UK Parliament / Open data

Water Industry (Financial Assistance) Bill

Briefly, I too welcome our constructive debate over the past few weeks and the Minister's helpful response. I have two things to say. First, I want to flag up the important point, made by a Labour Front Bencher but supported by Members across the House, that as we do big infrastructure projects we absolutely have a general interest to ensure that they maximise the development and use of our home-grown talents and skills—I do not say that in a racist way; I mean those people who live in this country, who have skills to contribute and who are here—so that for generations to come, one generation's learning, whether in engineering, building or all the rest, can be carried on. If the Thames tunnel goes ahead, either in its currently proposed form or as a variation on it, I hope that from the beginning we build in such a plan that, as it were, sweeps in the work force and the training with it. If we do that, it will command much more public confidence as well us giving us continuing skills and opportunities for the future. My hon. Friend the Member for Cities of London and Westminster (Mark Field), who is not in his place at the moment, was fully engaged in the earlier debate about the financing of major projects and asked me about the five-year cost-profit ratio figures for Thames Water. I could not answer him at that point, but I have since had the figures checked, and I will put them on the record. In the year ending 2007, the cost-profit figure after tax for Thames Water's activities was £234 million and the dividend paid was £594 million. That represented an excess of £360 million in dividend payments over income—exceptional, unusual and clearly not good precedent as normal practice. In the following two years, there was a much more normal pattern, with £382 million of cost-profit and £105 million of dividends, and therefore a net retention of profits of £276 million. In 2009, there was £285 million of cost-profit and £226 million of dividends paid out, thus retaining a sum of £58 million. In the past two years, the picture has slipped back to something much less healthy. In the year ending 2010, there was £237 million of cost-profit, after taxation, on activities, with dividends paid out of £295 million, and therefore £57 million more paid out than money retained. In the last financial year for which we have figures, cost-profit was £247 million and dividends paid out were £262 million, with therefore a net excess payout of £14 million. I hope that those figures are accurate, as I am reliably informed that they are. They make the general point that when the Government are being asked to support private sector activity and private sector companies, we should ensure—whatever those companies' relationships with each other in a collection of companies—that they have had disciplined financial activity that does not result in taxpayers, council tax payers or ratepayers being asked to foot bills that should be met by the companies themselves but are not being met because they have paid off the money elsewhere to shareholders who walk away with the profits. When they come to the table in future to say that they want joint enterprises, supported by Government, for major infrastructure projects, whether they be tunnels, roads, bridges, schools, hospitals or whatever else, we need to make sure that there has been ethical and appropriate financial accounting. My plea is that we should learn these lessons across the regulatory activities and across public finance to ensure that the Treasury is not put into a difficult position. I hope that Thames Water and the other water companies all over the UK hear this message loud and clear: ““We are watching you, and as a Parliament and, I hope, a Government we will be very insistent that there is good value for the taxpayer, council tax payer and water rate payer, and that you do not take out money from projects that should be there for investment but pay your full and proper share.””
Type
Proceeding contribution
Reference
542 c338-9 
Session
2010-12
Chamber / Committee
House of Commons chamber
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