Michael Gove yesterday warned ‘tax-dodging’ water companies that they will they ‘face consequences’ unless they decide to reform
Michael Gove yesterday warned ‘tax-dodging’ water companies that they will they ‘face consequences’ unless they decide to reform.
The Environment Secretary said the companies were ‘dragging their feet’ when it came to stemming leaks and investing in infrastructure.
Calling on them to justify their monopoly position, which he described as a ‘licence to print money’, the former Education Secretary demanded that they improve their customer service.
Labour under Jeremy Corbyn has threatened to nationalise water companies.
In a speech to the trade body Water UK’s annual conference yesterday, Mr Gove said that ‘with monopoly power [comes] special responsibilities’.
He said: ‘Far too often, there is evidence that water companies have not been acting sufficiently in the public interest.
‘Some companies have been playing the system for the benefit of wealthy managers and owners, at the expense of consumers and the environment.’
He accused companies of avoiding tax by hiding their financial structures in offshore havens, like the Cayman Islands.
He also pointed out that Anglian, Southern and Thames Water paid no corporation tax last year. ‘Change has to come,’ he said. ‘Because the consumer – and the environment – deserves better.
‘Unless we see change, the pressure for renationalisation will only grow.’
The number of pollution incidents caused by water companies had not changed in the past decade, he added.
The Environment Secretary said the companies were ‘dragging their feet’ when it came to stemming leaks and investing in infrastructure (file photo)
‘So what does the public see? An industry slow to stop leaks, slow to repair them, slow to stop pollution and slow to say sorry,’ he said.
He pointed out large salaries paid to water company bosses, describing them as ‘very handsomely remunerated’.
Responding to Mr Gove’s speech, Water UK insisted it was working in the public interest and ‘dealing firmly with issues which threaten trust’.
Chief Executive Michael Roberts told the conference that the sector needed to be on the front foot, adding ‘I think there are reasonable grounds for optimism on that.’
He said the water companies which banked through the Cayman Islands were looking at their arrangements, and some had pledged to stop the practice, while other companies had pledged to end or reduce the practice of high-gearing.