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Storm brews over energy price rises and HMRC appointment of npower chief Storm brews over energy price rises and HMRC appointment of npower chief
(5 months later)
Controversy around Britain's energy industry will intensify on Monday amid revelations that the former head of a low-tax-paying power provider has been hired to help oversee HM Revenue and Customs (HMRC), and a warning that a new price regime demanded by the regulator, Ofgem, could still mean consumers paying £55m more a year than they should.Controversy around Britain's energy industry will intensify on Monday amid revelations that the former head of a low-tax-paying power provider has been hired to help oversee HM Revenue and Customs (HMRC), and a warning that a new price regime demanded by the regulator, Ofgem, could still mean consumers paying £55m more a year than they should.
RWE npower was at the centre of a storm last week after admitting it had paid £2m, £3m and nothing in tax in the years 2009-2011, but now it transpires that Volker Beckers, its former boss, has been appointed as a non-executive director at the HMRC.RWE npower was at the centre of a storm last week after admitting it had paid £2m, £3m and nothing in tax in the years 2009-2011, but now it transpires that Volker Beckers, its former boss, has been appointed as a non-executive director at the HMRC.
Ian Lavery MP, a member of the Commons Energy and Climate Change select committee, whose questioning led to npower's admission, said: "(Chancellor) George Osborne has serious questions to answer about why he has appointed the boss of an energy firm which paid no corporation tax in the last three years, despite making £766m in profits, to the board of HMRC. HMRC has a bad enough record at stopping tax avoidance as it is."Ian Lavery MP, a member of the Commons Energy and Climate Change select committee, whose questioning led to npower's admission, said: "(Chancellor) George Osborne has serious questions to answer about why he has appointed the boss of an energy firm which paid no corporation tax in the last three years, despite making £766m in profits, to the board of HMRC. HMRC has a bad enough record at stopping tax avoidance as it is."
EDF*OFF, a group set up to campaign against the dominance of the big six suppliers, says the Beckers row is deeply embarrassing for the HMRC at a time when it is trying to rebuild public trust following the departure of former head, Dave Hartnett, after signing much-criticised sweetheart tax deals with Goldman Sachs and then joining HSBC.EDF*OFF, a group set up to campaign against the dominance of the big six suppliers, says the Beckers row is deeply embarrassing for the HMRC at a time when it is trying to rebuild public trust following the departure of former head, Dave Hartnett, after signing much-criticised sweetheart tax deals with Goldman Sachs and then joining HSBC.
Mark Williams of anti-austerity campaigners UK Uncut added: "It is no surprise the government loses billions of pounds to corporate tax dodgers every year when they hire those same tax dodgers to oversee tax inspectors. HMRC should be throwing the book at people like Volker, not hiring them."Mark Williams of anti-austerity campaigners UK Uncut added: "It is no surprise the government loses billions of pounds to corporate tax dodgers every year when they hire those same tax dodgers to oversee tax inspectors. HMRC should be throwing the book at people like Volker, not hiring them."
Npower, which faces a petition signed by more than 93,000 people calling on it to pay more tax, has consistently denied tax dodging and says the low tax payments result from the fact that the German-owned company has been investing billions of pounds in new gas and other power stations.Npower, which faces a petition signed by more than 93,000 people calling on it to pay more tax, has consistently denied tax dodging and says the low tax payments result from the fact that the German-owned company has been investing billions of pounds in new gas and other power stations.
The Treasury has confirmed this can be legitimately written off against tax but independent tax specialists, such as Richard Murphy, have also questioned the necessity of some of the "interest payments" made by npower to its parent group RWE in Essen which also reduce the scale of npower's taxable profits. Npower says this is a cheap way to borrow money.The Treasury has confirmed this can be legitimately written off against tax but independent tax specialists, such as Richard Murphy, have also questioned the necessity of some of the "interest payments" made by npower to its parent group RWE in Essen which also reduce the scale of npower's taxable profits. Npower says this is a cheap way to borrow money.
The HMRC told the Guardian Beckers had been taken on under a public appointments process that involved rigorous vetting and disclosure of any conflicts of interest.The HMRC told the Guardian Beckers had been taken on under a public appointments process that involved rigorous vetting and disclosure of any conflicts of interest.
"Non-executive directors bring valuable external and commercial experience to HMRC. However, they are not responsible for the day-to-day management of HMRC, nor are they responsible for tax policy or for handling confidential individual or corporate taxpayer issues," said a spokeswoman."Non-executive directors bring valuable external and commercial experience to HMRC. However, they are not responsible for the day-to-day management of HMRC, nor are they responsible for tax policy or for handling confidential individual or corporate taxpayer issues," said a spokeswoman.
Meanwhile, analysis by Which?, the consumer group, reveals Ofgem's proposals to overhaul energy tariffs may mean more than 3.4m households end up paying over the odds for their energy as they struggle to identify the cheapest energy tariffs. This could see consumers collectively paying up to £55m more than they need to on their bills.Meanwhile, analysis by Which?, the consumer group, reveals Ofgem's proposals to overhaul energy tariffs may mean more than 3.4m households end up paying over the odds for their energy as they struggle to identify the cheapest energy tariffs. This could see consumers collectively paying up to £55m more than they need to on their bills.
Richard Lloyd, executive director at Which?, said: "These proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three-quarters of people being asked to compare prices that are not based on their energy usage."Richard Lloyd, executive director at Which?, said: "These proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three-quarters of people being asked to compare prices that are not based on their energy usage."
Which? is launching a digital campaign on Monday, asking consumers to come forward and pledge their support for single unit prices to simplify the tariffs.Which? is launching a digital campaign on Monday, asking consumers to come forward and pledge their support for single unit prices to simplify the tariffs.
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