Thames Water renationalisation plans being stepped up, says minister

A picture


The environment secretary, Steve Reed, has said the government is stepping up preparations for temporary nationalisation of Thames Water, indicating it will reject pleas from the company’s creditors for leniency from fines and penalties.Thames Water’s largest creditors control the utility and have made a bid to cut some of its debts and provide £5.3bn in new funding to try to turn it around.However, the creditors have said their plan needs considerable leniency from the water regulators Ofwat and the Environment Agency over fines for environmental failings.The Guardian this month revealed that the creditors had asked for immunity from prosecution for serious environmental crimes in return for taking on the company.

Reed on Thursday told parliament that Thames Water must meet its statutory obligations, after being asked about possible “regulatory easements”.“Thames Water must meet its statutory and regulatory obligations to their customers and to the environment,” he said.“It is only right that the company is subject to the same consequences as any other water company.“The company remains financially stable, but we’ve stepped up our preparations and stand ready for all eventualities, as I’ve said before, including special administration regime if that were to become necessary.”One person close to the situation said they believed it was “50/50” whether the government imposed a special administration regime (SAR), essentially a temporary nationalisation.

The SAR could wipe out much of Thames’s £20bn in debts, although the company will still need billions of pounds of investment to upgrade creaking infrastructure.There are about 100 creditors who are in line to take over the ownership of Thames Water.They include big institutional investors such as Aberdeen, BlackRock, Invesco and M&G, and US hedge funds such as Elliott Investment Management and Silver Point Capital.Regulatory easements would prove controversial because they would in effect make it much easier for Thames’s new owners to achieve bigger financial returns, as it would exempt the company from fines that could reach hundreds of millions of pounds.In May, Thames Water was fined £123m by Ofwat – the biggest ever fine imposed by the regulator.

The creditors expect future fines of more than £1bn if current regulations are applied.However, the creditors have argued in meetings with government that the only way to turn around Thames Water is for the threat of fines to be lifted.The US private equity firm KKR pulled out of a rescue deal after making the same argument.A spokesperson for the creditors said: “Broad regulatory support is needed to unlock a market-led solution for Thames Water that will secure billions of pounds in fresh investment for its ageing network, allowing a world-class leadership team to start the intensive turnaround and deliver better outcomes for customers and the environment.“This investor group is committed to working with the government and regulators to agree a pragmatic plan that recognises what Thames Water can realistically deliver and they expect to be held accountable for an ambitious trajectory for the company’s return to compliance.

Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotion“More than £10bn would be written off to get the company back to investment grade, expected to be the largest financial loss on an infrastructure asset in British history.”About £6.7bn in debt would be written off under the creditor plan.Another £5bn has already been written off in equity investments by the previous owners.A person familiar with the creditor group’s thinking said SAR would be a “political decision”, because the requested regulatory easements were within Ofwat’s powers.

“If they decide they can’t [be lenient on the environmental obligations], they’ll just end up doing it in government themselves” after taking over Thames, the person said.Other water companies would be likely to seize on any leniency to argue that they should also be exempted from fines on the grounds of fairness.However, the creditors argue that exemptions for Thames Water should be the first stage in an overhaul of the regulatory system.The former Bank of England deputy governor Jon Cunliffe is considering the shape of a new system.A Thames Water spokesperson said: “Thames Water is committed to improving outcomes for the environment and its customers.

“We are investing billions of pounds in our network and any recapitalisation of the business will need to ensure that is maintained for the benefit of all our stakeholders.“Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment-grade credit ratings.”
A picture

Australian supermarket tahini taste test: one of the worst is ‘thick enough to build a sandcastle’

From bitter and gritty to one that pours ‘like warm honey’, Nicholas Jordan finds surprising variety in 18 jars of paste made with the same single ingredientGet our weekend culture and lifestyle emailIf you value our independent journalism, we hope you’ll consider supporting us todayThis morning I made myself a tahini latte. The morning before, I mixed tahini with yoghurt and powdered ginger and poured it over my muesli. I use tahini in salad dressings, in sauces for spicy noodles, I’ve even put it in pesto. But until a few weeks ago, I only had the most vague idea of which tahini I liked or not (I just knew to avoid any brands in the health aisle) and I suspect I’m not the only picnic-attending hummus-maker that needs an education.I gathered 18 supermarket aisle tahinis and four reviewers (including Syrian Australian author and chef Sharon Salloum, and Tuli Keidar, a friend who came close to dedicating their life to hummus before joining the coffee industry) for a blind taste test

A picture

The secret to crisp tofu | Kitchen aide

I want to like tofu, but I don’t because of its rubbery texture. How do I make it nice and crisp? Anne, by email “Moisture is the enemy of crisp tofu,” says Emma Chung, author of Easy Chinese Food Anyone Can Make, so the quest for cubes of bean curd that are crisp on the outside and soft on the inside starts by getting rid of as much excess water as possible (and choosing a tofu labelled “firm” or “extra-firm” in the first place). “I usually do this by wrapping the tofu in tea towels, placing it between two large plates and putting a heavy pot or pan on top,” Chung says. After 10 minutes, you “should have a nice and firm tofu that will have a lovely texture, and it will be a lot easier to crisp up”.Guardian columnist Ravinder Bhogal, meanwhile, pops her tofu on a wire rack set over a tray and covers it with kitchen paper or a clean cloth: “Put a weight on top and leave it for a couple of hours, and ideally overnight – that will squeeze out the excess moisture

A picture

José Pizarro’s recipe for broad bean and mint tortilla with a manchego crust

In Spain we say, “Habas en abril empiezan y en abril se acaban” – that is, broad beans begin in April and end in April. In the UK, the season starts a bit later, around June, so we’ve got a bit more time yet to enjoy them. Still, the season is short, so I use these wonderful beans as much as I can, while I can. This is the kind of dish I’d make on a quiet afternoon: simple, full of flavour, nothing fancy. Just a nice way to enjoy what the season gives you, before it disappears again for another year

A picture

Rukmini Iyer’s quick and easy recipe for tandoori chicken skewers with coriander chutney | Quick and easy

I’ve been on a quest for the perfect tandoori marinade (without the E numbers or red food colouring) for years, and tweak my recipe on every repeat. This one is easily my favourite so far: the cloves lend a wonderful smokiness, and if you can pop the chicken in the marinade in the morning, it will have taken on an amazing depth of flavour by the evening. This would work just as well on a barbecue – just scale up the amount of chicken and the marinade ingredients as needed.You will need four large metal or bamboo skewers (if using the latter, soak them in water for half an hour first). Serve with flatbreads or naan, and shredded lettuce, if you wish

A picture

Pastry perfection: Anna Higham’s recipes for chicken and herb pie and foldover pissaladière

Warmer weather always has me dreaming of elaborate picnics, just like the ones my mum used to take us on as kids. She made superlative chicken pies, and I always think of them at this time of year. Mum would use shop-bought pastry, but here I’ve made a herby rough puff to up the summery feeling. The onion and anchovy turnovers, meanwhile, are the perfect pocket savouries to keep you going on a long walk or day out. You could always make one batch of pastry and halve the amount of both fillings, so you can have some of each

A picture

How to make chocolate chip cookies – recipe | Felicity Cloake's Masterclass

Once upon a time, not so long ago, the only so-called chocolate chip cookies on offer in the UK were, in fact, biscuits – small, brittle ones peppered with tiny, waxy, cocoa-coloured pellets. When I finally discovered the soft, chewy American originals in a subterranean outlet at Birmingham New Street station, my teenage mind was officially blown. These are even better.Prep 25 min, plus chilling Cook 15 min Makes 15120g room-temperature butter 170g dark chocolate 75g light brown sugar 75g granulated sugar ½ tsp vanilla extract A pinch of salt 1 egg, beaten240g plain flour ½ tsp bicarbonate of soda Sea salt flakes (optional)Make sure your butter is soft enough to beat – if your kitchen is very cold, or you’ve forgotten to get it out of the fridge in time, dice it and leave it out on the counter while you gather together the rest of the ingredients. I tend to use salted butter for baking, as for everything else, but it’s up to you