The UK’s ‘Big Six’ energy companies made over £3billion in profit in 2020

The UK’s biggest energy companies made over £3billion in profit in 2020, a sum nearly as big as the council tax rebate offered by chancellor Rishi Sunak to fight soaring bills.

Known as the “Big Six”, the companies including EDF Energy, E.ON UK, and British Gas’s parent company Centrica, recorded profits of £3.06billion, according to their most recent accounts.

Sunak’s £9billion package in response to the energy price cap rising by over 50 per cent includes £5.5billion in repayable energy bill discounts and a £3.6billion council tax discount targeted at those living in lower-value properties.

Miriam Brett, director of research and advocacy at Common Wealth, told the Big Issue the profits highlighted the need for a publicly-owned energy system.

“With all households facing an eye-watering rise in their energy bills, a windfall on the profits of the energy companies can give people immediate relief,” she said. “But the long term solution is public ownership to deliver a clean, secure, energy system.”

A Big Issue analysis of the most recent Companies House accounts available for the firms – E.on UK, SSE, EDF Energy, Scottish Power, and Centrica – found their profits totalled nearly £100 per second.

Only EDF Energy made a loss, while SSE’s profits were over £1bn. In France, where EDF is owned by the state, the government forced the firm to take a £7bn hit to protect consumers against rising bills.

The figures, taken from the publicly available accounts for the companies, show how much profit is being made by the overall company – with activities including not just sales of gas and electricity to UK customers, but often sales of energy as commodities on global markets.

Numbers published by Ofgem, the UK energy regulator, show that the companies made a combined profit of £800million from their regulated activities.

Brett added: “The Big Six have paid out the equivalent of 82 percent of their pretax profit in dividends over the past five years. Meanwhile, their effective tax rate has been just 13 percent over the same period.

“It is abundantly clear that, far from starting with this crisis, the current approach to the ownership and operations of energy companies points to deeper, systemic failures of the privatised energy markets.”

Connor Schwartz, climate lead at Friends of the Earth, said: “Fossil fuel companies are raking it in while people are choosing between food and heating, so the question again has to be asked: why isn’t there a windfall tax on these companies?”

A surge in the price of oil and gas also led to energy giant Shell announcing £12.5billion in annual profits, with its chief executive hailing a “momentous year.”