Water Companies: Licence Conditions

Lord Browne of Ladyton Excerpts

Wednesday 1st May 2024 Lords Chamber

[Lord Douglas-Miller (Con)]

The capital requirement will be considered at the next spending review, which is due this year, so we will hear more about that in due course.

[Lord Browne of Ladyton (Lab)]

My Lords, once again, your Lordships’ House is indebted to the forensic skills of my noble friend Lord Sikka. He is the one person in this House who needs no instruction about where to look for what is going on in businesses and in companies, and how important accounts are. With some assistance from him, I had a look at Thames Water’s accounts. Its accounts, directors’ reports and cash-flow statements say that it paid dividends to its parent company as follows: £37 million in 2022, £45 million in 2023, and another £37.5 million in September 2023. However, its own PR spin says that these are not dividends and that this is the way it is paying interest on its debt. That is not what the accounts are for, and the accounts are not right if that is correct. In December, a spokesperson for Ofwat said:

“Following notification that Thames Water has paid a dividend to shareholders, Ofwat is investigating whether this payment meets its licence requirements”.


The Minister is a knowledgeable man in this area, as he tells us, so he should be able to explain what is to be investigated. More importantly, does he know why Ofwat has not reported since December?

[Lord Douglas-Miller (Con)]

I also pay tribute to the accountancy skills of the noble Lord, Lord Sikka; they are very thorough. Indeed, the noble Lord, Lord Browne, has himself made an extremely good attempt at interpreting the accounts on that front. The issues around Thames Water and the dividend that it paid last year are subject to an investigation at the moment. Therefore, it would not be appropriate for me to comment on them.