Water Industry

Debate between Frank Dobson and Julian Smith

Tuesday 5th November 2013 Commons Chamber

[Julian Smith (Skipton and Ripon) (Con)]

The cost of living is a major issue in Yorkshire, as it is across the rest of the country. I therefore pay tribute to the Government for acknowledging that we need to deal on every level with the cost of living, and this debate is at the very centre of what we are doing.

The policies the Government have come up with to get every energy consumer on to the lowest tariff are exactly the right thing to do, and I hope the review of green levies and Labour’s £125-worth of green taxes will enable us to reduce energy bills, too. As my hon. Friend the Member for Newbury (Richard Benyon) and my right hon. Friend the Member for Wokingham (Mr Redwood) have said, addressing water bills will be another big step, by making the industry more competitive and ensuring we have a water industry that is fit for the future.

Giving businesses the opportunity to switch will enable big users of water to get the very best deal. It is unfortunate, however, that that opportunity will not be available to the consumer. I agree with my right hon. Friend, who urged the Government to push ahead, where possible, with consumer-led competition. My constituents really have only one option, which is Yorkshire Water, unless they happen to live in Long Preston, near Settle in the western part of my constituency, where they have their own water trust, which enables them to guarantee much lower prices.

I wish to focus on Yorkshire Water because my hon. Friend the Member for Brigg and Goole (Andrew Percy) is correct: Yorkshire Water has done some positive things on infrastructure, and it has also done some good, and some bad, things on flooding, but the financial situation and decisions of Yorkshire Water show that it is exploiting my constituents and people across Yorkshire.

If Members have not read the Yorkshire Water annual report, perhaps I should recap. In 2013 it made an operating profit of £331 million on a turnover of £936 million. Average increases in bills were 6.6% with the average bill being £356. There was a quadrupling of the dividend payment, from £62.3 million to £256 million in the past year. The thing that really sticks in the craw of my constituents is the fact that despite those massive dividends and huge opportunities for its shareholders, Yorkshire Water paid zero tax in the last financial year, and with a highly leveraged balance sheet. When we compare that behaviour with the behaviour of my constituents, the small and micro-businesses throughout my rural constituency, we see that today’s debate and the one we will continue to have about holding the feet of the water companies to the fire is vital.

People will say that Yorkshire Water has done nothing illegal, and it has not, but we thought as Yorkshire MPs that we should take that from the horse’s mouth, so we invited the senior management team down to Westminster. Let me list that team: Kevin Whiteman, the chairman, earns £1,077,000; Richard Flint, the chief executive, earns £1,091,000; Liz Barber, the director of finance and regulation, earns £476,000; and the communications officer earns £165,000.

[Frank Dobson]

May I urge the hon. Gentleman not to use the word “earns”, because it has a sensation that they deserve the money? The best way to describe it is probably to say that they are “being paid”.

[Julian Smith]

The right hon. Gentleman’s intervention is very accurate.

Those highly paid—highly compensated—board members showed no contrition about how tough it is at the moment for consumers. They basically said that they would not budge on their stretching of the tax rules to ensure that they paid no tax. We talked about the clause in their commitment to customers where they said that they would be responsible and that they were environmentally and socially engaged, but they just would not listen.