Energy companies pay £1.6bn to shareholders
Posted on: September 6th, 2008 by Alf Stephens
Pressure of windfall tax on energy companies is mounting further after the announcement of an increased dividend by some of the biggest suppliers. The dividend payment to the shareholders is being increased by £257m as compared to last year.
The Local Government Association or LGA has announced the results of a research commissioned by it. According to the research, the six big energy companies altogether paid its shareholders £1.635bn through dividends last year. It is an increase of 19 percent from 2006 when the total amount was £1.378bn.
According to LGA’s acting chairman, Sir Jeremy Beecham, the figures clearly indicate that energy companies continue to make huge profits in spite of high input costs. It puts to rest any claims by them that they need protection of their profits to be able to invest in newer forms of energy production.
The LGA wants that the energy companies should finance a nation-wide home insulation improvement programme for a five year term. The estimated costs of the programme work out to nearly £500m per year. According to LGA, the programme will help in fighting the fuel poverty. It will also maintain the profitability of energy companies and enable them to invest in renewable energy projects and cut down on carbon emissions.
Downing Street is working on a package to alleviate pressure on low-income households who are badly hit by the increased energy bills. Nearly 10 million UK homes lack basic insulation. Improving their energy efficiency would save £2bn by way of fuel bills per year and reduce their carbon emissions by 20%.
