§ Mr. Gordon Brown
To ask the Chancellor of the Exchequer if he will estimate the amount of corporation tax forgone in each of the next five financial years assuming the profit forecasts for the water companies are as set down in listing agreement relating to each of the water holding companies as a result of section 95(8) of the Water Act 1989 precluding the operation of section 400 of the Income and Corporation Taxes Act 1988 in certain circumstances.
§ Mr. Lilley
The water companies' tax liabilities over the next five years will depend on their taxable profits during that period. In accordance with normal practice, no estimates of these amounts were included in the prospectus and listing particulars dated 22 November 1989, a copy of which was placed in the Library by my hon. and learned Friend the Minister for Water. The disapplication of section 400 was designed to secure maximum flexibility for the Government in establishing the water companies' capital structures and hence to increase proceeds.