{"id":230233,"date":"2016-03-09T11:18:55","date_gmt":"2016-03-09T11:18:55","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/?p=230233"},"modified":"2016-03-09T11:18:55","modified_gmt":"2016-03-09T11:18:55","slug":"uk-energy-firms-rake-profits-fuel-poverty-escalates","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/latest-news\/uk-energy-firms-rake-profits-fuel-poverty-escalates\/","title":{"rendered":"UK energy firms rake in profits as \u201cfuel poverty\u201d escalates"},"content":{"rendered":"

Via WSWS<\/a>. This piece was reprinted by RINF Alternative News<\/a> with permission or license.<\/p>\n

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Emily Wilson and Robert Stevens<\/h5>\n

British Gas, the UK\u2019s largest domestic energy company, has reported a 31 percent increase in profits for 2015. The firm\u2019s profits rose to \u00a3574 million from \u00a3439 million the previous year. British Gas supplies energy to 10 million domestic customers and is part of the \u201cBig Six\u201d private energy firms operating in the UK.<\/p>\n

Iain Conn, chief executive of Centrica, the parent company of British Gas, defended the profits increase under conditions in which there has been a sharp fall in the wholesale price of gas. He said, \u201cWe saw a very mild 2014 and we saw a more normal 2015 so therefore the amount of energy that our customers used went up and therefore the actual total profit went up.\u201d<\/p>\n

Conn claimed that savings due to the falling wholesale price of gas had been passed onto the consumer. This was challenged by David Hunter, an energy analyst, who said, \u201cWith prices slashed by only 5 percent, standard tariffs are barely more competitive than they were, and still a long way off the fall in wholesale prices. With these tariffs still up to \u00a3450 a year more expensive than the best deals, consumers are being left out of pocket.\u201d<\/p>\n

In recent years, British Gas annual profits averaged \u00a3584 million. According to estimates by the Competitions and Marketing Authority (CMA), which has been conducting an investigation into the UK\u2019s energy suppliers, consumers overpaid by \u00a34.2 billion a year between 2009 and 2013.<\/p>\n

As its soaring profits were declared, British Gas announced it would cut another 500 jobs, mostly in its energy efficiency business. These will affect jobs at sites in Leeds, Oxford and Leicester.<\/p>\n

A total of 28,000 people work for British Gas in the UK and the latest cuts follow the announcement in July 2015 by Centrica that it will slash 6,000 jobs. Centrica, which also operates in several other countries, said most of the jobs would go in Britain. As with the latest job cuts, last year\u2019s were announced alongside huge profits. In the first half of last year, Centrica recorded a doubling of profits to \u00a31 billion. Half of this came from its British Gas arm.<\/p>\n

The job losses are part of a restructuring operation, with the firm planning \u00a3750 million of annual cost cuts by 2020. Conn announced that he expected to achieve \u00a3200 million in savings by the end of 2016. This will be carried out in large part by cutting 3,000 jobs, with 2,000 of those are expected to come from the UK, including jobs in the North Sea.<\/p>\n

Millions of customers struggling to pay skyrocketing bills will be disgusted with the comments of Mark Hodges, Managing Director of British Gas ,<\/em> who said of the latest job cuts, \u201cWe must ensure that our costs allow us to be more competitive for our customers.\u201d<\/p>\n

On the news of its profit surge and job losses statement, the share price of British Gas rose nearly 7 percent.<\/p>\n

Further job losses among the Big Six were announced Tuesday, with 2,400 jobs to go at Npower. These represent a fifth of its global 11,500 workforce. Npower is owned by German group RWE and employs 7,500 in the UK. Npower is making the redundancies in response to a loss of \u00a399 million in its domestic energy business for 2015, compared to a profit of \u00a3183 million a year earlier. RWE said the cuts were part of a “radical restructuring.\u201d<\/p>\n

In December, Npower was fined \u00a326 million by the energy regulator, Ofgem, for \u201cfailing to treat customers fairly.\u201d This was the second such fine levied against the firm.<\/p>\n

As is now routine, the trade unions proposed nothing to defend a single job. When the 6,000 job losses were announced at Centrica, GMB national officer Gary Smith could have been speaking for the company when he said it was a \u201cday of deep concern across British Gas,\u201d but the \u201cfocus on the long-term and investment in customer service\u2026 gives us room for optimism over front-line jobs.\u201d<\/p>\n

Paresh Patel of the Unite union said only that \u201cany compulsory job losses should be kept to a minimum\u201d and the \u201creduction of the workforce should be made either through natural wastage or voluntary means.\u201d<\/p>\n

Such is the high cost of energy in the UK today that millions of families face the scourge of fuel poverty. Research published by the National Children\u2019s Bureau last month found that there are now almost four million children in England alone living in fuel poverty. It documented that \u00a310 million per year was being spent on treating patients with health conditions caused or worsened by living in cold, damp housing. Tragically, the report records that 117,000 people have died as a result of living in the cold and damp.<\/p>\n

These conditions are the direct result of privatisation of the electricity industry, began in 1990 under the Conservative government of Margaret Thatcher. Since then, the privatised companies have reaped billions and billions in profits, as bills for households have shot through the roof, with millions of people simply unable to pay mounting fuel costs.<\/p>\n

The Blair-Brown Labour governments from 1997-2010 maintained the privatised monopoly of the big energy firms.<\/p>\n

In his campaign for the Labour Party leadership last year, Jeremy Corbyn promised that a Labour government would bring the energy industry under government control. He said in one speech, \u201cI would want the public ownership of the gas and the National Grid\u2026 I would personally wish that the big six were under public control, or public ownership in some form.\u201d<\/p>\n

The Financial Times<\/em> noted, \u201cThat would have seen a Labour government nationalising British Gas, SSE, Eon, Scottish Power, EDF, Npower and the National Grid.\u201d<\/p>\n

Corbyn, who has since retreated on all the main planks he was elected on, ditched this policy even before a month was out. On September 29, Lisa Nandy, Labour\u2019s shadow energy secretary, told the party\u2019s annual conference, \u201cJeremy and I don\u2019t want to nationalise energy. We want to do something far more radical. We want to democratise it.\u201d<\/p>\n

This deliberately amorphous statement boiled down to a policy, said Nandy, of communities around the country being encouraged to generate their own \u201cclean energy,\u201d via \u201ccommunity-based energy companies and cooperatives.\u201d<\/p>\n

Labour under Corbyn remains a party of big business, with the FT commenting that Corbyn\u2019s climb-down was the \u201clatest example of his radical ideas disintegrating on contact with the rest of the Labour party [leadership].\u201d<\/p>\n

According to the Guardian<\/em>, the Competitions and Marketing Authority, following an 18-month investigation into the activities of the main energy suppliers, \u201cis expected to announce next week that it has ditched plans to introduce a wide-ranging price cap on energy bills after fierce lobbying from the big six suppliers.\u201d<\/p>\n

The newspaper noted that the watchdog \u201chas already retreated from other, bolder moves that it threatened to make, including the breakup of large firms such as Centrica and SSE that dominate the wholesale as well as the retail markets.\u201d<\/p>\n

In response, shares in Centrica rose by 4.5 percent. Centrica was already relaxed about whatever the CMA\u2019s review would conclude with Ian Conn stating in February, \u201cI don\u2019t really fear the outcome.\u201d<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Via WSWS. This piece was reprinted by RINF Alternative News with permission or license. Emily Wilson and Robert Stevens British Gas, the UK\u2019s largest domestic energy company, has reported a 31 percent increase in profits for 2015. The firm\u2019s profits rose to \u00a3574 million from \u00a3439 million the previous year. British Gas supplies energy to […]<\/p>\n","protected":false},"author":1,"featured_media":230270,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[487,18],"tags":[],"class_list":{"0":"post-230233","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-breaking-news","8":"category-latest-news"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/230233","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=230233"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/230233\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media\/230270"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=230233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=230233"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=230233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}