A significant independent review of the water industry has been launched by the government, which continued to rule out a nationalisation of the sector.
Environment Secretary Steve Reed said nationalising water companies would cost up to £100 billion and “not resolve the problems” such as pollution and failing infrastructure.
He said the money for nationalisation "doesn’t exist" and argued that rivers and seas would be "filled with even more sewage and pollution" in the time taken to carry out the process.
Instead, last night the Department for Environment, Food and Rural Affairs (Defra) launched an commission chaired by former Bank of England deputy governor Jon Cunliffe to "help shape new legislation to reform the water sector".
The review could see the scrapping of the role of water regulator Ofwat, according to the BBC.
Reed said the commission has been launched "to attract the investment we need to clean up our waterways and rebuild our broken water infrastructure".
This is the third stage of the government’s water strategy, with Reed having struck an agreement with water companies and Ofwat to ringfence some money for vital infrastructure upgrades so it cannot be diverted to shareholder payouts and bonus payments, as well as introducing the Water Bill to parliament that includes stricter regulations for failing water companies, including criminal charges for persistent lawbreakers, tougher personal liability for executives, new powers for regulators to ban bonuses and real-time sewage monitoring.
Earlier this week, leaked stories indicated that water firms will be allowed by Ofwat to hike bills more than 21% over the coming five years in order to pay for improvements to the network.
Reed has ruled out nationalisation of the water companies, saying private sector investment will be needed to improve infrastructure.
Shares in listed water companies Severn Trent PLC (LSE:SVT), United Utilities Group PLC and Pennon Group PLC were little moved on Wednesday morning after Defra's announcement overnight.
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