Thames Water paid £1m-plus to company spooks agency part-owned by Starmer adviser

[ad_1] A company intelligence firm part-owned and previously run by the prime minister’s enterprise adviser has been paid greater than £1m by Thames Water because the utilities agency tries to keep away from renationalisation, the Guardian can reveal.

Hakluyt, which was run by Varun Chandra till his appointment as Keir Starmer’s enterprise adviser final July, has labored with Thames since 2023, offering political and strategic recommendation.

That industrial relationship between Thames and Hakluyt has continued since Chandra joined No 10. He's now tasked with discovering a non-public sector resolution for Thames and stopping Britain’s largest and most troubled water firm from collapsing into state possession.

That presents a possible battle of curiosity, because the 40-year-old nonetheless owns a multimillion-pound stake in Hakluyt and is entitled to obtain dividends from the Mayfair firm. A No 10 supply mentioned Chandra had no private involvement with Thames when at Hakluyt and made all of the related declarations as a part of his appointment.

Within the spring Chandra intervened in last-ditch talks to influence the US personal fairness group KKR to purchase Thames Water, together with chatting with KKR’s co-founder Henry Kravis.

A number of politically related Hakluyt workers have additionally been advising Thames, together with a former speechwriter to the chancellor, Rachel Reeves, and Rishi Sunak’s former deputy chief of workers.

The revelation underlines Hakluyt’s attain, in addition to the revolving door between enterprise and politics. The corporate, which was based by former MI6 officers, claims to have suggested virtually half of the FTSE 100 and greater than three-quarters of the highest 20 personal fairness teams.

It's understood that Hakluyt has been working intently with Thames’s technique director, Cathryn Ross, a former chief government of the water regulator Ofwat, since 2023. Sources mentioned Hakluyt had been paid greater than £1m by Thames in that point.

Keir Starmer with Varun Chandra (far left) throughout an funding roundtable dialogue with BlackRock CEO Larry Fink (backside proper) at No 10 in November 2024. {Photograph}: Frank Augstein/AFP/Getty Photos It was employed to work on Venture Samuel, Thames’s try and safe personal sector capital to recapitalise and restructure, in addition to contingency planning for the likelihood that the utilities firm has to enter the federal government’s particular administration regime (SAR) – a type of non permanent nationalisation.

Hakluyt workers together with Sunak’s former deputy chief of workers Will Tanner and Josh Platt, a former personal secretary and speechwriter to chancellors Rachel Reeves and Jeremy Hunt, have labored on Thames in latest months, Westminster sources mentioned.

Sir Oliver Robbins, the Overseas Workplace everlasting undersecretary and former Brexit negotiator, additionally labored on Thames in 2023 whereas he was employed at Hakluyt as head of company protection for Europe, the Center East and Africa.

Hakluyt is amongst a string of advisers which were paid handsomely to advise Thames in recent times. The Guardian revealed that the water firm spent not less than £136m on the trouble to safe emergency funding through the monetary yr to March 2025, together with with the legislation corporations Linklaters and Akin Gump.

The Treasury is determined to keep away from Thames collapsing into state arms, and Reeves wrote to collectors of the corporate in July to say a “market-based resolution” was her choice.

Thames has argued that permitting it to enter SAR and imposing heavy losses on its lenders would have a chilling impact on the urge for food for UK infrastructure, and drive up wider funding prices.

Chandra’s efforts to persuade KKR to purchase Thames had been futile because the personal fairness group walked away in June, blaming extreme threat and politicisation.

That left solely a rescue try by its lenders standing between Thames being renationalised.

A disparate band of greater than 100 collectors are attempting to persuade the federal government and Ofwat that they need to be allowed to take over the corporate, which serves greater than 16 million clients in London and the Thames valley and has money owed of greater than £20bn. In return they need leniency from fines and penalties. They've additionally proposed delivering fewer enhancements to Thames’s drained water and sewerage community over the subsequent 5 years than had been agreed with Ofwat – however charging clients the identical.

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Thames has argued that permitting it to enter a particular administration regime and imposing heavy losses on its lenders would have a chilling impact on funding in UK infrastructure. {Photograph}: Neil Corridor/EPA Chandra is one in every of Starmer’s most influential advisers, and has spearheaded its makes an attempt to ingratiate Labour with enterprise and appeal to overseas capital to the UK.

He accompanied Reeves on her go to to the World Financial Discussion board in January, and was within the Oval Workplace when Starmer met Donald Trump in February.

Chandra has additionally been central to Labour’s extra muscular makes an attempt to burnish its enterprise credentials. It's understood he was behind the federal government’s resolution to oust the chair of the Competitors and Markets Authority, Marcus Bokkerink, amid issues the watchdog was holding again progress.

The son of Indian immigrants who grew up in South Shields, Chandra helped Tony Blair arrange his first advisory agency, earlier than changing into Hakluyt’s managing associate in 2019. As of Might he held Hakluyt shares price about £7m. The corporate, which was based in 1995, was named after the Elizabethan author, priest and diplomat Richard Hakluyt.

Hakluyt has reportedly mentioned it plans to purchase again Chandra’s shares over time and that he not has any voting rights or decision-making roles inside the firm.

A spokesperson for the corporate mentioned: “Hakluyt is a worldwide strategic advisory agency offering perception and recommendation to industrial shoppers on a variety of points. We're not a lobbying organisation and don't foyer governments on behalf of shoppers.”

A Thames spokesperson mentioned: “We stay centered on a market-led resolution which we consider is in the most effective curiosity of shoppers, UK taxpayers and the broader economic system.”

A No 10 spokesperson mentioned: “The Cupboard Workplace has an intensive course of on declarations of curiosity for particular advisers to make sure any conflicts of curiosity are correctly managed and mitigated, together with by means of recusals the place applicable.”

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