Exclusive:British Gas profits: Jeremy Corbyn leads energy nationalisation calls after Centrica reveals near £1bn profits
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Former Labour leader Jeremy Corbyn is leading calls for energy nationalisation after British Gas owner Centrica posted almost £1 billion profits amidst the cost of living crisis.
The energy giant said underlying earnings at its gas and electricity supply arm leaped by a whopping 889% to £969 million in the six months to 30 June, from £98 million a year earlier.
It said the result was buoyed as Ofgem’s price cap in the first half of the year – when customers saw their bills limited to £2,500 a year under the Energy Price Guarantee – allowed it to recoup losses seen a year earlier to the tune of about £500 million.
This has sparked outrage from politicians and trade unions, as inflation and the cost of living crisis continue to heap pain on families, with calls for a greater windfall tax and even nationalisation.
Former Labour leader Corbyn, who is now sits as an independent MP, told NationalWorld: "It is ludicrous that energy companies can be allowed to make such extortionate profits while millions of people are struggling to pay their bills. This is not a cost-of-living crisis. This is a cost-of-greed crisis.
"It doesn’t have to be this way. There is an alternative: bring energy – as well as water, rail and mail - into public ownership."
Part nationalisation of energy companies was a key tenet of Corbyn's 2017 manifesto as leader, and the policy has only grown in popularity since the energy crisis over the last year. YouGov polling in May showed that around 64% of adults support public ownership of energy companies, while just 11% oppose.
This is likely to mount further pressure on Sir Keir Starmer, who has been criticised by left-wing party members who claim he is not diverging enough from Rishi Sunak. During his leadership election, Starmer said he supported "common ownership" of energy companies, but earlier in the year Shadow Chancellor Rachel Reeves revealed that Labour would only nationalise some rail firms.
While Zack Polanski, the Green Party's deputy leader, said that Centrica was making his party's policies even more popular. He told NationalWorld: "If nationalisation wasn't already one of the most popular Green Party policies there is - Centrica are very much supporting our case.
"For them to be making so much profit whilst so many people are struggling to pay their bills, shows our cost of living crisis for what it really is. A greed crisis."
NationalWorld recently reported that the International Monetary Fund said that rising corporate profits have accounted for almost half the increase in Europe’s inflation over the last two years.
While Labour's Shadow Climate and Net Zero Secretary, Ed Miliband, reiterated his party's call for a greater windfall tax on oil and gas companies. He said: "These figures demonstrate the continuing scandal of the Tory failure to act on the windfalls of war being pocketed by the oil and gas companies.
"Instead of asking energy giants to be nice, as he did yesterday, Jeremy Hunt should be fixing the gaping loopholes in the windfall tax on oil and gas profits.
"Labour would act to close loopholes and bring in a proper windfall tax on oil and gas giants to help tackle the cost of living crisis, alongside our plan to make Britain a clean energy superpower so we can lower bills for families and businesses."
Unite general secretary Sharon Graham also urged Labour to go further, and commit to bringing energy companies back into public ownership. She said: "We need to stop dancing around our handbags and grasp the nettle. The only way to end the chaos in our energy supply is staring us in the face - public ownership. It is absolutely affordable.
"It would protect businesses and households. Put simply, it’s a no brainer. Both the Government and Labour need to decide whose side are they on."
TUC general secretary Paul Nowak agreed: “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.”
Rishi Sunak insisted the current windfall tax was effective. The Prime Minister said: "I know that the number one challenge families are facing up and down the country is the cost of living, and in particular their energy bills.
"That’s why I took a decision back when I was chancellor to introduce a windfall tax on the energy companies, so we are now taxing these windfall profits of energy companies and we are using that money to help us pay around half of a typical family’s energy bill, particularly over the last winter.
"So that’s what we’re doing, taxing the windfall profits of energy companies and helping to pay around half of a typical families’ energy bill."
Centrica said: “All suppliers had to purchase a portion of their electricity and gas at levels above the price cap.
“Allowances to recover this cost were introduced into the price cap from April 2022, with recovery continuing into the first half of 2023.”
Big swings in energy prices helped the company’s energy marketing and trading division, which made £1.4 billion in profit during the year, a 1,900% increase from the year before.
An undercover investigation by The Times found that debt collectors broke into the homes of vulnerable British Gas customers to forcibly fit the meters.
Energy regulator Ofgem told all energy companies to suspend the forced installation of prepayment meters. It said that energy firms must get their “house in order”, with boss Jonathan Brearley saying that the regulator will not hesitate in taking the “strongest action in our power” if firms are found to carry out “poor practice”.