'Hold your nerve': Yorkshire MP's message to Andy Burnham on public control of water

Andy Burnham promised greater public control over water and other utilities, such as energy, before entering Downing Street.

A veteran Labour MP has urged Andy Burnham to act quickly and take control of firms like Yorkshire Water, amid reports he has shelved plans to Thames Water in special administration.

Jon Trickett, the left wing MP for Normanton and Hemsworth, urged the new Prime Minister to “hold his nerve”.

Mr Burnham promised greater public control over water and other utilities, such as energy, before entering Downing Street.

Earlier this week, he told ITV News: “We do need to make some changes - I have heard people loud and clear their frustrations about water, energy being too expensive.

“There’s things I want to fix. It is better to focus on those things rather than getting trapped into another round of politics.”

Mr Burnham made clear he wanted to put Thames Water into a special administrative regime (SAR), which grants the Government additional powers if a company is at risk of insolvency.

The consortium – including UK and US investment companies such as Elliott Management, Aberdeen Investments and American private capital firm Apollo Global Management – last month said they were looking at offering a “golden share” to the Government as part of a revised rescue deal.

A rescue plan by creditors is seen as the final realistic option to avoid Thames Water being placed into a special administration regime after a previous rescue deal with US private equity giant KKR collapsed in May last year.

Creditors – who collectively own about £17bn of Thames Water’s debt mountain of over £20bn – have already been sent back to the drawing board after former environment secretary Emma Reynolds warned in June she did not believe their £10 billion plan for Thames Water went far enough to protect customers or the environment.

However, The Times has reported that Mr Burnham has pushed back a potential SAR over fears of mounting costs and legal challenges.

Following the reports, Mr Trickett said: “Privatisation of water has been a disaster. It’s a natural monopoly.

“Worse still, management has proved to be less than competent.

"Andy Burnham must hold his nerve and bring Yorkshire Water and all the other privatised water companies back into public ownership."

Yorkshire Water’s debt surpassed £7.5bn in its latest accounts, putting it right on the edge of Ofwat’s recommended debt gearing ratio of around 70 per cent.

However, this is still far below Thames’ mammoth debt mountain of £20bn.

Yorkshire Water chief executive Nicola Shaw told this paper that she was interested in some of Mr Burnham’s ideas around greater public control.

She said while Thames was an “extreme case”, there is scope for different approaches elsewhere in the country - based in part on Mr Burnham’s template for working with United Utilities in Greater Manchester.

Ms Shaw told The Yorkshire Post: “Nationalisation, it is pretty clear, doesn’t make a lot of difference.

“If you look at the Welsh or Scottish businesses, they are owned in very different ways to English businesses and the outcomes are pretty similar. I don’t think that is a key defining feature.

“Control is interesting. In Manchester, the way the city council and combined authority was working with United Utilities was very much in partnership focusing on the goals they wanted to work on together. If we can do that in Yorkshire, that will be really effective for us.”