Member

The amendment is intentionally simple and easy to implement. The financial services industry, where I spent my career before arriving in this House, thrives on complexity and creating ingenious structures based on that complexity. I hope to avoid that with this amendment. In this case, as I hope the Committee will agree, simplicity is best. I have set a ceiling on acceptable borrowing of 60% of the regulated assets in this amendment. I will not argue that 60% is the right figure, nor that the calculation of total borrowings to regulated assets is the right measure of that percentage. Ofwat uses 60% for its notional gearing. However, as a restrictive level, it may be necessary to go higher; that is, less demanding. Ofwat also uses net debt rather than total debt. I prefer to exclude cash balances, given that they may be necessary for working capital needs and not available to service debt, but I am not wedded to my definition.