Political battles have put investment by energy firms at risk

„In the court of public opinion, however, the industry has been found guilty. This is in no one’s interest. When the evidence is dispassionately examined, I believe the verdict will be viewed as harsh. The case for the defence is sound. No energy company wants to increase bills – it enrages customers, undermines loyalty and damages relationships. All energy companies support reduced consumption to decrease bills, through better home insulation and intelligent metering.

Energy companies directly control less than 20pc of the invoice that is paid. Increasingly, they have become cost transmitters and tax collectors. Profits are modest, rarely exceeding 5pc. Risks are large, both economic and political. The rise in bills has been driven by world wholesale prices, regulated transmission costs and green energy charges. (...)

Politicians from all parties have tried to win public support by suggesting measures to address escalating energy bills. Some propositions have had immediate populist appeal, but have been without economic logic. Capping prices when costs are driven by world markets, or imposing windfall taxes on profits, which range from modest margins to large losses, risk undermining our financial fabric. They have short-term voter attraction, but lay a pathway to long-term underinvestment and supply decay. (...)

Customers are at the heart of our business – it is in our interests that they are served efficiently and competitively. It is in the customers’ interest that we are able to sustain a profitable business that can supply them indefinitely. It is in the politicians’ interest to ensure our role in society is viewed correctly and regulated appropriately. It is in all our interests that we are judged fairly for the contribution we make to our society not only as an as energy supplier, but also as a taxpayer, employer, dividend distributor, and investor in the future of our country.