Thames Water: Steve Reed must rule out sale to Chinese firm

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The Liberal Democrats have urged Environment Secretary Steve Reed to rule out the sale of Thames Water to Chinese firm CKI, if it enters special administration, and for any deal to receive parliamentary scrutiny before being agreed.

The party has pointed out that a “Conservative loophole” in legislation passed by the last government could allow the deal to go ahead without an automatic national security check.

Environment Spokesperson Tim Farron has warned that any sale of “such vital infrastructure” to a Chinese-owned firm would “show that the Government is fundamentally unserious about protecting infrastructure, and about improving our water system, rivers and seas after years of abuse”.

He also accused the Government of “shocking weakness” on its approach to China more widely, with plans for a new super embassy not being blocked by Angela Rayner, and the recent refusal to add China to the advanced tier of the Foreign Influence Registration Scheme.

Water is not currently classed as critical infrastructure under the National Security and Investment Act, passed by the previous Conservative government, meaning foreign takeovers can happen without automatically undergoing stringent national security checks before any sale is approved.

The Liberal Democrats are calling on the Government to block the sale of Thames Water to the Chinese firm, also pointing to concerns about the role of Chinese company Jingye in the recent collapse of British Steel.

Liberal Democrat Environment Spokesperson Tim Farron MP said:

“The Government is guilty of shocking weakness when it comes to China. First British Steel, then the super embassy, and now the sale of a big chunk of our critical water infrastructure. It’s time they took our critical national infrastructure more seriously.

“It is unthinkable that such vital infrastructure as our own water supply should be sold by the Government to a Chinese firm. Even considering such a move would show that the Government is fundamentally unserious about protecting infrastructure, and about improving our water system, rivers and seas after years of abuse.

“It’s equally shocking that the previous Conservative government left a gaping loophole in our national security legislation, allowing foreign takeovers of our critical water companies to go ahead without automatically going through stringent checks.

“Steve Reed must rule any sale to a Chinese firm out as a matter of urgency and any potential sale of Thames Water by the Government should be subject to proper parliamentary scrutiny.”

ENDS

Notes to Editor:

Reporting in The Times here.

Rules under the National Security and Investment Act, available here, state that:

“You are legally required to tell the government about certain acquisitions of qualifying entities in 17 sensitive areas of the economy subject to certain criteria. These are mandatory notification requirements, known as ‘notifiable acquisitions.’ You must get approval from the government before you complete the acquisition otherwise the acquisition will be void.”

The 17 sectors are the following - and do not include the water sector:

Advanced Materials; Advanced Robotics; Artificial Intelligence; Civil Nuclear; Communications; Computing Hardware; Critical Suppliers to Government; Cryptographic Authentication; Data Infrastructure; Defence; Energy; Military and Dual-Use; Quantum Technologies; Satellite and Space Technologies; Suppliers to the Emergency Services; Synthetic Biology; and Transport.