Labour may crack down on utility takeovers
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.MARY FAGAN
Industrial Correspondent
A Labour Government would consider demanding separate listings on the London Stock Exchange for all UK water and electricity firms which are foreign-owned or are subject to takeovers and mergers. The Labour Party's proposal is driven by fears that consumers would suffer if privatised utilities that are absorbed into larger groups prove difficult to regulate.
The issue will be raised this week by Richard Caborn, shadow minister for competitiveness and regulation, at meetings with the European Commission and Parliament. He will also push the idea of a European Union regulators' forum to promote common standards and a level playing field.
Mr Caborn will warn that the rest of Europe must not follow Britain's "laissez-faire" and "inadequate" approach to regulation with the opening up of their national energy and water markets. He is to consult with the Commission on the legal and technical problems of ring-fencing utilities owned by large US and European conglomerates.
City analysts believe that the prospect of enforced separate listings would act as a strong disincentive for predators scouring the UK for potential targets.
The electricity sector has seen a spate of takeovers and mergers. Eastern Electricity, one of the largest regional firms, was absorbed into Hanson and South Western Electricity was taken over by Southern Electric International of the US. There is speculation that Yorkshire Electricity will be the next to go.
Ian Byatt, the water industry regulator, has already warned that he wants separate listings for companies that fall subject to takeovers or mergers. The Government bowed to his advice in the recent takeover of Northumbrian Water by Lyonnaise des Eaux of France, demanding that the French group list all its UK water interests separately on the Stock Exchange by 2005.
However Mr Caborn is thought to be concerned about the electricity industry, where the watchdog, Professor Stephen Littlechild, has chosen not to go down that route. It could also become a contentious issue if, as some expect, British Gas decides to back out of public gas supply by selling off operations in different parts of the country.
Mr Caborn is worried that foreign-owned companies will exploit weaknesses in the UK regulatory system by consolidating accounts and cross-subsidising other parts of their group from the profitable utilities businesses which serve the public.
Apart from continuing speculation over Yorkshire Electricity, the industry is also awaiting the outcome of inquiries by the Monopolies and Mergers Commission into the proposed pounds 2.8bn takeover by National Power of Southern Electric and PowerGen's desire to buy Midlands Electricity for pounds 1.9bn.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments