M
Member
Speaking in the House of Lords on 28 October 2024
Debate
Water (Special Measures) Bill [HL]Contribution
Under the Companies Act 2006, to pay dividends a company must have sufficient distributable reserves. These are, in essence, realised profits. However, water companies have manufactured distributable reserves through financial engineering. A good example is that they capitalise interest payments and part of the repair and maintenance costs. Thames Water capitalised borrowing costs of £159.4 million in 2024 and £215.2 million in 2023. In addition, the company also capitalised unspecified amounts of repair and maintenance costs. A note in its account states:
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