England water industry may be added to sensitive business sectors list
Water companies in England and their investors could see potential deals face extra scrutiny under plans to add the industry to a list of sensitive sectors.
It comes amid an overhaul of regulation for the troubled sector and as firms including Thames Water and Southern Water face financial woes.
Communications, energy and data infrastructure are among the 17 sectors that must notify the investment security unit of certain business deals since the list was created in 2021.
Chancellor of the Duchy of Lancaster Pat McFadden has asked for businesses’ views on extending this requirement to the water sector.
It is not expected to affect large numbers of deals but reflects ‘increasing risks to the sector’s resilience in a growing threat landscape’, the Cabinet Office said.
‘Data shows our investment security powers are working well, but there’s more we can do to ensure our tool kit keeps pace with the modern economy,’ McFadden said.
‘We’re taking action to hone the type of transactions facing the greatest scrutiny, as well as consulting on updates to the sectors of the economy specified in the legislation.’
Thames Water is battling to secure funding to shore up its creaking finances and stave off temporary nationalisation by the government.
Southern Water asked its owner, Sydney, Australia-based investment firm Macquarie Group Ltd, for an extra £2.1 billion earlier this month to help boost its struggling finances.
Making semiconductors and critical minerals into their own standalone categories and moving computing hardware to fall under semiconductors is also being proposed.
McFadden also said he planned to remove some requirements that are ‘very unlikely to present risk’.
Businesses will no longer need to notify the unit of certain internal reorganisations or when appointing liquidators, special administrators and official receivers.
Secondary legislation would be brought to Parliament to put these changes in place.
By Helen Corbett, PA Political Correspondent
Press Association: Finance
source: PA
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