaking in the Commons for the first time since becoming Prime Minister, Mr Burnham pledged to secure “stronger public control” over key “essentials”, such as water.
He stated that sewage discharges had “damaged” UK tourism, while insufficient reservoir capacity had “disrupted” water supplies for billpayers.
The Prime Minister informed MPs that ministers are currently assessing “all possible solutions for the water industry”.
Provisional Met Office figures indicate this summer was the UK’s hottest since records began in 1884, with drought declared across most of England and all of Wales.
Environment Agency data shows hosepipe bans now restrict water use for around 30 million people in England, with average reservoir storage below 60% and nine reservoirs reporting exceptionally low levels.
On Tuesday, the Environment Agency had advised against bathing in several seaside towns, with pollution risk warnings at places such as Wells-next-the-Sea in Norfolk, Pelham Beach at Hastings, East Sussex, Weston-super-Mare in North Somerset, and Blackpool in Lancashire.
“Too many areas have seen water supplies disrupted this summer due to a lack of reservoir capacity,” Mr Burnham said.
“Our tourism industry is damaged by too many sewage spills.”
He added: “Later in the year, our 10-year plan for Britain will set out plans for stronger public control over these essentials, making them work for people and places again.”
The Prime Minister had earlier warned that “from the 1980s, this country took a series of wrong turns – political power was centralised, economic power privatised, the country deindustrialised”.
He also said: “Britain’s water industry stands as a leaking monument to that approach – a country run in the private rather than public interest – and that is now abundantly clear to voters of all parties, including the party opposite.
“The Government I lead will be relentless in giving people and places what they were promised 10 years ago, ownership and control, and from that control over their destiny comes change and growth.”
During Sir Keir Starmer’s premiership, which came to an end earlier this year, the Department for Environment, Food and Rural Affairs estimated that nationalising the water industry would cost around £100 billion.
The Independent Water Commission, chaired by former deputy governor of the Bank of England Sir Jon Cunliffe, was established in late 2024 to look at potential water sector reforms.
Sir Jon made 88 recommendations in his final report, published last year, among them that the Government should set up an “integrated regulator” for the sector, combining the roles of Ofwat, the Drinking Water Inspectorate, the Environment Agency and Natural England.
Alison Griffiths, the Conservative MP for Bognor Regis and Littlehampton, asked whether Mr Burnham would “promise to enact all 88 of Sir Jon Cunliffe’s recommendations without delay”.
She said “governance and regulation” appeared to be the “key to better performance, not some ill-defined version of ‘better public control’”.
The Prime Minister replied: “I appreciate the Cunliffe Report takes us forward but it was, to some degree, limited in what it was able to consider.
“And I believe we need to look at all possible solutions for the water industry.
“I don’t think we’re in a position where we can say what is being proposed will solve everything.
“It’s a very regrettable situation that the privatisation of water has left us in a position where we’re going to find it very difficult to reverse.
“What has happened is funding has left through salaries and dividends.
“Bills were kept low for a period of time but it was the infrastructure that is suffering.
“And when it comes to the point now when we’re needing to put those infrastructure problems right, it’s the billpayers who are being asked to pay 20%-plus on their bills, not those who siphoned the money out in the first place.
“It’s an unsatisfactory situation.
“It’s an industry where the shareholders never lose and the billpayers never win.”
