TWO major utility companies have spoken publicly about offshoring parts of their business ahead of Labour’s nationalisation plans.
In their manifesto the party declared that UK’s energy and water systems would be brought into ‘democratic public ownership’ under their governance.
SSE has incorporated in Switzerland a direct and wholly-owned subsidiary company to ‘acquire, oversee and hold investments or other financial assets.’
The company is holding SSE’s electricity transmission and distribution networks through a share-for-share exchange.
SSE commented their decision in a statement: “This is intended to support long term investment in low carbon infrastructure in SSE’s core businesses – there are no profit or tax advantages and it is fully consistent with SSE’s commitment to fair tax.
“Switzerland is a party to the Energy Charter Treaty, and the incorporation of a Swiss company is also an additional safeguard, which SSE does not believe would be required in practice, should SSE’s electricity networks businesses and interests in SGN become the subject of proposed legislation for nationalisation.
“In practice, SSE expects that precedent, the principle of fairness and the need to secure future investor confidence in the UK economy means it should be possible to secure fair value from nationalisation for the electricity networks businesses without recourse to treaty protection.”
National Grid has taken similar steps, setting up holding companies in Hong Kong and Luxembourg, with other companies reported to be following in their footsteps.
Georgina Penfold, Founder of ICON, commented on the news: “It signals a deep-seated uncertainty and lack of confidence in future direction of UK policy in relation to the industry. This is almost certainly not a result of Corbynism alone but obviously this has highly impacted the decision made by these companies.
“If you were to dig deeper, in all likelihood other reasons would also be found.”