Britain’s big gas and electricity producers are reportedly on track to make excess profits of up to £170 billion over the next two years.
Energy sector profits are under scrutiny amid the worsening cost of living crisis, with one of the main forecasts warning that inflation could soar to 22% next month. next year.
Conservative leadership candidates Liz Truss and Rishi Sunak are under increasing pressure to freeze the energy price cap hike or agree to a huge expansion in financial support to ease the pain of soaring bills.
Analysis of Treasury leaks shows huge potential excess profits for gas producers and power producers in the next two years, according to Bloomberg News.
It would show around 40% of excess profits will go to large power generators, although gas and power providers face skyrocketing wholesale costs as supply from Russia seizes up.
But the Treasury said it did not recognize the numbers. Government spokesperson: “We do not recognize this analysis. The government has made it clear that it wants to see the oil and gas sector reinvest its profits to support the UK economy, jobs and energy security.
They added: “We also expect our new energy profit tax to raise an additional £5bn in its first year to help pay for our £37bn household support package.”
Labor and the Liberal Democrats have called for an increase in the windfall tax on profits from the oil and gas sectors to help pay for the energy price cap freeze this winter.
It comes as the latest poll shows 82% of the UK public support freezing the energy price cap at £1,971 a year.
The Deltapoll survey also found that one in four people ‘certainly’ won’t be able to afford the impending rise to over £3,500, while 40 per cent said they ‘probably’ wouldn’t be able to afford it. additional costs.
Small business owners have warned they face a 400 per cent rise in their energy bills, with pub bosses warning many will be forced to close this winter.
The Treasury has drawn up plans for a business rate rebate to help small businesses with rising energy bills – a program similar to the Covid business rate relief program, according to the i newspaper.
Boris Johnson said on Wednesday Britain was ‘absolutely not’ broken at the end of his term as prime minister – saying the country ‘has it all’.
“Look at where people want to invest,” he told broadcasters. “Which country attracts more venture capital investment today than China? This is the UK… Why do people want to come here? Because this is the place to be.
Johnson claimed his successor – whether it’s Truss or Sunak – will announce a new “what he’s going to do is provide an extra package of support to help people with the cost of energy “.
Truss has not yet committed to making further direct payments to ease the pain of rising bills, but she would consider bolstering support for the most vulnerable through the benefit system.
Truss and Sunak will make a final push to win over Conservative party members in the final campaign at Wembley Arena on Wednesday night, before voting closes at 5 p.m. Friday.
Sunak warned there was a risk markets could lose faith in the UK economy – as he said he struggled to see how his rival plans “add up”.
In an interview with the FinancialTimesSunak said it would be “complacent and irresponsible” for a prime minister and chancellor “not to think about the risks to public finances”.