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
Property
house + home
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Life and Style
Bats detect and react to wind speed and direction through sensors on their wings
tech
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
News
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Sport
football
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living