Friday, July 29, 2022
Energy firms profit at expense of ordinary families
With average annual energy bills predicted to hit £3,850 from January, triple the level at the beginning of this year, one would have thought that the energy companies are also struggling with market forces. Alas, nothing could be further from the truth.
The Guardian reports that Shell and Centrica have sparked outrage by announcing huge windfalls.
The paper says that Shell posted record earnings of $11.4bn (nearly £10bn) for the three-month period from April to June and promised to give shareholders payouts worth £6.5bn. At the same time, Centrica, the owner of British Gas, reinstated its dividend, handing investors £59m, after reporting operating profits of £1.3bn during the first half of 2022:
More than 8m households – one in three in the UK – will fall into fuel poverty after October’s price cap rise, according to National Energy Action. Fuel poverty is defined as spending more than 10% of household income on energy.
The Conservative MP Alec Shelbrooke told PoliticsHome on Thursday he had seen “absolute fear” in the eyes of his constituents and was “not sure” how his own family would pay their bills.
On Thursday, the UK’s three leading debt charities – Citizens Advice, the Money Advice Trust and StepChange – called on Ofgem to improve protections for consumers who owe money to their energy supplier, including cracking down on “harmful” debt collection practices.
Joanna Elson, the head of the Money Advice Trust, which runs National Debtline and Business Debtline, said: “Further targeted support is needed for the many people already unable to afford their energy bills and for those on the lowest incomes, including significantly raising benefits.”
An Ofgem spokesperson said: “Protecting consumers during these very difficult times is our top priority and we are doing all we can to hold suppliers to account on supporting their customers.
“Recently we reviewed all suppliers to make sure they were charging direct debits fairly, have told them to review the highest increases and asked some to make immediate improvements in how they handle them.”
Earlier this week, MPs on the business and energy select committee called for the energy price cap, introduced in 2019 in an effort to combat profiteering, to be replaced by a “social tariff”. This would involve the poorest households receiving discounted energy, with the cost funded either through taxation or spread between more well-off bill payers.
The MPs said millions of people would be plunged into unmanageable debt without further government help.
The government can no longer sit on the sidelines. They need to implement a tax on these excessive profits, abolish VAT on energy, and introduce a social tariff instead of the price cap. After all, these energy companies can afford it.
The Guardian reports that Shell and Centrica have sparked outrage by announcing huge windfalls.
The paper says that Shell posted record earnings of $11.4bn (nearly £10bn) for the three-month period from April to June and promised to give shareholders payouts worth £6.5bn. At the same time, Centrica, the owner of British Gas, reinstated its dividend, handing investors £59m, after reporting operating profits of £1.3bn during the first half of 2022:
More than 8m households – one in three in the UK – will fall into fuel poverty after October’s price cap rise, according to National Energy Action. Fuel poverty is defined as spending more than 10% of household income on energy.
The Conservative MP Alec Shelbrooke told PoliticsHome on Thursday he had seen “absolute fear” in the eyes of his constituents and was “not sure” how his own family would pay their bills.
On Thursday, the UK’s three leading debt charities – Citizens Advice, the Money Advice Trust and StepChange – called on Ofgem to improve protections for consumers who owe money to their energy supplier, including cracking down on “harmful” debt collection practices.
Joanna Elson, the head of the Money Advice Trust, which runs National Debtline and Business Debtline, said: “Further targeted support is needed for the many people already unable to afford their energy bills and for those on the lowest incomes, including significantly raising benefits.”
An Ofgem spokesperson said: “Protecting consumers during these very difficult times is our top priority and we are doing all we can to hold suppliers to account on supporting their customers.
“Recently we reviewed all suppliers to make sure they were charging direct debits fairly, have told them to review the highest increases and asked some to make immediate improvements in how they handle them.”
Earlier this week, MPs on the business and energy select committee called for the energy price cap, introduced in 2019 in an effort to combat profiteering, to be replaced by a “social tariff”. This would involve the poorest households receiving discounted energy, with the cost funded either through taxation or spread between more well-off bill payers.
The MPs said millions of people would be plunged into unmanageable debt without further government help.
The government can no longer sit on the sidelines. They need to implement a tax on these excessive profits, abolish VAT on energy, and introduce a social tariff instead of the price cap. After all, these energy companies can afford it.
