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The revelation that ministers are considering bringing Thames Water into temporary public ownership has reopened the fierce debate over the privatisation of the country’s water industry.

The sudden resignation of the company’s chief executive and Sky’s exclusive report into government contingency plans for the firm’s potential collapse comes amid growing calls for change following a string of controversies and scandals to hit the sector in recent years.

‘Vast improvement’

The current system of private monopolies dates back to 1989 when Conservative prime minister Margaret Thatcher sold off the publicly-owned water and sewage industry in England and Wales for £7.6bn.

She vowed it would lead to a new era of investment, improve water quality and help bring down bills. Her government also wrote off all debts and established Ofwat to regulate the industry.

Supporters argue that the water industry is now significantly better, while also acknowledging improvements are still needed.

Water UK, the industry body which represents firms, said on the 30th anniversary of privatisation in 2019 that the situation had “vastly improved” with a fall in supply problems, pollution, and leaks thanks to nearly £160bn worth of investment over the decades.

It also claimed that “average bills today are broadly the same as 20 years ago, once inflation is taken into account”.

However this is disputed.

Thames Water

‘The most egregious rip off’

Opponents say privatisation has led to soaring bills, poor performance and years of under-investment, and claim that the pay of executives and shareholders has been prioritised at the expense of long-suffering customers.

They also point to a National Audit Office study in 2015 which found that average household bills had risen 40% above inflation since 1989.

Water firms have also accrued £54bn in debt since privatisation – but paid out dividends to shareholders of £66bn, according to an analysis by The Guardian newspaper last year, with 20% of bills going towards servicing debt or paying out dividends on average.

Those calling for renationalisation include Labour’s former shadow chancellor John McDonnell, who responded to Sky’s latest report on Thames Water by describing it on Twitter as “the most egregious rip off” of all the firms.

Regulator row

Meanwhile regulator Ofwat has also been accused of lacking the necessary teeth to take on water companies.

Critics include the Liberal Democrats, who have called for the body to be abolished and “replaced with a tough new independent regulator with real powers”.

The government has vowed to increase penalties, with Environment Secretary Therese Coffey proposing earlier his year measures including unlimited fines for firms caught polluting.

Public opinion

Most of the public support renationalisation of the water industry, according to opinion polls.

YouGov found in September 2022 that 63% of the public believed it should be run “entirely in the public sector”.

Even among Conservative voters the idea is popular, with 58% in favour, according to the same survey of more than 1,700 adults.

However there appears to be little appetite for such a move from the government, while Labour has backtracked on supporting the policy.

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A huge sewage spill caught on camera in Cornwall

Scandals

For or against privatisation, public dissatisfaction at water firms remains following a string of scandals and controversies.

Water UK confirmed earlier this year that bills would see the biggest increase in almost 20 years from April.

The 7.5% hike means average customers are now paying £31 more annually this year – taking the typical bill to £448.

The industry body then made an an unprecedent public apology following mounting fury over raw sewage being released into Britain’s waters.

Figures from the Environment Agency revealed it was pumped into England’s rivers and seas at least 301,091 times last year – an average of 824 a day.

Water UK said campaigners had been “right to be upset about the current quality of our rivers and beaches”.

But there was then further anger when firms admitted a planned £10bn investment in measures to tackle the issue would be funded by a “modest increase” in customers’ bills.

Water leaks have become another major issue – especially at a time of shortages and record high temperatures.

South East Water, which this week introduced a hosepipe ban for two million people in Kent and Sussex, has enraged customers over supply issues.

Residents in East Sussex said they had been left without water for 23 days despite the firm admitting that its reservoirs were topped up and said its infrastructure had struggled to cope with demand.

Meanwhile another firm, Welsh Water, admitted earlier this year that it been under-reporting the amount of leakages it was responsible for.

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Ruth Kelly apologises on behalf of Water UK for sewage in rivers

Multi-million pound profits and eye-watering pay packets for firms have further fuelled discontent.

Thames Water reported pre-tax profits of £493.5m in the six months to September 2022, despite the firm introducing a hosepipe ban for its 15 million customers during the year.

In 2021 the firm paid out £11m compensation after it was caught overcharging customers.

Read more:
Ministers weigh contingency plan for collapse of Thames Water
Thames Water boss resigns with immediate effect

The boss of the company who resigned, Sarah Bentley, was reportedly set to receive pay and perks worth £1.6m this year.

It came after Ms Bentley said earlier this year how she was “heartbroken” about the company’s historical failings – while admitting there had been “decades of underinvestment”.

Sky News understands that talks over the future of Thames Water remain at a preliminary stage and the contingency plans may not need to be activated.

Either way, the pressure and scrutiny on such firms is unlikely to go away any time soon.

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Lucy Powell named Labour’s new deputy leader

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Lucy Powell named Labour's new deputy leader

Former Commons leader Lucy Powell has been crowned Labour’s new deputy leader in a closely fought race against Education Secretary Bridget Phillipson.

Ms Powell received 87,407 votes to Ms Phillipson’s 73,536 – a majority of 13,871 – in a contest that was widely perceived as a referendum on Sir Keir Starmer’s popularity with the membership.

Ms Powell was seen as the “anti-Starmer” candidate given she was sacked from cabinet just last month, and centred her campaign on being an independent voice for the backbenches.

Politics live: Follow for updates as Labour names new deputy leader

Ms Phillipson was seen as Number 10’s preferred option, and she had pitched herself as the “unity candidate”, warning that voting for her opponent would result in “internal debate and divisions that leads us back to opposition”.

However speaking to Sky News’s political editor Beth Rigby following the result, Ms Powell insisted she would be a “friend” to the prime minister, adding: “I am confident we can work well together.”

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She said she was not here to “write an alternative policy platform” but rather “to make sure Labour values and beliefs are right at the heart of the conversation, and that we’re giving a really clear sense of who we’re for”.

Ms Powell’s earlier victory speech made clear where she thought Labour was going wrong, and what she would challenge the government on.

The Manchester Central MP said Labour “won’t win by trying to out-Reform Reform, but by building a broad progressive consensus”.

She said that started with “wrestling back the political megaphone” from Reform leader Nigel Farage, and “setting the agenda more strongly”.

“Let’s be honest, we’ve let Farage and his ilk run away with it. He wants to blame immigration for all the country’s problems. We reject that,” she said.

“Our diagnosis is different, that for too long the country and the economy has worked in the interests of the few, not the many.”

The reference to “for the many not the few” – the slogan during Jeremy Corbyn’s time at the helm, was not lost on his then shadow chancellor John McDonnell.

The veteran left-winger said on X: “The Labour Party members have spoken & the message is clear, they want change. It’s good to see a return to references to the Labour Party serving once more the many not the few & that Labour must not try out Reform, Reform. Our members realise a new start is desperately needed.”

‘Unwanted deputy imposed on PM’

The deputy leadership role is important as it’s the key connection between the Labour members and the upper echelons of the Labour Party.

The race was triggered by the sudden departure of Angela Rayner, after she admitted to underpaying stamp duty.

The scandal sparked a reshuffle in which Ms Powell was one of the only casualties. It makes the new partnership potentially very awkward for Sir Keir, especially as his new deputy will be free to speak out against his policies from the back benches rather than being bound by collective responsibility like Ms Phillipson.

However in a possible olive branch, Sky News understands Ms Powell will be asked to attend political cabinet meetings, even though she will not officially be a member of cabinet.

Tory chairman Kevin Hollinrake said “weak Keir Starmer” has had an unwanted deputy leader “imposed on him by the Labour Party”, adding: “The failure of the Keir Starmer candidate, Bridget Philipson, is another defeat of the prime minister’s authority.”

Turnout for the vote was low – just 16.6%, suggesting a lack of enthusiasm among party members and its affiliates.

Sir Keir congratulated Ms Powell after the results were announced, saying she “has always been a proud defender of Labour values, and that is exactly what we need at this moment”.

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PM: Powell is ‘a proud defender of Labour values’

He echoed some of her language around immigration, as he attacked the Tories for this week suggesting they supported a policy to deport people who have settled in the UK legally, something Reform UK has advocated.

“That is what we’re up against on the right of politics, a politics of division and grievance that wants to take this great country to a very dark place”, Sir Keir said.

PM warns of ‘battle for the soul of our nation’

The prime minister is under pressure as the party plummets in the polls, with many MPs on the left predicting he could be gone by May if the local elections go badly.

Sir Keir acknowledged Labour is having a difficult time after it lost the Caerphilly by-election to Plaid Cymru on Thursday.

He said it was a “bad result” and “a reminder that people need to look out their window and see change and renewal in their community, opportunities for their children, public services rebuilt, the cost of living crisis tackled”.

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Phillipson ‘disappointed to lose’

“We must unite. We must keep our focus on what is, in my view, the defining battle for the soul of our nation. I know that Lucy will do just that,” he said.

Saturday’s result is the culmination of a six week contest, with the pair having had to secure nominations from 80 MPs in the first round and then win the backing of 5% of local parties or Labour affiliated groups before making it to the final vote.

Initially six candidates entered, but it quickly became a two-horse race as only Ms Powell and Ms Phillipson reached the 80 threshold, following claims from the left of a “stitch up”.

Ms Phillipson said she was “disappointed to lose” but Ms Powell “has my full support”.

She added: “What we all need to do now is unite this party, beat Reform and secure that second term Labour government.”

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How many prisoners are released by mistake? Here are the stats as search for migrant sex offender continues

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How many prisoners are released by mistake?  Here are the stats as search for migrant sex offender continues

The manhunt for a migrant who sexually assaulted a schoolgirl, and was released from prison in error, is ongoing.

Hadush Gerberslasie Kebatu was jailed for 12 months earlier this year after he sexually assaulted a 14-year-old girl and a woman in Epping.

He had been staying in the Bell Hotel in Epping and his arrest triggered large-scale protests and disorder.

The Ethiopian national, who came to the UK on a small boat in the summer, is now being searched for by the police after he was accidentally freed on Friday.

Follow the latest updates on the manhunt

Hadush Kebatu, jailed for two sexual assaults in Epping. Pic: Essex Police / PA
Image:
Hadush Kebatu, jailed for two sexual assaults in Epping. Pic: Essex Police / PA

How many prisoners are released in error?

According to government statistics published in July, 262 prisoners were released in error in the 12 months to March 2025 – a 128% increase from 115 the previous year.

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The report states: “Of the 262 releases in error, 233 of these releases in error occurred from prison establishments, while 29 were released in error at the courts.

“Releases in error from establishments could also be a result of errors by the court.”

This is out of a total prison population across England and Wales of roughly 86,000.

Sky News has contacted the HM Prison & Probation Service to know how many of the 262 prisoners have since been found and returned to custody.

In September 2024, Sky News reported how dozens of people released from jail under the government’s emergency prison scheme were freed by mistake.

The Labour government said it was forced to release hundreds of inmates early because prisons were at capacity.

William Fernandez. Pic: PA
Image:
William Fernandez. Pic: PA

Kebatu, who is thought to be in the London area, was due to be deported when he was mistakenly released from HMP Chelmsford on Friday.

Previous high-profile manhunts

William Fernandez, who was awaiting trial for sexual assault, was released from HMP Wormwood by error in March 2021. He then went on to rape a 16-year-old girl and sexually assault a young woman.

Joseph McCann. Pic: Police handout
Image:
Joseph McCann. Pic: Police handout

In December 2019, the prisons and probation service “apologised unreservedly” after serial rapist Joseph McCann was freed to commit a series of sex attacks on women and children.

In July 2017, an inmate who was released from prison just months into a nine-year sentence due to a “clerical error” was arrested after weeks on the run.

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Murder investigation launched after teenager stabbed in south west London

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Murder investigation launched after teenager stabbed in south west London

A murder investigation has been launched after a 19-year-old was stabbed in south west London, earlier this week.

Police and the London Ambulance Service were called to the scene on Lavender Hill, close to Clapham Junction, on Tuesday afternoon following reports of a stabbing.

Rinneau Perrineau, 19 and who was known as Ren by his family and friends, was treated at the scene for stab wounds.

He was taken to hospital in a critical condition but died on Friday. One arrest has been made, the Metropolitan Police said.

In a statement, Rinneau’s family said: “Ren was loved by many, he was always around his family. He will be dearly missed.”

Read more from Sky News:
How many prisoners are released by mistake?
UK makes world’s biggest-ever seizure of fake weight loss jabs

‘An irrevocable loss’

Acting Borough Commander Amanda Mawhinney, who leads policing in the area, said: “Our thoughts are with the victim’s loved ones at this terrible time.

“This was a shocking crime committed in broad daylight. A teenager’s life was taken, and his family and friends have suffered an irrevocable loss.

“Our officers are making every effort to bring those responsible to justice. Residents may notice a police presence around the scene of the crime, as patrols have been stepped up in the local area.”

Officers are urging anyone who was in Beauchamp Road on Tuesday afternoon between 3:20 and 3:30 to call 101.

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