Michael Gove confronts water industry execs over tax avoidance and million pound salaries
Michael Gove has attacked the water industry over tax avoidance in a damning speech to industry executives.
The Environment Secretary accused water companies of relying on their monopoly to “play the system for the benefit of wealthy managers and owners, at the expense of consumers and the environment.”
Speaking in central London today he said some firms were using “sophisticated financial engineering” to minimise their tax obligations.
“One might hope that companies making such massive profits, paying out such big dividends and supporting such generous executive salaries, would be big contributors to the Exchequer through their tax bill. Well some are. And others not. Very much not,” he told industry bosses.
Singling out Thames, Southern, Anglian and Yorkshire he continued: “They have set up multi-layered corporate structures of dizzying complexity involving multiple subsidiaries, some based offshore.
The Environment Secretary also took aim at “handsomely rewarded” executives with salaries reaching £2.8m, highlighting that at £960,000, the salary of Thames Valley chief exec was five times that of the Prime Minister.
In a stern warning to the industry, he conceded that there was growing public pressure for Labour’s plans to renationalise the water sector.
“Unless we see change, the pressure for renationalisation will only grow. Renationalisation has significant and growing public support.
But he added “that renationalisation would be a terrible backwards step”.
The Environment Secretary urged companies to use their “imagination, tenacity and creativity” to solve the problems facing the sector or “face the consequences”.