UK citizens on benefits may have their energy debt cancelled, should they pay what they can in the meantime. But there’s a catch: everyone else in the country will pay for the relief through higher energy bills. That’s despite the UK energy sector, including corporate suppliers and the privatised network, making half a trillion pounds in profit since 2020.

The energy debt

The energy debt totals £4.4bn, reflecting the difficulties faced by low income people amid grotesque levels of inequality in the UK. According to an Oxfam report from 2023, the richest 1% hold more wealth than 70% of the entire country.

Under the Ofgem plan, £500m could be removed from the energy debt. The total debt rose by £750m from 2024-2025, reflecting the greedflation contributing to the cost of living crisis.

On 29 October, a committee of MPs called for the £4bn in excessive profits from the energy network to cover the citizen debt. They branded Ofgem’s response “completely inadequate”.

Long term solution

The real solution is to end energy profiteering altogether and bring suppliers and the network into public ownership. That would bring down bills for every individual and business in the country, provide cheaper borrowing costs and facilitate the transition to renewable energy through a Green New Deal. A Green New Deal could become a money-making asset for the government, paying for itself within a few years.

Since privatisation of electricity began in 1990, average prices have more than doubled from around 6p per kwh (14p in 2023 prices) to 30p per kwh in 2023, according to Ofgem and Hansard figures. Meanwhile, analysis shows that average gas prices increased by 143% between 1992 and 2022.

The lack of investment is another issue with profit-seeking private companies. From 2018-2022, UK Power Networks made profits of £2.4bn. Yet the Hong Kong conglomerate-owned company failed to invest in aging cables, causing three million litres of oil (that cools them) to leak into the environment.

Additional profiteering

The profits of fossil fuel companies go further than the surface. These corporate giants charge ridiculous amounts both for just being on standby and for delivering power in an emergency.

As Common Wealth noted, we’ve spent £12.5 billion through bill payments to fossil fuel firms simply for them maintaining their ‘capacity’ in the last ten years.

On top of that, VPI Energy charged, for example, an “astronomical” £5,750 per megawatt-hour (MWh) during a day in January 2025 when there would’ve been a blackout. In Europe, the market rate for gas was just €45 per MWh. And the so called regulator Ofgem is allowing this. The scam is reflected in our bills, with the average yearly payment rising to £1,849. This is why we cannot trust Ofgem to provide a viable solution to the energy debt crisis.

Public ownership is a no-brainer.

Featured image via Matthew Henry on Unsplash

By James Wright

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