The renationalisation of Thames Water and increased state control over the water industry threaten to jeopardise the UK's ability to attract vital investment, warns a former Investment Minister. With a modest 1% growth forecast by the International Monetary Fund (IMF) this year, compared to 1.4% in 2025, securing investment is more crucial than ever.
Former Lord Johnson highlights his own success in attracting £91 billion of foreign investment over a single 12-month period, which created businesses and boosted trade. He contrasts this with the widespread public dissatisfaction with water companies, pointing out that the private sector has invested over £236 billion in England and Wales since privatisation in 1989 – more than double the annual investment seen during nationalisation.
Lord Johnson questions whether a renationalised industry could match or surpass this investment record, particularly given the perceived challenges in public service delivery. He also raises concerns about the impact on UK savers and pension funds, citing international inward investment's significant portion of water companies' share base, alongside billions in financing.
Many UK pension funds are heavily invested in the sector, with substantial losses potentially ensuing from any move to confiscate assets – an act of 'self-harm' to the country's financial stability. Lord Johnson's comments come as Andy Burnham advocates for public ownership and a "spectrum of intervention" ranging from regulation to outright control.
The Labour Party figure has explicitly stated his belief in an “overwhelming case for public ownership” of Thames Water, outlining a vision for greater public control. This contrasts with Lord Johnson's description of Burnham's pragmatic approach to attracting private capital for Manchester's regeneration.