Crisis-hit Thames Water was branded “contemptible” and accused in Parliament of “telling lies to the British public” in a dividends row.
The scathing assessment was made at Westminster by Lord Cryer, a former Labour MP for London, as peers discussed a collapsed deal to rescue the debt-laden utility.
Britain’s biggest water supplier, which has 16 million customers, chose US private equity giant KKR at the end of March to be its preferred bidder under plans to invest around £4 billion of new equity to help keep the financially stricken company afloat.
But Thames Water said this week KKR was now not “in a position to proceed”.
The firm said the decision was “disappointing” but added it was instead taking forward talks with “certain senior creditors” on an alternative plan to recapitalise the business.
Meanwhile, the Government has said public ownership is “not the answer” and warned such a move would divert money away from other public services such as the NHS.
Ministers have stressed that water supplies in London are not under threat.
But Londoners have faced soaring bills from Thames Water.
Thames Water is about £19 billion in debt and faced going bust earlier this year before it secured a £3 billion loan deal designed to keep it running into 2026.
Lord Cryer, who was MP for Leyton and Wanstead, said: “I was a London MP for 22 years, and I can say with some conviction that Thames Water was one of the worst and most contemptible organisations I have ever dealt with - and that is up against some pretty stiff competition.
“Can we scotch this myth that has been put out by Thames Water for years that it has not been paying dividends?
“It has been paying what are, in effect, dividends to the parent company.
“Technically they may not be dividends but, in effect, they are. When Thames Water makes these claims, we should call it out for what it is doing: telling lies to the British public.”
Environment minister Baroness Hayman of Ullock said: “It is really important that we have clarity and honesty from our water companies, because there are so many problems.
“If we are genuinely going to sort this out, we need to have a proper understanding, and there should not be little tricks and ways of paying money - whether through dividends or otherwise - that circumvent what we would consider to be best behaviour.”
A Thames Water spokesperson said: “Thames Water openly and transparently reports on all dividends declared and settled in its annual report.”
