On eve of new price cap Unite research confirms ‘rampant corporate profiteering’ fuelling soaring energy bills
- Thursday 25 August 2022
UK’s energy giants and gas and electricity suppliers plundered our energy networks in 2021 for more than £15 billion in profits.
At least 30 per cent of the Ofgem price cap increase is made up of profit for energy giants.
When the Ofgem price cap increase is announced on 26 August, there will be huge public controversy about both the scale of the increase and what is to be done about it. Until now, there has been no independent comment about why these soaring prices are being inflicted upon us. Explanations by the UK’s energy giants absolve them of responsibility - its world prices or the war in Ukraine.
New research by Unite has established that rampant corporate profiteering by Britain’s supply and distribution networks is feeding the country’s soaring energy costs.
‘Unite investigates’ has established that the major energy suppliers, distributors and generators have made £15.8 billion in profits in the last year.
UK’s Big 4 energy suppliers - Centrica, E.on, EDF and Scottish Power - made £9.5 billion profits. This is up 84 per cent on pre-pandemic profits.
The less well-known electricity and gas distributors - the ones that take energy to the grids - have made bonanza profits in 2021 of £6.3 billion – with huge long-term operating profit margins of over 40 per cent.
This involves less well-known companies like Northern Powergrid, owned by Warren Buffett’s conglomerate Berkshire Hathaway, and UK Power Networks owned by CK Hutchison, the Hong-Kong based holding company that owns Felixstowe Ports.
According to Unite’s new research this massive joint profiteering throughout the supply chain accounts for at least 30 per cent of the hike in the energy cap during the last year.
Unite general secretary Sharon Graham said: “People will be flabbergasted when the new energy cap is announced. No doubt. And no wonder. But what Unite has established in our new research is that rampant corporate profiteering is at the very heart of soaring energy bills and Ofgem’s soaring price cap. There can be a hundred remedies about what is to be done. Unless we deal with this corporate looting of our energy networks, we will return to square one again and again. Privatisation has ended in tears for almost all of us.”
Unite believes that the experience of the last year raises grave doubts about whether the current system of regulation can ever control the supply and distribution giants’ insatiable thirst for profit.
Unite national officer for energy, Simon Coop, said: “Ofgem is a regulator which doesn’t regulate. It appears to simply be passing the parcel of the energy giants’ profits directly on to the consumer. It’s clear that piecemeal action will not solve the scale of these problems. Sooner or later taking the energy giants back into public ownership will have to be contemplated.”
For media enquires ONLY contact Unite communications officer Ryan Fletcher on 07849 090215.
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Unite is Britain and Ireland’s largest union with members working across all sectors of the economy. The general secretary is Sharon Graham.