National Power joins tax revolt
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.National Power yesterday launched its campaign to be excluded from the windfall tax, arguing that since privatisation the company had raised nearly pounds 7bn for the taxpayer, more than twice the amount shareholders had received. However, the generator declined to follow the lead of British Telecom and the airports operator BAA by threatening legal action against the Government if it was included in the levy.
Keith Henry, National Power's chief executive, said: "A legal challenge is not high on our agenda. We feel it extremely unlikely that the Government would do anything illegal."
The company said it should be excluded from the tax because it was not a price-regulated monopoly, had not made excess profits and operated in a competitive market with an increasing proportion of revenue earned overseas.
Mr Henry also argued that the taxpayer had enjoyed a windfall gain from the privatisation of National Power because of the way the Government had sold it in two stages.
According to an analysis sent to the Chancellor, Gordon Brown, by the company, gains for the taxpayer from the sale of National Power totalled pounds 6.825bn to March 1996. This figure included pounds 3.86bn in net proceeds, pounds 265m of dividends on the 40 per cent stake the Government initially retained and pounds 2.1bn in corporation tax, VAT and National Insurance contributions.
Against that, the company said that shareholders benefited by pounds 2.86bn over the same period through dividends and the increase in market value. The figure does not include the pounds 1.2bn special dividend National Power paid last year.
National Power yesterday reported an 8 per cent fall in pre-tax profits last year to pounds 740m as its UK market share shrank from 32 per cent to 24 per cent and wholesale electricity prices fell 4 per cent.
The company forecast a further drop in market share this year to as little as 20 per cent as competition from independent generators increased. UK operating profits fell by pounds 70m last year to pounds 783m, but this was offset by an increase in overseas profits from pounds 15m to pounds 74m.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments