The boss of the UK’s largest household energy supplier has been forced to defend record profits amid warnings of worse times ahead for household bills this winter.
In evidence to the energy security and net zero committee of MPs, the chief executive of British Gas parent firm Centrica, Chris O’Shea, insisted the 889% surge in profits for the first half of this year were not a consequence of rip-off bills.
He explained it reflected a one-off recovery, under the price cap mechanism, of additional wholesale energy costs the company had been forced to pay for in the wake of Russia’s invasion of Ukraine when prices hit unprecedented levels.
The committee had earlier heard from a string of charities and consumer interest groups, with one pointing to more than 4,700 people in Britain dying last winter from the effects of lack of household heating.
Simon Francis, co-ordinator at the End Fuel Poverty Coalition, backed assertions that millions of households faced a tougher winter than last given many were now laden with debt.
Asked how he could sleep at night because “people are dying”, Mr O’Shea said that 10% of British Gas profits had been voluntarily given to help vulnerable customers and small firms.
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Price cap future in focus amid call for social tariff
Those representing consumers recommended direct, early support for vulnerable families through their energy bills given the continuing, and evolving, challenges posed by the wider cost of living crisis.
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One suggested a priority support channel to be opened with suppliers so they could handle urgent cases in a more timely manner given frustrations over call waiting times.
The energy regulator told Sky News last month that it would be “helpful” if the government brought back household energy support, fully withdrawn in July, due to persistently high bills that risked plunging more households into the red.
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Energy price cap falls from October
The energy price cap is currently predicted to rise back above the annual average £2,000 level from January due to expected hikes to wholesale costs for the season of peak demand.
These could be exacerbated by shocks in an already squeezed market.
Looming strike action at a major Chevron liquefied natural gas operation in Australia is already affecting wholesale prices, with experts warning of potential knock-on effects for global deliveries in the event of extended walkouts.
At the same time, unlike last winter, National Grid has no coal-fired back-up to call upon should energy resources become stretched such as when the wind doesn’t blow.
Image: Centrica’s chief executive is worried that gas storage capacity may prove insufficient
Centrica’s chief executive Chris O’Shea told Sky News in July that a lack of gas storage in the UK risked power cuts in the event of an extended period of cold weather.
National Grid ESO is due to give more details, on Thursday, of how it will operate the Demand Flexibility Service (DFS) this winter – first introduced in 2022 in the wake of Europe’s gas squeeze caused by the war in Ukraine.
The scheme, which aims to prevent the possibility of blackouts by paying participants to turn off their main appliances at times of peak power demand, is being maintained as a back-up measure.
UK car production fell by more than a quarter (27.1%) last month as a cyberattack at Jaguar Land Rover halted manufacturing at the plant, industry figures show.
The total number of vehicles coming off assembly lines – including cars and vans – fell an even sharper 35.9%, according to September data from the Society of Motor Manufacturers and Traders (SMMT).
“Largely responsible” for the drop was the five-week pause in production at Jaguar Land Rover (JLR) due to a malicious cyber attack, as other car makers reported growth.
JLR’s assembly lines in the West Midlands and Halewood on Merseyside were paused from late August to early October as a result.
During this time, not a single vehicle was made. Production has since restarted, but the attack is believed to have been the “most financially damaging” in UK history at an estimated cost of £1.9bn, according to the security body the Cyber Monitoring Centre.
It was the lowest number of cars made in any September in the UK since 1952, including during the COVID-19 lockdown.
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Are we in a cyber attack ‘epidemic’?
Despite the restart, the sector remains “under immense pressure”, the SMMT’s chief executive Mike Hawes said.
The phased restart of operations led to a small boost in manufacturing output this month, according to a closely watched survey.
Of the cars that were made, nearly half (47.8%) were battery electric, plug-in hybrid or hybrid.
The vast majority, 76% of the total vehicles output, were made for export.
The top destinations are the European Union, US, Turkey, Japan and South Korea.
JLR was just the latest business to be the subject of a cyberattack.
Harrods, the Co-Op, and Marks and Spencer, are among the companies that have struggled in the past year with such attacks.
Championship club Sheffield Wednesday have filed for administration, according to a court filing, which will result in the already struggling side being hit with a 12-point deduction.
The South Yorkshire club currently sit bottom of the Championship, the second tier of English football, with just six points from 11 games.
Known as The Owls, Wednesday are one of the oldest surviving clubs in world football, with more than 150 years of history.
Court records confirm the club have filed for administration. A notice was filed at a specialist court at 10.01am.
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Sky’s Rob Harris reports on the news that Sheffield Wednesday have filed for administration
What has happened?
The Owls, who host Oxford United on Saturday, have been in turmoil for a long time.
On 3 June, owner Dejphon Chansiri, a Thai canned fish magnate who took over the club in 2015, was charged with breaching EFL regulations regarding payment obligations.
Image: Sheffield Wednesday fans protest the ownership at a game away to Leeds United in January. Pic: Reuters
Weeks later, Mr Chansiri said he was willing to sell the club in a statement on their official website.
Image: Sheffield Wednesday’s troubles have sparked furious protests from fans. Pic: PA
Their crisis deepened just days later when another embargo was imposed on the club relating to payments owed to HMRC, before players and staff were not paid on time on 30 June.
In the months that followed, forwards Josh Windass and Michael Smith left the club by mutual consent. Manager Danny Rohl, now at Rangers, also left by mutual consent.
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Frustrated Sheffield Wednesday supporters have targeted their embattled club’s owner in a highly-visible protest during their opening match of the season.
The Owls were forced to close the 9,255-capacity North Stand at Hillsborough after a Prohibition Notice was issued by Sheffield City Council.
‘Current uncertainty’
On 6 August, the EFL released a statement, saying: “We are clear that the current owner needs either to fund the club to meet its obligations or make good on his commitment to sell to a well-funded party, for fair market value – ending the current uncertainty and impasse.”
On 13 August, the Prohibition Notice was lifted, but a month later, news emerged of a winding-up petition over £1m owed to HMRC.
Last season, Wednesday finished 12th. They had already been placed under registration embargoes in the last two seasons after being hit by a six-point deduction during the 2020/21 campaign, for breaching profit and sustainability rules.
With a 12-point deduction, the Owls would be 15 points away from safety in the Championship.
Doing well were computer and telecommunications retailers as the iPhone 17 launched in the month, while online jewellers reported strong demand for gold despite the price hovering around record highs.
Gold has been in demand, and in recent days reached a record high, as some investors moved money out of the US dollar and government bonds amid the ongoing government shutdown.
It came despite a rainy month – which typically keeps shoppers at home – and a five-day tube strike in London.
The impact of the rain could be seen, however, in the boost to online spending, which rose to one of the highest levels since the end of the pandemic.
A fall was recorded in food shop sales from August to September, signalling a response to high food price inflation.
A good week for the economy?
Retail sales figures are significant as they measure household consumption, the largest expenditure in the UK economy.
Growing retail sales can mean economic growth, which the government has repeatedly said is its top priority.
Earlier this week, another key economic measure came in better than expected.
Inflation remained at 3.8% rather than rising to the widely expected 4% – double the target rate set by the interest rate-setters at the Bank of England.
Consumers were feeling better about their finances, a closely watched measure of consumer confidence showed on Friday.
Buying sentiment is up from last month, according to market research company GFK, as intentions to buy big-ticket items like electrical goods and furniture rose.
Combined, it suggests people are not feeling too gloomy in the run-up to the November budget.