MP accuses Yorkshire Water of ‘exploiting’ customers for profit

Yorkshire MPs led by Skipton and Ripon’s Julian Smith launched a series of scathing attacks on the foreign-owned water firm in Parliament last night, following months of outrage over its failure to pay any corporation tax last year.

Yorkshire Water has made repeatedly clear it has broken no rules, but is nonetheless coming under sustained pressure to overhaul its financial arrangements as concern grows about both the rising cost of living and the scale of corporate tax avoidance in Britain.

Mr Smith said it was time for the Government to “shake up” the water industry and clampdown on the activities of profiteering firms.

“The financial decisions of Yorkshire Water I believe are exploiting the constituents I have in Skipton and Ripon, and people across Yorkshire,” Mr Smith said. “In the year 2012/13 they made an operating profit of £331m, on a turnover of £936m. Average increases in bills were 6.6 per cent.

“There was a quadrupling of the dividend payment from £62.3m to £256m in the last year. And the thing that really sticks in the craw is that despite these massive dividends, Yorkshire Water paid zero tax.”

Mr Smith also highlighted the massive remuneration of Yorkshire Water executives including chairman Kevin Whiteman and chief executive Richard Flint, both of whom were paid more than £1m last year. A communications officer, he added, was paid £165,000.

Mr Smith met with many of the firm’s senior team in September to air his concerns.

“There was no contrition from these highly-compensated board members about how tough it is at the moment for consumers,” he said. “They basically said they would not budge.”

Brigg and Goole MP Andrew Percy said it was “appalling” that Yorkshire Water should be paying out more than £250m to shareholders when it ought to have been investing in local infrastructure – particularly with the increasing threat of flooding over recent years.

“I have nothing against profits,” Mr Percy said. “So long as it comes with investment, there is no problem. However, I think the data is very compelling that something isn’t working right here.

“We need to see beefed-up powers to deal with water companies who are making huge profits but aren’t investing in communities such as mine, which are particularly prone to flooding.”

The Government is due to bring a Water Bill before the Commons before the end of the year which will introduce new measures to allow businesses to switch water supplier for the first time.

But Mr Smith said the Bill should extend the same choice to homeowners while finding innovative ways to claw back money for the Treasury and hand excess profits to bill-payers.

“The Government has done a lot on tax – but I urge it to go further,” he said. “We should look at everything in this industry and say clearly to these companies like Yorkshire Water, ‘No more, this has to change’. We should shake this industry up from top to bottom.”

In a statement following the debate, Yorkshire Water reiterated that it pays ita taxes “in full and in total compliance with the rules of Her Majesty’s Revenue and Customs (HMRC).”

A spokeswoman said: “We have always been nothing less than completely open and honest around our accounts and we are committed to delivering more for less for our customers, keeping prices as low as possible.”