Lord Cromwell:

Moved by Lord Cromwell

2: Clause 1, page 2, line 3, at end insert—“(d) requiring a relevant undertaker to report not less than annually to the Authority on actual or planned financial structuring or restructuring of the undertaker, including debt levels, commercial strategy and any associated risks, including to the long-term sustainability of the undertaking.”Member’s explanatory statementThe amendment requires that financial engineering becomes a regular focus area for timely reporting in order to assist in regulators’ understanding and alert them in good time to risks or distortions in a water company.

I very much appreciate the Minister’s comments, but as she will expect, I am unable to agree. She said that Ofwat is closely monitoring water company finances. Well, we are nearing panto season and all I can say is, “Oh no it isn’t!” I have had numerous meetings with Ofwat in committee and frankly, I do not think it even really understood them. What is required by this amendment is a potentially very short report that simply outlines what financial restructuring has happened and what new debt has been taken on. It is a modest but vital amendment to make transparent the financial engineering and prevent the shenanigans of the past. I therefore wish to test the opinion of the House.

Ayes 279, Noes 136.

Amendment 2 agreed.