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Tuesday, 13 August 2013 00:00

Thames Water should stick it

If rubber-toothed "watchdog" Ofwat had an ounce of gumption it would tell Thames Water to stick its supplementary £29 rates demand where the sun doesn't shine.

This Australian-owned franchise paid no corporation tax last year, despite revenues totalling £1.8 billion, because its cute accountants loaded Thames with "intercompany" loans bearing huge interest repayments of £328.2 million in the past year alone.

Thames has already, with Ofwat blessing, bashed its 14 million customers with a 6.7 per cent inflation-busting rates rise.

The company, controlled by the Macquarie banking group, bleats that it has had "a tough time financially as a company because of increased costs."

Welcome to our world, its customers may well reply, because there won't have been many Thames Water users enjoying a 6.7 per cent pay rise recently.

In fact the company's insensitivity in holding out the begging bowl when official statistics indicate average hourly pay rates for workers in Britain plunging 5.5 per cent in the last three years is breathtaking.

This tax-dodging transnational corporation still managed to hand over £231.4m in dividends to its parent company - slightly down but scarcely evidence of hardship.

Still less so is the decision to reward chief executive Martin Baggs with two bonuses - an annual windfall of £274,000 and a "long-term incentive" of £366,000 - on top of his £450,000 salary.

This follows last year's annual bonus of £418,359 added to his £425,000 salary and a sackful of shares to incentivise the poor chap.

He clearly deserves such generosity in light of presiding over a 50 per cent increase in sewer flooding incidents - he blames the weather - and increased loss of water through leaks, estimated at 646 million litres of water a day.

Self-evidently Baggs has no problem paying his water rates, although many Thames customers do, which explains why £16 of the planned £29 surcharge is to meet bad debts.

In other words, those water users who pay their bills must pay more to make up for those who don't on the grounds that Thames can't carry this loss.

The company is spending £273 million on land necessary for the construction of the Thames Tideway Tunnel.

But a company spokesperson gave the game away by explaining that it had to buy the land now because it would be dearer in future, confirming that its property portfolio will be enhanced by the inexorable rise of land prices in the London region.

In common with other water companies, Thames sold off land acquired at privatisation to the benefit of its shareholders and has closed over two dozen reservoirs, many for profitable development.

Thames has paid over £5bn in dividends since privatisation, straight out of the pockets of its customers.

Not only should Ofwat tell it where to get off but this latest outrageous demand should spur greater public rejection of the private monopoly in water that is robbing most people in Britain.

Not in Scotland, where water was never privatised and Scottish Water has imposed a 2.8 per cent rates rise after a four-year freeze.

Nor in Wales, where not-for-profit Dwr Cymru has maintained its record for the past three years of setting the lowest increase, at 1.7 per cent, in England and Wales.

Once again facts show that public is best. But where are the politicians who will challenge the scandal of water privatisation by demanding its return to collective ownership?

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