Anger as energy giants boost payouts

Energy companies are under fire after it emerged that the biggest suppliers increased their payouts to shareholders by £257 million last year.

The six biggest companies paid £1.635 billion in dividends last year - a 19 per cent increase on the 2006 total of £1.378 billion, research commissioned by the Local Government Association (LGA) revealed.

LGA acting chairman Sir Jeremy Beecham said that the figures demolished claims by the companies that they needed to protect their profits in order to invest in new forms of energy for the future.

He said: "This research torpedoes the energy companies' justification for their profits.

"The Government and Ofgem (the regulator) should seize the opportunity to take a long-term solution to encourage the energy companies to use their disproportionate dividend payments for a massive drive to insulate people's homes."

Age Concern director general Gordon Lishman said elderly people struggling to pay their heating bills would be angered at the scale of the dividend pay-outs.

He said: "Many of the poorest pensioners will be outraged that whilst they are worrying about how to afford to heat their homes, energy companies continue to make significant profits and pay their shareholders increased dividends."

However Garry Felgate, chief executive of the Energy Retail Association which represents the main suppliers, said it was up to individual firms to decide how much to pay in dividends in accordance with their business plans.

He said: "This payment to shareholders is not an alternative to the commitment by energy companies to invest tens of billions of pounds in Britain's energy infrastructure.

"Investment in energy efficiency is undoubtedly worthwhile, but without significant investment in infrastructure there may be no energy to save."

The disclosure comes as it emerged that the Prime Minister has ruled out paying cash handouts to families struggling with soaring fuel bills.

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