Discretionary Share Option Schemes in the Privatised Utilities

Part of New clause 1 – in the House of Commons at 5:30 pm on 3rd April 1995.

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Photo of Stephen Timms Stephen Timms , Newham North East 5:30 pm, 3rd April 1995

May I give the hon. Gentleman the example of Thames Water? Last week, it was revealed that it had agreed with the regulator that it would invest £2.1 billion, and that it would set its prices according to that agreement. Now it has emerged that, in the next five years, it will invest only £1.75 billion; therefore, it is investing significantly less than had been agreed. Undoubtedly that is boosting the share price and share options, but it is leading to inadequate investment in Thames Water's infrastructure in its region. That is of particular concern to my constituents.

Thames Water is undertaking major sewer renovation work in my constituency in an extremely penny-pinching way, which is causing enormous difficulties for my constituents. The arrangement whereby Thames Water's objective boosts its share price, and therefore share options, is causing the problems.