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    Energy chiefs warned to invest in UK's future


    August 12, 2022 - By Martin Beckford, John Stevens and Tom Witherow

     

      LIZ Truss suggested last night that she would rule out a windfall tax on energy giants if she became prime minister as she declared that profit was not a dirty word.

      The Tory leadership frontrunner said the Left-wing approach of 'bashing business' would drive away investment from the UK.

      Asked about the billions now being made by oil and gas firms, she replied: 'I don't think profit is a dirty word. And the fact it has become a dirty word in our society is a massive problem.'

      She told 2,000 Tory Party members: 'In this audience, we have hundreds of people who run businesses and make a profit and I think that's a good thing.'

      Miss Truss spoke out after other ministers appeared to warn the power companies that a bigger windfall tax was still on the table if they failed to plough their profits into homegrown power generation to bolster the UK's energy security.

      Miss Truss conceded that if the companies broke the rules they should be held to account, but went on: 'The way we bandy around the word profit as if it is something that's dirty and evil, we shouldn't be doing that as Conservatives. We're playing into the hands of people like Jeremy Corbyn, who want to completely undermine our way of life.'

      At the sixth of the 12th party husting events - the biggest so far, with party members filling a conference hall at Cheltenham Racecourse - the Foreign Secretary also hit out at Gordon Brown-style approaches to tackle the rising cost of living.

      'My first port of call is always reducing taxes, because I think having a money-go-round where you take off money in taxes and give it back in benefits is fundamentally a bad approach,' she said.

      It came as Rishi Sunak told The Times he was prepared to allocate up to £10billion to cover rising energy bills.

      The pledges follow dire predictions that average household bills could top £5,000 per year.

      Nadhim Zahawi summoned bosses to Downing Street to pressure them to plough their profits into homegrown power generation to bolster UK energy security.

      The Chancellor, joined by Boris Johnson and Business Secretary Kwasi Kwarteng, told the executives the Government 'continues to evaluate the extraordinary profits' in the industry and that they must 'act in the interest of the country'.

      The comments were seen as a thinly veiled threat that the current £5billion windfall tax could be extended if firms hand bumper payouts to shareholders, and do not invest profits into renewables, nuclear and biomass.

      A Treasury source said that 'extraordinarily high bills will ultiyesterday's mately damage energy companies'. Yesterday, experts at the energy consultancy Auxilione said they expected household bills to hit £4,467 per year from January, and £5,038 from April. The attendees at crunch meeting included Michael Lewis, the £1million-a-year CEO of E.on, Tom Glover, UK chief at German renewable giant RWE, and Clare Harbord of power generator Drax, as well as representatives of the industry regulator Ofgem.

      Drax took in £225million before tax in the first six months of 2021 while RWE recorded an adjusted net income of £1.3billion over the same period.

      E.on UK made adjusted earnings of £245million before interests and tax for January to June of this year. However BP and Shell, which have recorded multi-billion-pound profits, were notable absences.

      After the meeting Mr Johnson said: 'We know that this will be a difficult winter for people across the UK, which is why we are doing everything we can to support them and must continue to do so.

      'Following our meeting today, we will keep urging the electricity sector to continue working on ways we can ease the cost of living pressures and to invest further and faster in British energy security.'

      Mr Zahawi said that the industry leaders had agreed to work with the Government 'in the spirit of national unity'.

      An energy industry source claimed the message was clear: 'Prove you're investing enough or we might have to reluctantly impose [a] windfall tax.'

      Projections for how high the price cap could get in January and April have climbed alarmingly. Wholesale prices are now up to 15 times higher than in 2020. The Government has stepped in with a £400 bill rebate for all households, and up to £800 extra cash for the poorest families.

      Dhara Vyas, of Energy UK, which represents the industry, said the sector was committed to working with the Government 'to see what measures can be put in place to reduce the burden on customers.'

      French EDF is half as costly BRITISH customers of energy company EDF are paying more than twice as much as their French counterparts.

      Britons with the French energy giant have had their bills capped at £1,971 by regulator Ofgem.

      Yet French customers on regulated tariffs are facing costs of just €950 (£804), the Daily Telegraph reported.

      It comes after president Emmanuel Macron imposed strict caps on price increases amid the cost of living crisis He told EDF, which is largely owned by the state, that it can increase bills by only 4 per cent - meaning French customers could end up facing costs of €988 (£836).

      The French government has also forced the firm to sell electricity generated by its nuclear reactors to rival suppliers to maintain low prices.

      Truss 'to be creative PM'

      PAGE 18

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