Tough new measures to rein in bankers' bonuses have been announced by City regulators. But will they really help to build a more responsible financial sector or will the Fat Cats still get their cream?
Profits soar at UK energy suppliers
Profits for the Big Six energy companies have leapt to more than one billion pounds since 2009, according to regulator Ofgem
Britain's Big Six energy suppliers have been accused of "profit grabbing" as figures from regulator Ofgem showed their earnings had multiplied five-fold to more than £1 billion since 2009.
It meant they pocketed an average of £53 profit per home last year, representing a margin of 4.3% - up from £30, or 2.8%, in 2011.
The figures show that together British Gas, E.ON, EDF, npower, ScottishPower and SSE recorded underlying earnings - before interest payments and tax - of £1.19 billion in 2012, up from £221 million in 2009.
They fuelled further anger over rising gas and electricity bills following recent steep tariff rises.
The figures come ahead of Ofgem chief Andrew Wright's appearance before the Commons energy select committee tomorrow.
Suppliers have blamed rising wholesale energy prices, higher distribution costs and Government green levies for the increases.
Labour has pledged a freeze on tariffs if it gains power. The coalition is widely expected to announce changes to the way it levies charges on bills to pay for energy efficiency measures.
But TUC General Secretary Frances O'Grady said: "Ofgem show excess profits are the real source of soaring energy bills.
"We also need to ask hard questions about why some ministers have been prepared to go along with energy company bosses in blaming green levies and help for the less well-off, when what has gone wrong is profit grabbing in a bust market."
John Allan, national chairman of the Federation of Small Businesses, said it was "truly worrying" that profit margins were often far higher than those paid by households at a time when they are trying to put the UK "back on a path to growth".
Shadow energy secretary Caroline Flint said: "There's no hiding the fact that on David Cameron's watch the energy companies have increased their profits on the back of spiralling bills for hard-pressed consumers."
Audrey Gallacher, director of energy at Consumer Futures, said: "The increase in supplier profits contrasts with declining affordability. The sector is riding out tough economic times better than its customers are, so there's a pressing need to help the latter."
A spokesman for the Department of Energy and Climate Change said: "Profits are a matter for energy companies to justify to their customers and shareholders, but profits are needed if they are to continue to invest in Britain's energy security and infrastructure.
"The Government is introducing more competition and more transparency in the energy market so that consumers get the best deal and have a clearer picture about where their money is going."
Energy UK, which represents the energy industry, said the figures did not take into account the costs of "huge investment" being made by energy companies and used profits calculated before interest payments and tax were deducted.
It claimed that Ofgem's figures about the reasons for tariff rises supported what energy companies had been saying.
"The main reasons customers have seen their household bills go up is because the cost of gas and electricity have gone up as well as other add-ons, such as the social and environmental policies, rising fast," Energy UK said.
Ofgem's figures showed the rise in profits in 2012 from the year before was partly explained by higher gas consumption during a period which was colder than average, compared to 2011, which was warmer than average.
It said bill increases in 2012 were caused by higher prices for gas and electricity on the wholesale market, up 14%, plus rising costs of transmission and distribution, and Government levies, up a combined 20%.
The report showed that from 2009, a number of loss-making domestic suppliers had moved from loss to profitability, as prices had "increased significantly".
It said there was "some evidence of rising profit margins" - attributed to higher prices and volumes rather than lower costs.
The report added: "It is not yet possible to assess whether this is a sustained trend or the result of unusual weather over the past three years."
Ofgem noted that all of the Big Six supply firms also generated power, where their businesses showed a profit margin of 19.9% in 2012.
However, the regulator said that this figure - which has been falling since 2009 - was "not too meaningful" since it did not take into account large sums required to invest in power stations.
Total profits across supply and generation fell by £133 million, or 3.4%, in 2012 compared to the previous year.
Ofgem has already introduced measures to try to introduce competition in the energy supply market, including the opening up of wholesale electricity for independent suppliers to be able to compete with the Big Six.
The regulator is currently carrying out an assessment and is due to publish its findings next March.
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Clearly David Cameron and this coalition of middleclass fraudsters have no intention of stopping the rot and decay which has transformed Britain; Alas, judging the labour party on their past performance, they are worse than the Tories. When Blair’s ‘New’Labour party had the opportunity of undoing the damage done by Thatcher, he chose not to. ‘New’Labour carried on down the same path, with the same goal, adding more and more noughts to the bank accounts of millionaires until they became billionaires.
There must still be some MP’s with enough sense to know, if left unchecked, this unbalanced society of an ever increasing divide between the extremely rich and poor, can only lead to escalating civil disorder, which will ultimately rip the country apart.
It’s time for these MP’s, who sit in Westminster to represent the voters who put them there, to forget party politics and work together, join together and form a new political party which puts their voters first.
recession what recession rich and wealthy get more and more money and power
whilst most of us struggle to pay ever rising food energy and other bills
but wont admit it we are really struggling
the fact is and i have asked thousands of ordinary folk do you have any money the answer is no
From another of todays MSN articles “The number of deaths linked to the cold weather soared by almost a third last winter”
And the number of cold related deaths will be even higher this year, as the not so well off sick and elderly struggle to keep pace with the ever rising cost of living.
Every single one of those people who died last winter had a Member of Parliament sitting in the House of Commons to represent them and work in their best interest.. It’s too late to save those people, but it isn’t too late to help those people who will die this winter without help.
This isn’t the Victorian era, its the 21st century and British people are freezing to death. Our elected governments give billions of taxpayer’s pounds to help the needy in every corner of the world, but continually ignore our own sick and elderly……if these MP’s aren’t in Westminster to help those in need, what are they there for.
all this profit and this is without the recent hike in charges
everybody should wait and pay their bill as late as possible in protest
and useless government needs to put a stop to the 50% of the profits
going to wealthy shareholders
What else would Ofgem say?
Just another bunch of jobsworth boys and girls.
It's YOU that voted for Maggie and the Conservatives.
It's YOU that VOTED for a private industry.
YOU can now pay the PRICE!
This is the result of YOU voting for Maggie and the Tories.
YOU voted to sell off a national industry.
YOU can now pay the PRICE!
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