Public Sector - Taxpayers foot rebate bill
Taxpayers footed the bill for more than a third of the #52m ‘rebate’ to customers of regional electricity companies on the sale of the National Grid, according to a National Audit Office report.
About #21m of the #52m refunded under the Conservative government came from the Treasury, as corporation tax and VAT reductions.
The companies were allowed to recoup nearly a third more of the #1.1bn discount by selling their Pumped Storage Business to the US company Mission Energy for #680m.
This was #380m more than the #300m which the companies lead the Department of Trade and Industry to expect they would receive – an estimate the department failed to check.
Regional electricity company directors and other employees with share options were ‘compensated’ for an expected drop in the value of their companies, as a result of the Grid’s flotation, by being allocated extra National Grid shares.
Some 40,000 employees shared #154m worth of shares, while just 900 senior managers and directors picked up #26m worth – between #38,000 and #358,000 each.
They turned down pleas from John Major’s government to ‘voluntarily forgo’ the handouts because of concern over the level of the utilities’ directors’ pay.