Fury escalates as energy bosses scoop up ‘obscene’ profits but STILL raise fuel bills to record high

This is London | Jan 19, 2008

Energy suppliers were attacked yesterday for scooping a £9billion cash windfall at the same time as driving fuel bills to record highs.

MPs, consumer groups and poverty action campaigners described the bonanza as obscene.

The windfall comes from a complicated EU initiative called the Emissions Trading Scheme, designed to reduce pollution.

The electricity generators have been given ‘permits’ to emit climate-warming gases between 2008 and 2012, the second phase of the scheme.

Despite not paying for the permits, they have raised the price of wholesale electricity to reflect their supposed cost.

Ofgem, the energy regulator, estimates the firms will make about £9billion from this.

Their extraordinary payday comes as a typical family’s typical fuel bill has almost doubled over the last five years to £1,000.

Some four million Britons are living in “fuel poverty”, defined as those who spend more than 10 per cent of their income on fuel.

Over the last fortnight, two more energy companies have stung customers with inflationbustingprices rises of up to 27 per cent and Ofgem has urged ministers to use the windfall to help those struggling to pay their fuel bills.

But Chancellor Alistair Darling, who met Ofgem officials on Tuesday, is rejecting calls for a super-tax. It would be similar to the windfall tax imposed on privatised utilities after Labour’s election in 1997.

Energy companies including the German- owned Npower, which raised its prices a few days after Christmas, fiercely oppose the move.

Liberal Democrat leader Nick Clegg said: “It is totally wrong that the companies should be given a licence to print money on this scale.

“Electricity companies, which are already pushing up prices, should not be gifted with £9billion.

“With 25,000 people predicted to die from the cold this winter alone, the Government must act on the recommendations of its regulator.’

Alistair Buchanan, chief executive of Ofgem, said: “We said, ‘Look, there’s a £9billion windfall there and you could somehow take part of that to pay for your programmes for the fuel poor’.”

A spokesman for independent conbeensumer group Energywatch said: “How can Ofgem tell the Chancellor that the market is sound and then in the next breath say there is £9billion of unearned income sitting there that could be super-taxed without their heads spinning?”

Labour MP Elliot Morley described the profits as “obscene” in the Commons last week.