Thames Water boss ‘untroubled’ by prison threat – and says he can save company
The chief executive of Thames Water has insisted he can rescue the debt-laden utility, which faces running out of cash in months if it cannot raise fresh equity.
Speaking after the environment secretary announced new legislation threatening water company bosses with jail alongside a review of the industry, Mr Weston told Sky News he was untroubled by the threat of prosecution, and confident he can turn around the troubled company.
“I need to digest what the secretary of state said today, I am completely aligned with what he’s trying to do in cleaning up the rivers,” he said.
“I’m focused, like he is, on getting investment and I will work with the secretary of state to do that. I am very encouraged by the tone I heard and I will work with him to try to do what he’s outlined to do.”
Asked directly if he could save Thames Water, he said: “I can save it.”
With around £18bn of debt and cash reserves only until next May, Mr Weston is racing to raise fresh investment after existing shareholders withdrew plans for £3.5bn of fresh equity.
Pic: Reuters
Last week the company asked regulator Ofwat to allow it to increase customer bills by more than 50% in exchange for investment of more than £20bn. Previously Ofwat capped future Thames bill increases at 21%.
If Mr Weston fails to raise fresh capital or persuade bondholders to take a loss, Thames Water may fall into special administration, effectively nationalisation, leaving taxpayers liable until it can be sold to new owners.
The current shareholders have written off their investment.
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Water company bosses could face prison time in new crackdown
Water companies face customer anger over dividends and bonuses
Thames Water is the most extreme example of the challenge facing the privatised water companies, under acute pressure to reduce sewage outflows and modernise infrastructure using private investment, while limiting bill increases.
They face huge customer anger at the scale of dividends and bonuses paid to shareholders and executives in the three decades since privatisation, payments they argue are necessary to maintain a privatised system.
As well as new legislation giving Ofwat and the Environment Agency enhanced powers, Environment Secretary Steve Reed announced a review of the entire industry that will begin in the autumn.
Water industry figures welcomed the move, believing it would give them the opportunity to make the case that investors require a more generous return than they are currently allowed to offer by Ofwat.
‘We all want the same thing’
In the audience to hear him set out his plans were some of the bosses Mr Reed said have paid themselves £41m since 2021 in bonuses and incentives, including Mr Weston and Liv Garfield, chief executive of Severn Trent, the highest-paid water executive.
Susan Davy, chief executive of Pennon Group, which owns South West Water, told Sky News: “We all just want the same thing and we’re going to focus on making sure we deliver for communities.”
Asked if she was concerned about the threat of prosecution she said: “I’m just going to focus on what’s best for communities and customers.”
Nick Read is to end his torrid tenure as chief executive of the Post Office as he prepares to give evidence to the inquiry into the Horizon IT scandal.
Sky News has learnt that Mr Read, who took over five years ago, has decided to resign from the government-owned company.
He initially stepped back temporarily from the post to focus on his evidence to the inquiry into the IT debacle that affected hundreds of sub-postmasters.
In a statement confirming his departure after Sky News reported that it was imminent, Mr Read said: “It has been a great privilege to work with colleagues and Postmasters during the past five years in what has been an extraordinarily challenging time for the business and for Postmasters.
“There remains much to be done for this great UK institution but the journey to reset the relationship with Postmasters is well underway and our work to support justice and redress for Postmasters will continue.”
Mr Read had been criticised for his leadership of the Post Office for some time, having been accused of being fixated with his pay package by its former chairman, Henry Staunton.
Mr Staunton was sacked earlier this year by the then business secretary, Kemi Badenoch.
Nigel Railton, a former Camelot executive, was installed as Mr Staunton’s successor.
Keep up with all the latest news from the UK and around the world by following Sky News
Under his leadership, Mr Read had raised the idea of handing partial ownership to Post Office workers, although little progress has been made on such a scheme because of the company’s financial travails.
Mr Read will leave the Post Office next March, and his duties will be assumed while he focuses on the Horizon inquiry by Neil Brocklehurst, the company’s interim chief operating officer.
The outgoing chief executive will be paid during his notice period but will not receive any additional payoff, according to a government source.
A spokesperson for the Department for Business and Trade declined to comment.
Business
No change in CPI inflation ahead of interest rate decision – but another measure ticks unexpectedly up
There’s been no change in the rate of price rises, official inflation figures showed.
The rate of inflation stood at 2.2% in August, the Office for National Statistics said, the same as a month earlier.
The announcement comes the day before interest rate setters at the Bank of England decide on the cost of borrowing, controlled through the interest rate.
Markets are expecting only a 26% chance of an interest rate cut.
Rises behind the headline figure
But another measure of inflation ticked unexpectedly up. Core inflation rose to 3.6%, even higher than economists had forecast.
Bank officials closely watch core inflation as it gives a reading on price rises without elements like food and energy, which are prone to rise and fall quickly.
A rise in core inflation to 3.5% had been anticipated.
An increase was also seen in services inflation, which rose from 5.2% in July to 5.6% in August. This measure encompasses the culture and hospitality sectors.
Why?
The main item acting to bring up inflation was airfares to European destinations, which showed a large rise during the months, following a fall a year ago, the ONS said.
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Lower restaurant and hotel costs, and a cheaper price for refilling a tank of petrol or diesel, was a balance against the air far rise, as was slightly cheaper shop-bought alcohol.
Cheaper oil prices also meant the cost of raw materials was down, which meant the cost of goods leaving factories slowed.
Keep up with all the latest news from the UK and around the world by following Sky News
Responding to the figures chief secretary to the Treasury, Darren Jones, said: “Years of sky-high inflation have taken their toll, and prices are still much higher than four years ago.
“So, while more manageable inflation is welcome, we know that millions of families across Britain are struggling, which is why we are determined to fix the foundations of our economy so we can rebuild Britain and make every part of the country better off.”
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