Energy giants’ profits continue to defy the laws of gravity


Matt Gordon

The next Chief Executive of Centrica, the parent company of British Gas, will be the aptly named Mr Conn, formerly of oil giant BP. Apt, because if making millions from what should be a publicly owned resource is not crooked enough, Centrica are currently arguing that a rise in profits is really a fall, and that these profit hikes are unrelated to the constant price hikes they have inflicted on millions of people.

The latest figures from Ofgem, the government regulator, show that energy companies will make a pre-tax profit of £106 per household in 2014, up from £53 last year – a doubling of profits! According to British Gas, they’ve “only” made £265 million in profits during the first half of the year, and dispute Ofgem’s figures.

This is in the context of energy usage falling which would otherwise cut profits – energy usage has of course fallen not only because of a mild winter but because rising bills, falling incomes and government austerity have forced working class people to cut back, with many being forced to choose between heating or food.

EDF, the French-owned energy supplier, has also seen profits in Britain go up by 9.5% for the first half of the year- which means that figures for the remaining members of the Big Six energy firms are likely to be similar.

Centrica have tried to say that Ofgem’s figures are wrong due to “methodological” differences. I don’t think so. But let’s have a trade-union led democratic body to investigate the accounts, and find out what the profits really are, and where the money of millions of customers has gone. Better still let’s nationalise the whole energy industry, turning it back into the public service it should be.

Labour’s response has been utterly inadequate, saying it was an example of the energy market not working and saying they would freeze energy bills until 2017. The energy market is clearly working, since the whole purpose of markets is to earn profits! The question is, are markets the best way to provide public services and to decide how best to use natural resources?

A re-nationalised energy industry could lower prices, not just freeze them when they are already too high, and keep them low permanently, and invest in green alternatives. Workers and consumers would have to democratically control this. We need a new, mass working class party to fight for these demands.