Willy on Thames Water

Err, helloo?

Thames Water has done what the regulator has asked but no more. It has not been concerned to make the water system more resilient, with, say, back-up reservoirs to guard against climate change

I might be wrong here but I was under the impression that Thames had indeed applied to build more reservoirs and had had the planning permission turned down?

Thames Water’s proposals for a huge new reservoir near Abingdon have been rejected by environment secretary Caroline Spelman acting on the advice of an independent planning inspector.

Oh yes, I was right. So that\’s WillyWaffle again isn\’t it? And as to this:

Second, as public service companies, all British water companies should pay corporation tax as a percentage of turnover, with proper deductions for investment and depreciation, but no allowances for any financial transaction with a tax haven.

What is the idiot talking about? A profit tax based upon turnover? Eh? OK, so let\’s assume he doesn\’t mean that but what he actually says: a tax on turnover. So, err, that just means higher prices for all water users, doesn\’t it? The government is entitled to a slice of what you pay for water: finis.

18 comments on “Willy on Thames Water

  1. The government’s decision not to go ahead with the new reservoirs is one of the most irresponsible things they have done. Utter stupidity.

  2. Anglian Water’s tax dodge involves a loan to a subsidiary company in the Cayman Islands. I can’t help but notice that a disproportionate number of these schemes are based in the Caymans. Given that they have just 55,000 inhabitants, we wouldn’t lose much by banning trade with them.

    Here’s my plan:
    The UK government could declare the Caymans a “state sponsor of financial terrorism” and ban all UK banks, companies, and individuals from trading with them. Vast sums of money would be repatriated, and a great wad of tax would thus be paid. (Ok in practice they’d probably shift to the next-dodgiest microstate, but just rinse and repeat until the message gets through that such avoidance will be actively fought.)

    Any chance this might work?

  3. There is also the £250m Beckton Desalination Plant, that can only be used to compensate for water shortage during a drought, and not for supplementing the reservoir water to prevent drought in the first place, all due to environmental (a.k.a. climate change) requirements.

  4. Andrew M

    Apart from the horror of adding yet more bansturbationary legislation to the bulging tax code, you wopuld rapidly get to the point where, for example, the so-called tax haven becomes Belgium or Netherlands or Estonia or even somewhere that might impose sanctions on the UK for doing such stuff.

  5. Blue Eyes

    Leaving aside the usual discussion on the incidence of VAT.. water is zero rated (for domestic supplies, at least)

  6. Any chance this might work?

    It might, but it would more likely be interpretted by much of the world as a return to colonialism. “You must tax your corporations as we think is right” isn’t going to sound very good coming from 21st century Britain.

  7. Perhaps The Guardian should also pay corporation tax based on their turnover – given their policy of spending tonnes on their website and giving it away for free means they make a large loss and thus pay no taxes based on profits. I wonder what Willy makes of that “tax avoidance”?

  8. “VAT.. water is zero rated (for domestic supplies, at least)”
    For now.
    You have to look on this as a work in progress.
    Next is air.

  9. What is the idiot talking about? A profit tax based upon turnover? Eh? OK, so let’s assume he doesn’t mean that but what he actually says: a tax on turnover. So, err, that just means higher prices for all water users, doesn’t it? The government is entitled to a slice of what you pay for water: finis.

    I may be responsible for this piece of idiocy. I have advocated, even here, replace taxes on profits with a tax on turnover. Profits are, after all, an endlessly flexible concept. A matter of opinion even. Turn over is much easier to measure. So instead of taking 25% of the profits, we ought to take 2.5% of the turn over. This would reward well run companies and punish poorly run ones. It would also strongly discourage management from looting their companies with perks and benefits like tickets to the rugby.

    TW did call it idiocy the last time I mentioned it. Which it may be. But either way, the State is going to take a slice of what we pay for water. There is no escaping that. Maybe they would take a larger slice this way. Maybe not. But take it they will.

  10. Andrew M – I have a much better idea. Let’s look at the Cayman’s and see what policies they have that are working so well. And then copy them. We can then declare everyone else except the Cayman’s State-sponsors of slavery and offer free anonymous bank accounts to all and sundry.

    We have to choose our friends and our enemies carefully. I find it hard to believe we want to be on the side of Gaddafi and the French.

  11. SMFS

    A tax on turnover instead of profit is a bollocks idea. For one thing, some turnover as far more expensive to generate than some other.. so a 2.5% turnover tax would weigh far more heavily on, say, a typical manufacturer or retailer as oppose to a typical service company.

    For another, once you shift the point at which you raise the tax, you shift the point at which people seek to manipulate. Turnover is already a ‘managed’ number in various instances (eg where VAT is a sensitive issue.

  12. The Thought Gang – “A tax on turnover instead of profit is a bollocks idea. For one thing, some turnover as far more expensive to generate than some other.. so a 2.5% turnover tax would weigh far more heavily on, say, a typical manufacturer or retailer as oppose to a typical service company.”

    Which seems a good reason to encourage people to get out of low-margin businesses and into higher margin ones. Which such a tax would do. Unlike, say, rewarding the failing industries and punishing the successful ones.

    I agree most people thought it was a stupid idea, but some people might see this as a feature and not a bug.

    “For another, once you shift the point at which you raise the tax, you shift the point at which people seek to manipulate. Turnover is already a ‘managed’ number in various instances (eg where VAT is a sensitive issue.”

    I am sure that is true. But profits are odd things. They are the cash the management can’t find a pressing need for. They often have a pressing need for it. Turn over is much harder to hide.

  13. “Which seems a good reason to encourage people to get out of low-margin businesses and into higher margin ones.”

    So we incentivise management consultancy over, say, selling food?

    Come *your* revolution, I’m moving somewhere that I can still get pie ;)

  14. The Thought Gang – “So we incentivise management consultancy over, say, selling food? Come *your* revolution, I’m moving somewhere that I can still get pie ”

    Come *my* Revolution you will have a lot more problems than just pie! Although the death penalty for anyone who talks on their mobile on the train will make it seem all werthwhile.

    But come my revolution, you would still get pie. It would just be more expensive. As people move out of low margin industries, the people left would charge more. Margins would equalise.

    On the other hand, management consultancies are just part of the wasteful system we have now because their fees can be written off. Profits magically reduce. I mean, I hope that most management consultants are “related party transactions” (ie giving a friend’s thick child something to do), but I am afraid they aren’t. However if margins have to be kept up and profits can be as high as you like without tax penalty, I would hope people would put more pressure on management to be efficient. And admitting you don’t have a clue how to do your job and need some spotty accountant graduate to do it for you is an obvious cost saving waiting to happen.

  15. Which seems a good reason to encourage people to get out of low-margin businesses and into higher margin ones.

    This assumes low-margin enterprises are inherently bad and high-margin ones inherently good. Which means a company which carries out maintenance works on a refinery (low margins, high volume) is undesirable.

  16. Tim Newman – “This assumes low-margin enterprises are inherently bad and high-margin ones inherently good. Which means a company which carries out maintenance works on a refinery (low margins, high volume) is undesirable.”

    No, I would think that low-margin businesses almost by definition are good in my eyes. After all they are probably old and established – not all of them of course before people jump in and mention custom-hand-made shotguns or whatever. A company like Apple has lots of patents and so can operate at high margins. I don’t much care for them. Someone who makes, say, buggy whips to use a cliche, has little special protection in the market and so are probably low-margin. It is hard to run a sandwich shop because everyone can do it.

    But on the whole people do move from low margin industries to high ones. That whole creative destruction thing involves low end businesses failing and being replaced by new higher end ones. Until the patents expire and the industry matures and everyone is on low margins once more.

    Maintenance would still be done. There would just be fewer people doing it and it would cost more. Is that a good thing? A bad thing? It depends on how the change would influence the rest of the economy.

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