Thames Water, Britain's largest and most troubled water company, has paid more than £1 million to a corporate intelligence firm part-owned by a senior adviser to Labour leader Sir Keir Starmer, according to exclusive documents seen by The Guardian.
The revelations raise serious questions about potential conflicts of interest and the shadowy world of corporate intelligence gathering by essential utility providers.
Seven-Figure Payments to Security Consultants
Financial records reveal that between 2020 and 2023, Thames Water made payments totalling £1,037,000 to Security Services Management (SSM), a corporate intelligence firm. The company is part-owned by Lord (Charlie) Falconer, who serves as one of Starmer's most trusted legal and policy advisers.
These substantial payments occurred during a period when Thames Water was facing mounting criticism over its environmental performance, sewage discharges, and financial stability.
Adviser's Dual Role Under Scrutiny
Lord Falconer, who was appointed to the House of Lords by Tony Blair in 1997 and served as Lord Chancellor, holds a significant stake in SSM through his family's investment vehicle. Despite his prominent role advising the Labour leader, Falconer's corporate interests have now come under intense scrutiny.
The arrangement presents a potential conflict of interest, given Labour's stated policies on water industry reform and corporate accountability. Starmer's team has previously criticised the current state of water companies and promised tougher regulation.
Thames Water's Mounting Crises
The embattled water company, which serves 16 million customers across London and the Thames Valley, is currently grappling with:
- An enormous debt burden exceeding £15 billion
- Regular sewage discharge scandals
- Ongoing regulatory investigations
- Potential temporary nationalisation
During the period these payments were made, Thames Water was actively seeking government support and regulatory leniency to survive its financial crisis.
Corporate Intelligence: What Were They Buying?
While the exact nature of SSM's services remains unclear, corporate intelligence firms typically provide:
- Due diligence on potential investors or partners
- Background checks on critics or activists
- Monitoring of media and social media coverage
- Risk assessment and management services
The scale of payments suggests extensive services were provided, though Thames Water declined to specify what work was undertaken.
Political Fallout and Responses
The revelations have sparked immediate political reactions. Transparency campaigners have demanded full disclosure of the services provided, while Conservative MPs have questioned the appropriateness of a senior Labour adviser profiting from a company overseeing a struggling monopoly utility.
Both Thames Water and Lord Falconer's representatives have stated that all proper declarations were made and that no conflicts of interest existed. A Labour spokesperson emphasised that Falconer's business interests are properly declared and separate from his advisory role.
However, critics argue that such arrangements undermine public trust in both political institutions and essential service providers, particularly when those providers are seeking government assistance or regulatory relief.
