Well, yes, it has

“anything owned by rich people should be nicked.”

Except the definition of “rich people” is, like many other terms used by our favourite WGCE, “fluid”.

FYI

Utilities advised to look offshore in face of Labour threat

Analysts say move could safeguard water and energy companies against nationalisation

Gill Plimmer and Jonathan Ford in London February 28, 2018

Britain’s listed water and energy companies should explore shifting businesses offshore to protect investors if a future Labour government sought to nationalise them, according to analysts at Macquarie, the Australian investment bank.

In a sign that utility investors are taking the threat of re-nationalisation seriously, Macquarie’s equity research team argues that an overseas move could give companies such as Pennon and National Grid better safeguards against future expropriation than would be the case if they remained UK registered companies.

“We see UK listed utilities either potentially re-domiciling, or restructuring foreign ownership to enjoy higher investor protection,” said Macquarie’s utilities analysts in a research note.

The note says that the boards of UK registered utilities have a fiduciary responsibility to explore overseas registration urgently because a switch could “only happen before any potential dispute was reasonably foreseeable”. The note is titled “Four legs good, two legs better” — a reference to George Orwell’s dystopian fable Animal Farm, which warned of the tendency for socialism to descend into tyranny.

Until March last year, Macquarie’s infrastructure investment arm owned a large stake in Thames Water, the UK’s largest water utility. It is also the largest shareholder in Britain’s largest gas distribution network Cadent.

A spokesperson for Macquarie Group said: “The investment research published by our equities analysts is wholly independent and represents their views of current market dynamics rather than those held by Macquarie Group.”

Utility shares have fallen about 30 per cent since the general election in May last year, when Labour first mooted proposals for renationalisation.

The note comes as water and power companies scramble to improve their reputations amid criticisms of profiteering and failing to protect consumer interests. The environment secretary Michael Gove also hit out in January at water companies for their “opaque financial structures”.

Although the analysts acknowledge that domestic investors receive strong protection from UK law and international human rights legislation, they argue that investors can achieve superior protection through the UK’s 1,400 bilateral investment treaties (BITs) negotiated by the EU, as well 94 by the UK itself.

The UK BITs that remain in force range from those with China and Turkey to pacts with such countries as Swaziland, Nicaragua and Laos.

The treaties contain provisions to protect investors from unfair expropriation. In particular, Macquarie’s analysts point to the provision stating that any compensation should “amount to the genuine value of the investment expropriated immediately before the expropriation or before the impending expropriation became public knowledge”.

They claim that this would protect investors from the risk of politicians talking down the value of a company with a view to minimising compensation. UK law offers no specific protection from this abuse.

The idea of foreign entities seeking to protect their interests in the event of nationalisation angered Labour politicians.

Rebecca Long-Bailey, shadow business secretary, said: “Transferring asset holdings overseas in pursuit of higher compensation shows total contempt for the British public. It is shocking but not surprising that investors are attempting to profit from nationalisation, just as they have from privatisation.

“It is precisely this kind of behaviour that makes democratic ownership and management of our utilities so necessary and popular.”

One City lawyer specialising in trade and competition issues — who did not want to be named — questioned whether redomiciled companies could rely on BITs as a protection against expropriation. “The UK would have to submit to arbitration, because there would be no basis to hear the investors’ claims in a British court,” the lawyer said. “There is no certainty a future UK government would agree to this.”

Copyright The Financial Times Limited 2018. All rights reserved.

Totally amazed

Richard, once again your argument leaves me confused. On 31 January you published a list of tax havens in which the USA, Switzerland, Hong Kong, Singapore and Germany appeared in the top 10. Aren’t they just the kind of economies to which we should be aspiring? What am I missing here?

Reply
Richard Murphy says:
March 1 2018 at 8:07 pm
Why do we wish to aspire to be places that harm fair competition

The man has no answers

Richard Murphy says:
March 1 2018 at 9:50 pm
Germany is not ideal – because of its obsession with secrecy after the experience of the 30s

It is not, however, a tax haven

It is a secrecy jurisidiction

The other three are tax havens

Diogenes captain potato said that houses were a tax haven. When I pointed out that this defied his own definition of a tax haven ie it was abroad and had legislation designed to benefit foreigners’ he told me that I was an idiot and it was his game and he could change the rules if he liked.

So Murphy–like his on-off pals in ZaNu–wants to ensure that no one can get their money overseas to prevent UKVenezuela-style theft by Cob-bog & MNcNasty.

Is it another vermine ploy?

“Second, the potential for this to happen is already foreseeable and so is not protected by treaties”

I see. Remind me never to sign any contract with you Rochatd..

“I have always argued that offshore is a mechanism created by capital to launch an assault on democracy”
“The idea of foreign entities seeking to protect their interests in the event of nationalisation angered Labour politicians.”
How dare the sheep protest the result of the vote! The wolves have carried the day, and the dinner menu is now decided!
Democracy is invoked as if it were a talisman, but it’s oppressive without respect for the rights of individuals, including property rights. And corporations have rights too, as do the corporations’ shareholders.