In recent months, the Labour government in the United Kingdom has rolled out the red carpet for investment, taking steps to improve regulatory certainty and bring in private capital for new megaprojects. The government is right to worry about the UK’s ability to attract private investment, however. Overshadowing all of Labour’s efforts is the ongoing meltdown of Thames Water and the broader UK water industry. Things will likely get worse before they get better in the sector, and Labour is currently showing little interest in reforming Ofwat’s regulation of the industry. Prospective investors are right to worry about regulatory risk in the UK.
Of all of the moves Labour is making to attract investment, the most promising is the efforts of the Cunliffe Commission (officially titled the Independent Water Commission, led by Sir Jon Cunliffe), which was created to investigate potential comprehensive reforms to the regulation of the UK water sector. The commission was created last October, and in February kicked off a broad Call for Evidence to collect input from stakeholders as an initial step in its investigation. The Call for Evidence will remain open until April 23.
