UK govt to put heat under energy suppliers after excess profits claim

UK Business Secretary Greg Clark said he would be investigating claims that energy suppliers were making larger profits than they claimed to.

Clark was responding to a report in the Sun newspaper on Monday that gas and electricity suppliers could be understating profits by as much as six times.

The newspaper cited a report it had obtained, written by accountancy firm PwC, and commissioned by industry body Energy UK, which said the average cost of supplying energy to a household - covering the cost of wholesale energy and sending bills - was £844 a year.

The Sun said 70% of customers are on standard variable tariffs, and pay up to £1,172 a year, which would leave the energy firms with a profit of up to £272, or 24%, after VAT is removed.

Clark said he would examine the evidence and ask Energy UK for a meeting.

"This report appears to confirm my concern that the big energy firms are punishing their customers' loyalty rather than respecting it," he told the newspaper.

“Customers who are loyal to their energy supplier should be treated well, not taken for a ride. They must treat customers properly — or be made to.”

The Sun report said Energy UK had “cherry-picked parts of the document” to produce a section on its website showing a bill’s breakdown — but made no mention of profits.

Lawrence Slade, chief executive of Energy UK, told the BBC: "The Sun's numbers are a complete misrepresentation of the facts.”

"You can't extrapolate in the way the Sun has. It's just not maths."