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Roula Khalaf, editor of FT, chooses her favorite story in this weekly newsletter.
The writer is a member of Witney and a member of the Business and Trade Committee
Historically, the UK is considered a good place for investors because we had an international reputation for reasonable, effective rules, which would keep their investment. They could be comforted by both the rules and the regulators, which could be trusted to ensure they were supported.
But the previous government has shown increasing disrespecting and rules for regulators and, disturbing, it seems that the current government is now following in its footsteps.
Recently, they got permission to intervene and talk about public interest, at the court hearing where the proposed debt restructuring plan was considered to be a debt of Thames Water. But the regulator, ofwat (and the government on this issue), are completely absent from the formal procedure.
The conditions of this emergency loan are extraordinary: £ 900 million of the first £ 1.4 billion new debt will be released at the eye high interest rates and advisory fees. In other words, less than half of the amount the company wants to borrow will be available to ensure any repair of our water and sewer system that is so desperately needed.
Without the court who allowed me to speak for them, the interests of Thames Water’s 16 million customers would be completely unbearable – although ultimately will be those who have based a huge account because they are the only source of revenue for the company. Customers already see that their water bills are increasing by more than 35 percent, and Thames Water believes they should continue to go more.
Still, ofwat did not choose that he did not appear in court, nor called Temses Water on his terrible financially poor management. Instead, he has overlooked a company license repeatedly. For example, Thames Water is obliged to have two credit investments ratings. There are no one right now. S&P now ranks the debt of the company 12 commas below the investment class and Moody’s nine.
The frightening and illegal record of Thames Water is well known. However, he did not draw attention to their records on the illegal delay of the sewer-the small army of citizens scientists who tested the waterways in their local area and the cleaning campaign.
Now ofwat somehow managed to overlook what it represents in that ultimate control Thames Water, a key term in his work license. He refused to admit that lenders are now the ultimate controllers – they now have a “material influence” to this – although it has been discussed in court.
Ministers look hesitant even expressing an opinion, rather rely on the findings Sir Jon Cunliffe’s research In the water industry, it is expanding, which will only be published in June. They should not sit on the fence: the theme should be performed under the Government’s special administration regime as a temporary measure.
Its privatization in 1989 was not designed in such a way that it encouraged the true market or competition – it is really difficult to have an effective competition where there is only one pipe net and there is no explanation for more. Because of this, the heavy regulation is so important.
But the Government seems to be confused by measures that are useful in ensuring healthy competition with those who are provided to support growth support.
Take the Competition and Market Administration – the organization itself accused of ensuring honorable and healthy competition – where the former Amazon UK manager was set up as a temporary chairman. Ministers say this is sending a message for growth. For me, the message is sent is that the monopolists can now rest.
As for the financial behavior body, the city regulator response to the Robust Testing of Shein Clothing, before being investors in London, shows that he does not do what investors require. At the very least, the FCA must ensure that the necessary detection is made, in this case in connection with the risks of forced labor in supply chains.
Here’s the point: implementing robust rules holds low prices, stimulates innovation, stimulates growth and protects both consumers and investors. For our beaches and waterways, which have suffered a decade of neglect and even intentional damage by water companies, the regulation was ineffective and failed at all these points.
The government promised to ensure the greatest permanent growth of the G7. Obviously not on the road. But encouraging the regulator to be slow and weak will not help to tempt investment in the UK. Instead, the government must give them proper teeth – and encourage them to use them to ensure free, fair and open markets.
