UK PM Burnham plans law change to allow public ownership of water companies

By Reuters News

LIVERPOOL, England, Sept 29 (Reuters) - British Prime Minister Andy Burnham said on Tuesday he would legislate to repeal a ban on the public ownership of water companies, promising a ten-year route to "a very different water system" for the country.

Water suppliers in England and Wales were privatised in 1989, but multiple failures mean it has been seen as the sector where profit has been prioritised over the environment and affordable bills.

Burnham announced he would present a strengthened Water Bill to parliament which would allow greater public control of water companies in future.

"Water is a symbol of what has gone wrong with Britain. A service where the shareholders never lose and the public never win," he told the Labour Party conference.

Under his planned changes, mayors would have new powers to hold water companies to account.

The development will be closely watched by investors in Thames Water, which has 16 million customers and billions of pounds of debt. The UK's biggest supplier, it has faced mounting fines for polluting rivers with sewage.

The government and regulators are currently considering whether to approve a creditor-led rescue plan for the company.

Shares in Severn Trent, Pennon and United Utilities traded down by 0.9% to 1.6% after Burnham announced public ownership would become possible. There are 11 regional water and sewage companies in England and Wales.

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.