Jim Armitage: Thames Water must now clarify its muddy record on tax

Having bashed Thames Water over its outlandishly high payments to shareholders and executives and poor performance for customers, it can only be right to applaud it now for doing the right thing.

Yesterday, we revealed chief executive Steve Robertson would not be getting a bonus for the next two years, and that — more importantly — his 2020 payment will be set by leakage and customer satisfaction measures rather than profit.

Today, it goes further, saying investors, too, will get no dividends until the company sorts out its leaks. At a time when Londoners’ trust in the company is near rock bottom after repeated floods and water shortages, this is absolutely the right thing to do.

The interests of managers, shareholders and customers are now all aligned.

This could not have come soon enough. The public mood is growing in favour of nationalisation of our infrastructure, and Thames was one of the bogeymen for Corbyn and Co’s anti-capitalist rabble.

Spotting the groundswell, even Environment Secretary Michael Gove has jumped on the utility bashing bandwagon, attacking water companies for paying too much to bosses and shareholders.

Finally, Thames has listened. Not only is the pay issue being resolved, but the company is closing its opaque Cayman Island structures.

Next on the agenda should be its poor record on tax. As Gove has loudly pointed out, Anglian Water and Southern paid no corporation tax last year, and “Thames has paid no corporation tax for a decade”.

Today’s figures show it paying nothing again. Part of that is because of the tax reliefs it gets for investing in upgrading the Victorian network.

But primarily the zero bill arises from tax deductions from its interest payments.

The company tackles that issue in today’s annual report by claiming its low taxes benefit customers because it means they pay lower bills.

But surely every company in Britain could make that argument. It’s not good enough.

Thames’s new-found corporate responsibility has taken some of the wind out of the Left’s sails, but there’s some way to go yet.