Ofgem, the so-called energy regulator, has announced that energy companies will be able to make even more profit from people and businesses. This means higher costs across the economy. This October, a change in the energy price cap means bills will rise by 10% or an average of £149 per year.
It’s another broken promise from Labour. In Keir Starmer’s manifesto he consistently pledged “we will bring down the cost of energy”.
Eye-watering profit thanks to energy price cap
At the same time as the price hike, energy companies Iberdrola (owners of Scottish Power), Equinor, Centrica (British Gas), EDF and Drax alone have made £240bn in profit since 2020.
Meanwhile, the BBC set the stage for Ofgem ‘CEO’ Jonathan Brearley to say the price hike is only so energy companies “can recover fair costs and a small profit”. This man is paid over £300,000 per year.
In July, the Labour government announced an increase in the Conservatives’ windfall tax or Energy Profit Levy from 35-38%. But it said in its manifesto this small increase is supposed to bring down energy prices.
Also in its manifesto, Labour admitted that “companies have benefitted from enormous profits not because of their ingenuity or investment, but because of an energy shock which raised prices for British families.”
Indeed, energy giants are among the multinationals that use market fluctuations as cover to raise prices and rake in profits well above the increase in their costs. This is known as ‘greedflation’.
ExxonMobil increased its average pre-pandemic profits from £15bn to £53bn. And Shell increased theirs from £16bn to £44bn.
Yet the 3% increase in the Energy Profit Levy, which comes in on 1 November, is all Labour have said they will do about it.
The solution would benefit the whole economy
The answer is bringing in a national, publicly-owned British energy provider and grid. This would remove the eye-watering profit from the human necessity of energy.
Labour’s Great British Energy is far from it. It’s essentially a vehicle to ‘de-risk’ private investment in renewables, with only £8.4bn in public investment over an entire parliament. This will then provide a backdrop for more rampant corporate profiteering.
Every single business and person in the country relies on energy to function. So decreasing energy costs can make every product and service in the economy cheaper. Such a natural monopoly should be publicly owned.
Featured image via Saul Staniforth – X
