A waste of energy as Labour throws away its election advantage


Outlook Such is Labour's incompetence ahead of today's polls that Ed Miliband's coup on energy price caps is long forgotten by most voters.

That's pretty remarkable, given that yesterday, on the last day of electioneering, one of our biggest energy companies, SSE, admitted it made profits of nearly £3,000 a minute over the past year. An earnings increase of 10 per cent.

Its chief executive Alistair Phillips-Davies was at pains to point out that this had nothing to do with household bills. Revenues from what it calls its "retail" arm were actually down, he pointed out, because of all the competition out there.

In other words: the market is working. Move along, nothing to see here.

But we should look closer. It's true that customers switched 370,000 gas and electricity accounts from SSE due to its high prices. But in a company with more than 9 million accounts on its books, that's hardly terminal.

The truth is, profits also fell because we had a mild winter and prices are so high that customers were scared to turn up the thermostat. SSE's consumption numbers show electricity usage per customer fell 7 per cent and gas fell 15 per cent. That's a lot of money out of SSE's door.

To be fair, profit margins did also fall during the year on the retail business due to the costs of getting the energy into people's homes. But, of course, the beauty of the giants like SSE is that, increasingly, they make money doing that bit too.

So it's all the more important that, when looking at SSE's impact on our household wealth, we consider those other profits which come out of our energy bills – the ones it makes from its growing business running the monopoly electricity and gas networks. Here, profits leaped more than 9 per cent, including a huge 48 per cent in electricity transmission.

While we're at it, wholesale profits – generating electricity, producing and storing gas, which also comes out of our bills – also jumped by a quarter. Annoyingly, but understandably from SSE's lobbyists' perspective, the company does not reveal what its profit margins are on those two cashcows. Anyway, all that revenue from British homes and businesses means SSE will be paying dividends out to shareholders this year totalling £819.6m – £40m more than a year ago.

Will voters be happy? A survey by Energyhelpline.com last month asked people, if they were campaigning to be Prime Minister, what would be their top policies. Cutting bankers' bonuses was at the top, cited by 50 per cent. Hear hear.

But, in close second place, with 42 per cent support, were those who would campaign on Mr Miliband's energy price freeze. Now here's the thing: 2014 is shaping up to be an El Nino year, which some say suggests we're in for a cold winter. If they're right, the freezes on price per therm and kilowatt-hour from SSE and British Gas will be all-but forgotten as bills rise anyway and companies' profits leap.

Consumers will be furious as their quarterly statements arrive within weeks of the general election. The only question is this: will Labour be able to turn it to their advantage this time?

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
ebooksA special investigation by Andy McSmith
Life and Style
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Amazon misled consumers about subscription fees, the ASA has ruled
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn