The billionaire owner of Northumbrian Water is at the centre of a documentary being aired on North East screens on Monday (12 Jan) night.
The water company, owned by Hong Kong-based Li Ka-shing, one of the richest men in the world, has made more than £630m profit in the last two years, according to BBC investigations programme Inside Out.
But the firm pays on average less than 10% tax because of a legal tax loophole, the show will claim.
Northumbrian Water told the BBC that the company always acts transparently and within the letter and spirit of the law, adding that it is not in dispute with HM Revenue and Customs on its tax affairs.
But presenter Chris Jackson will tell viewers:
“Northumbrian Water sounds nice and local but when you pay the bill you may be surprised to learn the profits leach away to the other side of the world.”
Mr Li is the richest man in Asia, and 17th richest in the world, with an estimated wealth of £20bn.
He owns Superdrug and the Three mobile network, invests in Spotify and Facebook and has owned Northumbrian Water, which employs 1,600 staff, since 2011. He also runs a charitable foundation.
In terms of his North East assets he ranks alongside Mike Ashley and the Duke of Northumberland – except nobody here has ever heard of him, says Jackson who asks in the show:
“Of all the things he could have bought in the world, why did he buy a slice of the North East?”
Interviewee Professor David Hall of the University of Greenwich, will tell the documentary:
“The UK government provides a regulatory environment which most people think of as protecting the consumer, but its core objective is to ensure that the companies continue to make enough profits so that they want to carry on investing.”
In the last two years, Northumbrian Water has paid less than 10% tax on £630m profits, compared with the 20% standard corporation tax, because it has borrowed £1bn from Mr Li, Jackson will claim in the documentary.
The government has looked at closing the tax loophole – which is completely legal – but decided against it, prompting Labour MP John McDonnell to attack the situation in the House of Commons last year. He said:
“No wonder he’s the world’s ninth richest person. We’re making him the world’s ninth richest person. I think this is a scandal.”
> Earlier the article named him the 17th richest person. Perhaps he’s lost a bit since last year, poor dear. Down to his last few billion.
Mr McDonnell is calling for an independent public inquiry.
Nobody from the government would be interviewed for the programme, but a statement from the Treasury said recent analysis showed that changing the system used by Northumbrian Water would not save money and would undermine the competitiveness of the British economy.
Most utility companies in the UK now have owners dotted across the world, the programme will say.
> Well of course they are – subsequent governments – of all colours – since Thatcher have been obsessed with selling off the family silver to the highest bidder. A process that continues today with the NHS and DWP.
Barbara Leech, from the Consumer Council for Water which represents customers, will appear in the documentary describing how Northumbrian Water – which provides water supplies to the homes of 2.7m people in the North East – is top of the league in terms of satisfaction with services.
The full story can be seen on Inside Out (North East and Cumbria) on BBC1 at 7.30pm on Monday 12 Jan, in an episode which also features a Tyneside surgeon’s dream of building a hospital in India’s slums and a Teesside woman who helped shape modern Iraq. It will also be available on iplayer for 30 days.
Source – Newcastle Evening Chronicle, 12 Jan 2015
A North East water supplier has stopped issuing “frightening” debt collection letters after its tactics were likened to controversial pay day loan company Wonga.
Northumbrian Water was found to be among half of UK suppliers sending correspondence which appears to be from an external debt agency, but is actually from the water company itself.
The news follows June’s ruling by the Financial Conduct Authority (FCA) that 45,000 Wonga customers must be compensated after being sent letters from nonexistent law firm threatening legal action, while similar practices were also highlighted among banks and energy firms.
Northumbrian Water, which stopped the policy earlier this year, used the name Alexander James in large print at the top of the letters, but say it was clearly linked to the company.
In total, 12 of the UK’s largest water suppliers have been found to have taken part in the practice – which water watchdog Ofwat has written to companies with concerns over – while five are still doing it.
Shona Alexander is chief executive of Newcastle Citizens Advice Bureau, which offers free debt advice.
“It is good news Northumbrian Water has stopped using this letterhead and it is disappointing to hear some companies are still using it.
“It is bad practice. By saying Alexander James at the top it looks to the client as a debt collector and that is frightening. Then at the very bottom in small print it says this is part of Northumbrian Water.
“At best it is unfair and causes distress, and at worst it is deliberately misleading.”
A Northumbrian Water spokeswoman said:
“The Alexander James brand was used to encourage customers who were not paying their bill to contact us to talk about a payment plan and to receive debt advice. It was very clear that Alexander James was part of Northumbrian Water Limited.
“We took the precautionary decision to suspend using the brand name the day after the Wonga story broke. After researching why the FCA took action against Wonga, we believe we have complied with best practise as the brand name was registered with relevant financial agencies to ensure transparency and our consumer watchdog, the Consumer Council for Water, was also fully aware we were using this brand name.
“After a review we have now decided that we will not be using the Alexander James brand in the future although our use of it was transparent and compliant.”
Source – Newcastle Evening Chronicle, 16 Oct 2014
Thousands of people flocked to Durham City for the 130th Durham Miners’ Gala.
Warm sunshine helped swell the crowds later in the morning.
About 65 banners from across the North East and elsewhere were joined by 50 bands for the procession to the Racecourse.
Banner numbers were swelled by mini-banners from several primary schools, including West Rainton, and banners from other unions.
Gala Day starts early for many with breakfast meetings in clubs and community centres in the outlying former pit villages.
There was an early start in Houghton for Pat Simmons and the members of the Lambton and Houghton Banner Group.
Their band for the day, from Elland in Yorkshire, was treated to breakfast at the Peppercorn Cafe in Houghton before accompanying the Houghton banner on the first of two processions.
“We processed the banner to the war memorial in Houghton before taking it to Durham,” said Pat.
“The band played the miners’ hymn Gresford to remember those miners who fought in the First World War.
“Houghton didn’t have a banner for a long time after the old one was lost in a fire in the 1960s.
“This will have been the first time for many years the banner has been taken through Houghton first before going to Durham.”
The Gala attracts not just former pitmen, but also people too young to have worked in the coal industry.
“I am only 22 so never worked down a pit,” said Robert Kitching, who was helping to carry the Silksworth banner.
“I’m interested in mining and heritage, and this is my fourth year with banner.
“If the Gala is to survive, we have to attract younger people.
“But it is difficult to get them involved.”
Richard Breward, 67, was parading the Easington Lodge banner.
“I left school at 15 and worked at Easington for 27 years,” he said. “I did more or less everything there in that time, and I finished when the pit finished in 1992.
“I’m at the Gala every year, and I want to see it continue.”
Guest speakers this year included the ever-popular left wing MP Dennis Skinner, and the general secretaries of four unions.
Further entertainment for the crowds was provided by music, stalls, and a funfair on the Racecourse.
Those for whom the temperature proved too high could cool down with free bottles of water provided by Northumbrian Water.
The good weather was matched by the general good nature of the crowd.
Police reported few arrests by mid-afternoon, although one man was ‘in the cells, drying out’ after jumping into the River Wear.
By lunchtime many people were already heading home, or heading back into Durham for the afternoon Gala Service in the cathedral.
Dave Hopper, general secretary of the Durham Miners’ Association, is determined there will be another Gala next year, and in the years to come.
“The cost is increasing each year,” he said. “For example, £26,400 is spent on subsidising the brass bands which are an essential feature of the day.
“The association no longer has subscriptions to its funds from working miners, and it is obvious we cannot fund the Gala indefinitely.
“But I am confident there are sufficient friends in County Durham and elsewhere who want it to continue.”
Anyone wanting contribute to the cost of future Galas can do so online: www.durhamminers.org
Source – Sunderland Echo, 13 July2014