Water legitimacy issues surfaced on 19th October in Parliament as part of a Public Bill Committee discussion on corporate interest restrictions in the Finance Bill.
While much of the debate focused on PFI arrangements, shadow Treasury minister Anneliese Dodds fleshed out detail on the proposed amendment 28, which requests a review about the rationale for having special provisions for public infrastructure-providing companies. Dodds said: “That is in the light of some quite worrying developments occurring around large swathes of British public infrastructure now being owned by firms and in effect provided through debt finance.”
She continued: “One example we touched on in some Finance Bill debates is Thames Water…Back in 2006 Macquarie bank purchased Thames Water. It did sell it off—after a number of problems, if we are honest—but during that period our water infrastructure was owned by a firm that was in effect debt-financed, and through the Cayman Islands, which is a separate issue. There are genuine questions about whether that model is appropriate. Does it cause additional potential risks to service quality and continuity? What would happen if that debt financing model could not be serviced by one of these firms?”
Dodds added: “There needs to be much more muscular engagement in questions around profit shifting between jurisdictions and especially between those that have low or no-tax regimes, where there appears to be a lot of evidence of harmful tax practices.”