Ed Miliband has said that energy firms are bringing in “unearned, unexpected profits” due to Russia’s invasion of Ukraine driving up gas prices.
Labour’s shadow secretary of state for climate change and net zero told BBC Breakfast this morning that the long-term answer is to move away from fossil fuels quickly by increasing on-shore and off-shore wind and solar energy systems.
He added: “My regret is not just that we don’t have a proper windfall tax, we don’t have a government committed to that green sprint either.”
It comes after energy group Centrica posted a surge in earnings this morning as the owner of British Gas continues to profit from rising energy prices.
Centrica made a statutory operating profit of £6.5 billion it was announced for the first six months of this year, an increase from a £1.1 billion loss in 2022.
The figures were boosted by a 900 per cent surge in profits at British Gas, which made £969m from January to June up from £98m a year ago.
The profit boom comes largely because of a change to the regulator Ofgem’s energy price cap which sees the supplier to recoup some of the costs of supplying its 10 million customers during the energy crisis.
Centrica chief executive Chris O’Shea, who faced anger over his £4.5m pay packet earlier this year, said: “Nothing is more important than delivering for our customers — it’s why we are here. Today’s results allow us to increase our customer support package to more than £100m, and the new green investment strategy we’ve announced will see us invest several billion pounds in the energy transition, creating thousands of new well-paid jobs.
“Our robust balance sheet has allowed us to invest heavily in the UK and Ireland’s energy security and will make sure that our customers have cleaner energy at the right price”.
Conversely, energy giant Shell has reported a drop in profits, down from its results a year ago, due to the drop in energy prices this year.
Adjusted earnings at Shell roughly halved in the second quarter of 2023 from the preceding year, but that still left the company with profits of £3.86 billion.
In response, the TUC has blasted the UK government for allowing energy companies to “laugh all the way to the bank”.
TUC General Secretary Paul Nowak said: “While families across Britain have struggled to pay their bills, energy companies have been allowed to laugh all the way to the bank.
“The government could have imposed a proper windfall tax on excess profits. But instead it has chosen to leave billions on the table.
“This was a political choice that has benefited shareholders instead of hard-pressed households. Big oil and gas have gotten away with treating the public like a cash machine.
“Our failing energy retail companies should be brought into public ownership. That’s the way to bring down bills and invest in home improvements.”
Liberal Democrat leader Sir Ed Davey has also responded: “It beggars belief that after all these months this Conservative Government is still allowing energy firms to rake in extraordinary profits while millions of families struggle.”