Energy Profits Round-Up

One point to clear-up. The oft-quoted figures of immense profits by the Big Six energy companies contrasted with the relative peanuts they pay in corporation tax tend to elide the difference between operational and pre-tax profits: with such tax not being required of the former.

So, it is, I suppose, technically correct to say that corporation tax should not be paid on £766 millions operational profits made by RWE N-Power over the past four years. All the same, it rankles when Paul Massara of this Germany-based provider of an essential service dismisses this as “nothing amazing” to a committee of MPs.

Likewise, heavy investment in the energy infrastructure is essential, and the Big Six and lesser companies are the most appropriate sources of such; with some degree of tax breaks or other offset measures being essential to encourage them to do so. The several billions needed to construction of a new power station will, through asset depreciation, lose much if not all of their value in a relatively short period of time.

Yet, such installations hardly will be white elephants. More like cash cows which generate the huge profits being discussed, which companies such as RWE N-Power shelter from corporation tax liability by agreeing to investment in schemes which generate further profit; or companies such as SSE increase by mis-selling products, resulting in the maximum possible fine by the regulator of £10 millions.

Another destination of such investment is wind/sea energy; in Scotland, at least, receiving further incentives from public funds to large landowners – inevitably, skewed towards the already wealthy – willing to situate windmills on their land.

Reported in the Daily Telegraph in February, Conservative MSP and opponent of doctrinal ‘renewables’ Struan Stevenson was scathing of the upwards of £10 millions which the Duke of Roxburghe alone could receive whilst ordinary householders pay for such subsidies through ever-increasing fuel costs.