The ‘big six’ energy firms collectively raked in profits of £3.74 billion in 2012 – a figure 74% higher than the sum the surplus they made before the general election in 2010.
According to data compiled by Labour, in just three years, Npower, British Gas, E.ON, EDF, Scottish Power and SSE have vastly increased their annual profit. During this period, consumer energy bills went up by over £300.
Shadow energy secretary Caroline Flint said David Cameron had failed to act on what she called “rip-off energy bills”.
She added, “He’s totally out of touch with millions of people and small businesses who are struggling with soaring energy bills. His failure to reform Britain’s broken energy market is leaving hard-pressed bill-payers massively out of pocket.
“With warnings of more price rises this winter, it’s clearer than ever that Britain needs a One Nation Labour government to break the dominance of the energy giants, protect the public from being ripped off and create a tough new energy watchdog with the power to force energy companies to pass on savings to consumers.”
When Labour leader Ed Miliband became energy secretary in Gordon Brown’s government in October 2008, the average dual fuel bill in the UK was £1,215. By 2011, after Chris Huhne had replaced him following the coalition’s general election win, this figure had decreased by £110.
Dual fuel bill prices have since risen to over £1,400, according to Ofgem, which recently came under fire from MPs on the energy committee, who said the energy regulator was “muddying the waters” for consumers over energy firms’ profits.
In 2012, Miliband said that it was his policies as energy secretary that helped lower bills, and David Cameron’s that made them go up. However after investigating this claim, fact-checking organisation FullFact concluded that “factors beyond the control of the energy secretary [were] likely to have had as much influence over both the cost of energy to the consumer and the profit made by energy companies as the policies that were pursued by either Ed Miliband or his coalition successors.”
Labour’s dissection of the big six’s profits has been described by the energy industry’s trade body as “disappointing and inaccurate bashing”.
“If a company is to stay in business it has to make a profit. And the more a company has to invest then it has to make more profit to do so”, said Angela Knight, chief executive of Energy UK.
“What is actually needed is a clear, sensible and coherent debate on what people want, how much wind power and how much gas, nuclear and coal is needed, what capacity is required and, critically, how much people are prepared to pay for it all.
She added, “Petty point scoring has no place in the adult discussion and decision making required.”