MPs would be better employed looking into water watchdog

SOME 40 Yorkshire MPs have expressed concern about the behaviour of Yorkshire Water and its failure to pay any tax on its profits of over £240m, equal to 26 per cent of turnover (Yorkshire Post, September 5).

You would expect that the MPs would be more concerned in the interests of their constituents by challenging the company’s excessive profits, all of which come from the pockets of Yorkshire people rather than the tax loss to central government, but not a bit of it.

Yorkshire Water is a foreign-owned private company dedicated to the making of profit. Nothing wrong in that, providing there are the correct and strict controls. But do we have these controls and are they applied? Even Jonson Cox, the chairman of Ofwat, and a former managing director of Yorkshire Water, expressed concern at the high rate of the payments to stakeholders, yet it is Ofwat that allows the huge profits.

Yorkshire Water’s slick public relations department constantly bombards us about the wonderful work the company is carrying out and how it is spending huge sums on our behalf. It should be clearly understood that it does not spend one penny of shareholders’ money, it is all Yorkshire people’s money and the system is so designed that the more it spends of our money the more profit it makes.

Yorkshire Water proposes a scheme and submits it to Ofwat for approval. On approval, it is structured into the firm’s five-year capital programme and the costs are factored into our water rates. By the time the work is carried out we have paid for it, plus of course the in-built hefty profit. It really is money for old rope.

Yorkshire Water is only responsible for water supplies and the sewerage system – as it is very quick to point out when suggestions of agricultural surface run-off going into the sewers are made.

The Environment Agency and local government are responsible for flood prevention work, so why is Yorkshire Water getting involved and why is it being allowed to do so? From the above the answer is obvious. It provides the company with another income source and relieves central government from funding the work. The outcome is that Yorkshire people are being doubly taxed. They pay taxes for the Environment Agency and local government, and increased water rates for Yorkshire Water to actually carry out any work.

If the above isn’t bad enough, research into the past performance of the company’s schemes gives real concern as to its satisfactory performance. Trying to get local MPs committed to resolving these concerns have failed.

Yet a third flood tax is being proposed by central Government. A flood levy is proposed where all household insurance policies will have £10 added to the premium. This will go into a central fund and will be used by insurance companies to pay for flood damage in known flood risk areas. The flood levy is welcomed by the Government because it takes the pressure off it to reduce flood reduction schemes and is added income not attributed to taxation. One thing is certain, flooding will continue to occur with all the heartache that it involves. Our MPs would be far better employed investigating the capabilities of Ofwat and all the flood alleviation authorities rather than posturing in Parliament on tax rules that they themselves introduced.