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POLITICS: 'Hard-up' companies paying out bumper dividends.

Energy companies were under fire yesterday after it emerged the biggest suppliers increased dividend payouts to shareholders by pounds 257 million last year.

The six biggest companies paid pounds 1.635 billion in dividends - a 19 per cent increase on the 2006 total of pounds 1.378 billion, research commissioned by the Local Government Association (LGA) revealed.

LGA acting chairman Sir Jeremy Beecham said the figures demolished claims by companies they needed to protect profits to invest in new forms of energy.

"This research torpedoes the energy companies'justification for their profits," he said.

The disclosure comes as the Prime Minister ruled out cash handouts to struggling families.

Government sources said ministers would focus on long-term proposals including support for energy efficiency, which will be announced in a package of measures next week.

Chancellor Alistair Darling has resisted calls from trade unions and Labour backbenchers for a windfall tax to help households struggling with energy costs, arguing it would affect the competitiveness of the industry.

The LGA agreed, saying a more effective measure would be to require energy companies to finance a national home insulation programme for pounds 500 million-a-year for five years.

"This would allow energy firms to continue being profitable and provide the best long-term solution to cutting carbon emissions and fighting fuel poverty," Sir Jeremy said. "There are 10 million homes lacking basic insulation. Making these properties more energy efficient would knock pounds 2 billion off fuel bills each year and slash domestic carbon emissions a fifth.

"The Government and Ofgem (the regulator) should seize the opportunity to take a long-term solution to encourage energy companies to use their disproportionate dividends for a massive drive to insulate people's homes."

According to the research, Centrica increased its dividend from pounds 409 million to pounds 478 million, EDF from pounds 105 million to pounds 110 million, RWE Npower from pounds 37 million to pounds 250 million, and Scottish and Southern Energy from pounds 400 million to pounds 474 million.

E.ON, which paid no dividend in 2006, paid pounds 240 million. Scottish Power was the only one of the "big six" to cut its dividend pay-out with a reduction from pounds 427 million to pounds 83 million.

Age Concern director general Gordon Lishman said elderly people struggling to pay their heating bills would be angered at the scale of the dividend pay-outs.

"Many of the poorest pensioners will be outraged that whilst they are worrying about how to afford to heat their homes, energy companies continue to make significant profits and pay their shareholders increased dividends," he said.


The six biggest energy companies paid pounds 1.635 billion in dividends last year, a 19 per cent increase on 2006
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Publication:The Birmingham Post (England)
Date:Sep 6, 2008
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