Thames Water is reviewing its business structure after controversy over its use of offshore subsidiary companies to reduce its tax burden, according to the Guardian.
The water company has appointed Ian Marchant, formerly of SSE, as chairman with a mission to close its Cayman Islands subsidiary companies. Thames Water has not paid corporation tax in the UK for the last 10 years, but the company maintains that the offshore companies do not provide any tax benefits. Instead, it is claimed the Cayman subsidiaries are used to raise funds through bonds for an infrastructure investment programme.
Thames Water is formed from a structure of nine companies. The firm says subsidiaries “have always been fully registered in the UK for tax purposes but no longer serve their original purpose of enabling smoother access to global bond markets.”
The company says it has not been liable to pay corporation tax for the last decade due to deferments associated with its capital investment in schemes such as a £4.2bn sewer which travels for 15 miles beneath the Thames.
Nonetheless, the company has admitted that its offshore structure “just looks wrong”. Critics have pointed out that the company has paid £1.2bn in dividends in the last decade. Thames Water also faced a £20.3m fine in March 2017 for large-scale leaks of sewage into the Thames and nearby land.
Following privatisation in 1989, Thames Water was sold to a consortium led by Macquarie, an Australian investment bank. The bank sold its final holding in the company in 2017, leaving the company with £10.75bn in debt financing. The biggest shareholder of the company is now Omers, a Canadian pension fund.
There was a decrease in the number of shoppers visiting high streets, shopping centres and out of town retail parks across the UK in the three months to July, according to a report released today by the British Retail Consortium (BRC).
Unusually wet weather, combined with people being short of money, resulted in footfall for May, June and July declining by 2.3% compared with the same period last year. This is down from a 2.0% fall in the previous quarter.
Footfall was down in all types of locations, but the most dramatic drop was seen on the high street, with a 5.5% decrease compared with out-of-town down 1.2% and shopping centres down 0.4%, the BRC/Springboard Footfall and Vacancies Monitor for May to July 2012 revealed.
Diane Wehrle, research director at Springboard, noted that the gap between the high street and other shopping venues has widened since the same quarter in 2011, partly due to the wet weather. In addition out of town retail locations have shown more resilience because they are more convenient to access by car and provide cheaper car parking.
Apart from the boost from Christmas in December, high street footfall has now been down for 18 months, driven by jobs fears and falling disposable incomes, according to BRC director general Stephen Robertson.
There was little sign of a general Jubilee bounce and retailers will be hoping that the Olympic Games had a more positive impact, Robertson added.
The report also showed a marginal increase in the national town centre vacancy rate in the UK. This figure, which includes high streets and shopping centres, stood at 11.4% in July 2012, up from 11.2% in July 2011. The highest vacancy rates were recorded in Northern Ireland (18.5%), Wales (15.3%) and the North & Yorkshire (13.0%).
Retail sales in the UK were were dampened by the wettest April on record, according to a report released today by the British Retail Consortium (BRC).
The latest BRC-KPMG Retail Sales Monitor reveals that like-for-like sales fell 3.3% compared with April 2011, when sales rose 5.2% on a year earlier.
Comparisons for this time of the year are always affected by the timing of Easter. The BRC noted that this April’s comparison is with a very strong April 2011, which included all four days of Easter compared with only two in April 2010. In 2012 Easter was in early April, which meant that some Easter shopping was shifted into March.
Last April was also boosted by the Royal Wedding and the associated extra public holiday for people to shop or celebrate. Retailers are hoping that a 2012 feel-good factor will soon emerge in connection with this summer’s events, which include the Queen’s Diamond Jubilee, the London Olympic Games and the Euro 2012 football championships.
April’s heavy downpours and cold weather meant that consumers had little interest in summer fashions and outdoor products. Food retailers fared better, although the average shopping basket reflected the weather conditions, with shoppers choosing hot drinks, porridge, joints of meat and soups.
Meanwhile online sales of non-food items (including mail-order and phone sales) showed the weakest growth since November 2011, rising by 9.0% year-on-year against a relatively strong April 2011.
KPMG’s head of retail, Helen Dickinson, said that retail sales are expected to improve in May, but the overall health of the retail sector remains on a downward trajectory as people’s desire to consume “ever increasing volumes of goods” diminishes and advances in technology change the way we shop.