UK electricity distribution firms are funnelling multi-billion-pound profits into the pockets of shareholders, it has been claimed.
The six firms who run cables around Britain – including Scottish Power and SSE north of the border – made annual average profit margins of 32 per cent over the last six years according to the Energy and Climate Intelligence Unit (ECIU) think tank.
That equates to about £10billion on the nation’s energy bills between 2010 and the end of 2015 – or £27 per home per year.
The ECIU analysis found the distribution firms paid dividends to their shareholders during this time amounting to 15 per cent of turnover – roughly half of the final profit.
It means almost £1billion per year – or about £13 on the average domestic bill – went straight into the pockets of shareholders rather than being reinvested in infrastructure.
The shocking stats have been blasted by campaigners in Scotland.
Deputy director of fuel poverty charity Energy Action Scotland Barbara Atterson said: “No-one doubts that the energy business is complex and needs investment, but surely when we reach the point when almost one third of customers in Scotland cannot afford the basic products of gas and electricity, changes must be made.”
The Daily Record has repeatedly highlighted the huge profits being made by energy companies while families and vulnerable pensioners are being driven into fuel poverty.
Returns for comparable distribution companies in other European countries are often much lower, the ECIU claim.
The report alleged that France’s sole distribution company made a profit margin of just 5.9 per cent last year.
ECIU director Richard Black said: “Britain can be proud it has one of the most reliable power networks in the world. The lights aren’t going out and the network firms can take some of the credit for that. But this doesn’t require that we write blank cheques – and just as profits of the Big Six have rightly come under the magnifying glass, the companies operating the power cables deserve scrutiny too, particularly with such large chunks of dividends leaving the UK economy.
“The UK’s power sector is a murky world and it’s easy to blame green levies but that argument doesn’t really hold much water.”
A recent Citizens Advice report claimed businesses responsible for the UK’s electricity and gas networks were making £7.5billion in “unjustified profit” over an eight-year period.
The organisation argued that the money should be returned to consumers rather than shareholders.
A spokesman for the UK Government’s energy regulatorS Ofgem defended his organisation’s record.
He said: “Consumers get good value from Ofgem’s regulation. Network costs on bills have fallen by 17 per cent over the last 30 years.”
Shadow Scottish Secretary Lesley Laird MP said: “Working families deserve a fair deal.
“Labour will ensure energy bills are fair by capping energy prices and bringing the energy market back into public control.”