Corbyns Inertia

A strange thing about water companies is that they give money out in profits to shareholders while still borrowing.
That doesn't make sense to me, particularly as it goes through tax havens.
Perhaps an expert in finance can explain it.

That's all on www.weownit.org.uk jura, but people can't be bothered to find out.
They'd rather just stick together in their little clans and complain about people like us telling them like it is.

Come on, Annie, why is it okay for wonderful Welsh Water to be a not for profit company, but not the English water companies?

Who owns what?

Transport

Last month Germany's Deutsche Bahn bought the train and bus company Arriva for £1.5bn, swallowing Britain's third-largest operator to create Europe's biggest transport group. Deutsche Bahn is 100 per cent owned by the German state.

BAA, which owns six British airports including Heathrow, was sold to Ferrovial, the Spanish building company, in 2006. And when BAA sold Gatwick last year, it went to Global Infrastructure Partners, a fund including a South Korean pension fund among its main investors.

Energy

The nuclear power station operator British Energy was sold to EDF for £12.5bn in 2008, and the French company has plans for a further four nuclear reactors in line with government targets to increase capacity and cut carbon emissions. Centrica, which owns British Gas, subsequently took a 20 per cent stake in the nuclear group.

The German giant E.ON, the world's largest listed power company, bought into the UK market when it took over Powergen in 2001. In 2002, npower was sold to the Germany utilities group RWE. And in 2006, Scottish Power was taken over by Spain's Iberdrola.

Communications

Five, owned by the pan-European broadcaster RTL, is the only major broadcast company that is not British-owned. But the mobile telephony sector is thoroughly international. Former BT mobile arm Cellnet became O2 and was sold to Spain's Telefonica. 3 belongs to Hutchison Whampoa, a vast conglomerate based in Hong Kong. Orange was owned by France Telecom, and T-Mobile was owned by Deutsche Telekom. This week the two UK subsidiaries merged to form "Everything, Everywhere", held 50/50 by the French and German parent companies.

Water

Germany's RWE sold Thames Water, Britain's largest water company, to Macquarie, the Australian bank, for £8bn in 2006. At the time, Macquarie also owned South East Water, but it was sold on to Australia's Hastings Funds Management when Macquarie bought Thames. South East then merged with Mid Kent Water in 2007, and the new group is owned by Hastings Diversified Utilities Fund and the Utilities Trust of Australia.

Water companies also attract interest from private equity. The infrastructure arm of 3i has a 10 per cent share of Anglian Water Group as well as a junior debt position in Thames Water.

www.dwrcymru.com/en/Media-Centre/Fast-Facts.aspx

"While water in England is privatised, Scottish Water is publicly owned and is the most trusted utility company in the UK. Not for profit Welsh Water helps low income households to pay their bills."

Why can't English water companies be the same?

Most countries with any sense realised a long time ago that privatising essential utilities and selling them to those who can hold you over a barrel for access to them- especially those who later turn out to be your 'enemies' is a VERY irresponsible thing to do. Most of our essential utilites are owned by EU members, and other unstable or very manipulative countries, like the US. They can't even organise health services for their own citizens, and we are prepared to sell them the NHS and downgrade our workers' protection and environmental protection as we are sooo desperate for deals.

15th October 2017
JEREMY Corbyn “ethical” T-shirts selling for £19 are made by Indian workers earning 55p an hour.

They would have to graft for a week before they could afford to buy one of the tops hailing the Labour leader who slams cheap labour.

Oh dear, how embarrassing

Jalima @ 11.18 brilliant!

Corbyn merchandise
I just googled and it is not a joke - there is such stuff!
Made ethically, I hope, and all profits to go to deserving charities, I presume.

Niggly, i learn much from Primrose ?

The big cheese of Dwr Cymru -Welsh Water- cares with a passion for the environment , when he first moved to our area we had the contract to renovate an old farm house he had bought, this was over twenty years ago, at times drove me mad, everything had to be environmental friendly , kitchen wood and marble, whitewashed walls.

Our beaches are so much cleaner , so if he has a good income I don't care, he is giving back to Wales

Bucks Fizz!
I just had a nice cup of coffee plonked on my desk (very welcome too).

Corbyn merchandise? Has he become like a celeb or pop star?
Just how much was that fur coat he wore and did he buy it or borrow it? And could it have kept a homeless person warm instead?

niggly It's a very boring subject and not at all Christmassy so thank you for your kind words.

I am rather hoping that Corbyn fans take a stand against Capitalism this Christmas and buy lots of Corbyn merchandise from the Momentum shop.

A bucks fizz has just appeared on my desk as if by magic! I may be gone for some time and any posts between now and Boxing Day may not make any sense at all!

Primrose, you clearly know what you are talking about which makes what you say interesting. but my goodness both you and annie deserve a medal in your dogged attempts to convey this information!!

weownit.org.uk/privatisation-fails

Sarcasm flows from the far left here Jen.

Wales has benefited from water privatisation, our beaches are so much cleaner which gives Wales publicity in places to visit the cleanest beaches , brings in tourists which we need .

They use the Channel Islands as examples, all of which are also tax havens.

Good to know your socialist credentials are still important to you, Annie.
That was sarcasm, by the way, just in case you don't recognise it.

Do you not think that water should be owned by the people, rather than companies that have accounts in tax havens?

Primrose , thank heaven you bring balance to these discussions

Jen, this is not a tax haven story. You're using links to stories that are years old and really not newsworthy.

"But if the loans are issued as quoted Eurobonds on a “recognised” stock exchange, such as the Channel Islands or the Cayman Islands"

The important words here are 'recognised stock exchange'.
They use tax havens as examples to make you think this is somehow a tax haven story but it is not.
There are plenty of recognised stock exchanges. The govt publishes long lists of them.
Instead of the Cayman Islands, they could have used examples such as any EU stock exchange. But no one would be interested if they read 'such as Paris or Frankfurt or Ireland or Luxembourg'. They would think 'so what?' They can issue quoted Eurobonds. The withholding tax would operate in the same way.

These companies are not 'exploiting tax havens'.

utilityweek.co.uk/water-firms-accused-of-exploiting-tax-havens/

This shows how they do/did it.

As water bills rise again, an investigation by Corporate Watch into the finances of the 19 water and sewerage companies in England and Wales has found:

– Almost one third of the money spent on water bills goes to banks and investors as interest and dividends.

– People are paying £2 billion more a year – or around £80 per household – than they would be if the water and sewerage supply was publicly financed.

– Six companies are avoiding millions in tax by routing profits through tax havens, using a regulatory loophole the government has chosen to keep open.

– The CEOs of the 19 water companies were paid almost £10m in salaries and other bonuses in 2012.

This was from Corporatewatch in 2013.

corporatewatch.org/the-severn-trent-takeover-corporate-profiteering-tax-avoidance-and-britains-water-supply/

The Cayman Islands are well-known British tax havens, stop trying to kid yourself, Primrose.
Why not have the business take place in the US?
Or China?
Why should it be in US dollars when the contract is between the UK and China?

I have no idea when the structure was set up, but I'd imagine there would have been benefits at the time to using debt capital markets in different parts of the world. It's not about avoiding tax at all - they may have got a lower interest rate on their bonds for example or wanted to raise money in dollars instead of sterling (or euros).
If you're buying a load of water pipe components from China and the bill is in US Dollars, for example, it's easier to raise the debt in dollars, then you're not exposed to any foreign exchange movements and you don't have to hedge the contract value.

I'd imagine it's a bit of a hassle to set up that structure in the first place for UK water companies.
Any idea why they would do it, if not to escape tax?

I noticed that two water companies have decided to close their funds in the Cayman Islands. What were they doing, having funds in tax havens?
Not funds, subsidiary companies for bond issuance. I'd imagine it's a bit of a hassle to unwind that sort of structure. What's important is whether those companies are wholly registered in the UK for tax purposes.