Mark Carney, the former Governor of the Bank of England, has raised concerns about the potential nationalisation of Thames Water, warning that such a move could undermine foreign investment in the United Kingdom. Canadian officials, representing significant investors in the UK including major pension funds and banks, have expressed apprehension over plans by Prime Minister Andy Burnham to exert greater public control over the utility.

Burnham, who has pledged to reverse decades of privatisation under Margaret Thatcher's governments and reduce what he terms “neo-liberalism,” has suggested a shift toward increased state involvement in struggling sectors such as water. However, the specifics of this "public control" remain unclear, causing uncertainty among private creditors and foreign investors.

Canada’s investment footprint in the UK spans critical infrastructure sectors, including airports, ports, energy, utilities, and real estate, with its so-called Maple Eight pension funds and banking institutions committing tens of billions of pounds. Royal Bank of Canada (RBC), a significant creditor to Thames Water and part of a consortium backing a £16 billion rescue plan, is among those apprehensive about the government’s intentions. The proposed package would involve writing off approximately one-third of Thames Water’s borrowing in exchange for ownership stakes.

Industry insiders indicate that RBC’s concerns are representative of wider creditor sentiment, which fears a potential government seizure of the company could result in substantial losses without adequate compensation. Discussions over the future of Thames Water reportedly took place in recent weeks, including a meeting between Carney and Burnham during a visit to Liverpool.

Despite efforts to clarify the government's strategy, officials from Ofwat—the water regulator—and ministers have not endorsed the creditor-backed rescue plan. Burnham's repeated but imprecise statements about “public control” have stirred anxiety in financial circles, prompting Canadian officials to seek assurances that any intervention would respect investors’ rights and provide fair value, whether through nationalisation or restructuring.

The ongoing uncertainty presents a threat to securing further financial support for Thames Water, which has already received £3 billion from creditors over the past 18 months and currently faces requests for an additional £2.4 billion in liquidity.

Earlier this month, RBC Chief Executive Dave McKay warned that moves toward nationalisation and proposed tax increases under the Labour government risk signaling a hostile environment for private and international capital investment. McKay cautioned that such policies could discourage economic growth by appearing focused on extracting value rather than fostering development.

Representatives from RBC, the creditor group, and the Canadian High Commission declined to comment on the matter. The situation remains fluid as negotiations continue over the future management and ownership structure of one of the UK’s largest water suppliers.