Soaring profits fires fair energy debate
The 'Big Six' power companies have been posting bumper figures while millions face fuel poverty
Customers of British Gas, UK's biggest energy company, yesterday woke up to higher bills.
Its latest increase in prices will add an average £80 to the cost of heating for the 9 million households who use the firm, pushing annual costs up to a record £1,346.
Customers will be warmed, no doubt, by the latest positive profit figures issued by Centrica, the global company which owns British Gas. The multi-national expects to make profits of £1.4bn this year. Analysts reckon British Gas will contribute some £575m to the pre-tax profit total.
That works out at around £67 per household customer. Is that too much profit? Many think so. There's growing anger at the bumper earnings posted by the energy companies while millions face soaring bills which leave them unable to afford to heat their homes.
Labour's shadow energy and climate change secretary, Caroline Flint, said: "People will not understand how the energy giants can get away with inflation-busting price rises this winter when they are making huge profits.
"Energy companies always blame price rises on wholesale costs, but with prices and profits both up, customers have 1.4 billion reasons to ask whether British Gas is really playing fair."
Earlier this week the UK's second-biggest supplier, Scottish and Southern Energy, announced a profits hike of 38 per cent. SSE was the first of the "Big Six" energy firms to increase prices in the recent round of hikes.
It increased charges by an average of 9 per cent in October, putting about 5 million electricity customers and 3.4 million gas customers a step closer to fuel poverty, when the cost of heating their home takes up a tenth of their income.
Npower is increasing prices from 26 November, while customers of EDF and Scottish Power will face higher bills from December. E.ON is set to raise prices by 11 per cent in January, according to some newspaper reports this week.
So are the big energy companies playing being fair with their customers? Are the prices they charge reasonable? How can tiddler Co-operative Energy – which only has around 60,000 customers – afford to CUT charges by 2 per cent next month, as it announced yesterday?
Audrey Gallacher, director of energy at Consumer Focus, said: "Consumers will be sceptical over supplier profits given questions over how justified recent price rises have been.
"We need profitable companies for our economy and to invest in energy infrastructure.
"But customers need to know that the relationship between costs, pricing and profits is fair."
The Independent – in conjunction with Policy Review Intelligence – will quiz energy firm bosses at a "fair energy summit" next month. It will bring together consumer groups, charities and other experts to look at how to give customers the confidence that they are paying a fair price for tenergy.
"What is needed now more than ever is for all the stakeholders to work together and discuss tangible ideas and solutions that would constitute a fair energy deal for consumers," said Gavin Hayes of Policy Review Intelligence.
The summit – supported by British Gas, Co-operative Energy and E.ON – will be held in London on 17 December, and readers are invited to send in their questions and comments to email@example.com as well as during a live internet broadcast.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 2 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 4 John Travolta addresses former pilot's gay romance allegations publicly for the first time
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Portuguese academic says British are 'filthy, violent and drunk'
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony