Energy giants face tougher windfall tax as bosses summoned for crisis talks - live updates




  • In Business
  • 2022-08-10 08:51:25Z
  • By The Telegraph
Chancellor Nadhim Zahawi energy bills price cap bosses support - REUTERS/Toby Melville/File Photo
Chancellor Nadhim Zahawi energy bills price cap bosses support - REUTERS/Toby Melville/File Photo  
  • Households face £30bn stealth raid from Rishi Sunak's tax freeze​

  • Heathrow's Spanish owner considers selling stake amid airport chaos

  • FTSE 100 slips 0.2pc at the open

  • Ben Marlow: The water regulator is missing in action

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Energy bosses will be hauled in front of ministers for crisis talks after the latest surge in predictions for energy bills this winter.

Gas and electricity bosses will meet Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng tomorrow morning, where they'll be asked to submit a breakdown of expected profits and payouts as well as investment plans for the next three years, The Sun reports.

It comes amid speculation that energy giants are facing an even tougher windfall tax on their profits after new forecasts showed bills will top £4,200 in January.

The latest predictions have fuelled calls for further support, with the boss of Octopus Energy warning British households need at least an extra £500 to survive the winter.

Greg Jackson said plans to hand £400 to every household - a package he said was worth around £16bn - would no longer cover the sharp rise in bills.

He told the BBC: "If the £16bn package was right previously, then clearly it's not sufficient now and we need to look at similarly significant assistance from the Government for this winter."

Mr Jackson added that the payouts could even be counter-inflationary if done right, as direct help with bills would mean energy makes less of a contribution to price rises.

Meanwhile, Utilita chairman Derek Likorish called for a social tariff to help the poorest in society, saying a "dramatic" increase in support of between £800 and £1,000 was needed.

09:51 AM

Households face £30bn stealth raid from Rishi Sunak's tax freeze

ICYMI - Families will pay an extra £30bn a year in tax as soaring inflation drags millions of people into higher income tax bands, according to a leading think-tank.

Szu Ping Chan has more:

Read Szu's full story here

09:35 AM

Eon writes down value of Nord Stream stake by more than half

Eon has slashed the value of its stake in the Nord Stream pipeline by around €700m (£591m) amid "heightened uncertainty" over the war in Ukraine and Putin's gas cuts.

Earlier this year the German company said its 15.5pc stake was worth €1.2bn, meaning the value has tumbled by almost 60pc. It comes after Moscow cut flows through the key gas link.

Eon also reported a 15pc fall in profits to just over €4bn in the first half of the year as it was squeezed by surging energy prices.

Leonhard Birnbaum, chief executive of Eon, said: "The current energy crisis finally makes clear that Europe needs to transform its energy system. To be independent of Russian gas. To ensure supply security."

09:14 AM

Lord Wolfson steps down from Deliveroo board as losses widen

Deliveroo Lord Wolfson - REUTERS/Toby Melville/File Photo
Deliveroo Lord Wolfson - REUTERS/Toby Melville/File Photo  

Lord Wolfson has stepped down from the board of Deliveroo as the food delivery company's loss widened in the first half.

The Next boss said the time required to fulfil the role "was no longer compatible with my executive and other commitments".

It came as Deliveroo posted a pre-tax loss of £147.3m for the first half of 2022, compared to losses of £95.4m a year earlier.

It also saw growth in group sales by gross transaction value slow sharply to 2pc in the second quarter - down from 12pc in the previous three months.

The slowdown reflects waning demand for takeaways as the cost-of-living crisis takes its toll on household budgets.

Deliveroo has increased customer fees and started selling ads on its app in a bid to increase revenue.

08:57 AM

FTSE risers and fallers

The FTSE 100 has slipped into the red in early trading as caution gripped markets ahead of US inflation figures due this afternoon.

The blue-chip index was down 0.2pc, moving further away from a two-month peak hit earlier this week.

Asia-focused insurer Prudential fell 1.5pc as it warned of challenging conditions for the rest of the year as Covid curbs persist in some markets.

Insurer Aviva, however, rose 4.9pc after saying it planned to give more money back to shareholders as it posted a better-than-expected 14pc rise in first-half operating profit.

The domestically-focused FTSE 250 also fell 0.2pc, with Royal Mail down as much as 3.4pc after it warned a planned strike would push it to a full-year loss.

08:29 AM

Tui takes £63m hit from travel chaos

Tui travel chaos - REUTERS/Peter Nicholls/File Photo
Tui travel chaos - REUTERS/Peter Nicholls/File Photo  

Holiday group Tui has taken a €75m (£63m) from the recent travel chaos that's led to lengthy delays and cancellations at airports.

The German company said its customers were affected by about 200 cancelled flights in May and June, in particular due to woes at Manchester Airport amid staff shortages.

Tui remained loss-making in the three months to the end of June due to the costs of the airport disruption, reporting underlying pre-tax losses of €27m.

It said that, with the airport disruption impact stripped out, it would have reported underlying earnings of €48m - its first quarterly profit since the pandemic struck

Both Heathrow and Gatwick have told airlines to cut their flight schedules as staff shortages have left them unable to cope with the rebound in travel demand after the pandemic.

Tui's chief financial officer and incoming boss, Sebastian Ebel, said he will hold "intensive" talks with airports and airlines, as well as resorts, as he looks to improve the customer experience.

08:15 AM

Royal Mail says strike will spark full-year loss

Royal Mail strikes CWU - REUTERS/Peter Nicholls
Royal Mail strikes CWU - REUTERS/Peter Nicholls  

Royal Mail has warned it will crash to a full-year loss if 115,000 posties go ahead with a planned strike over pay.

The company said it will be "materially loss making" in the 2023 financial year in the event of walkouts by the Communication Workers Union over four days in August and September.

Royal Mail said it's ready to negotiate with the CWU to "try and avert damaging industrial action", though any talks must address changes to working practices as well as pay.

It said the union had "failed to engage meaningfully on the business changes required" despite more than three months of talks.

The CWU yesterday said it would go on strike in protest over a pay increase of just 2pc.

Read more on this story: Royal Mail workers announce biggest strike of the summer

08:06 AM

UK energy debts hit record £1.3bn ahead of winter price surge

There's more data this morning highlighting the extent of the energy crisis facing households.

Tom Haynes reports:

Read Tom's full story here

08:01 AM

FTSE 100 opens lower

The FTSE 100 has lost ground at the open as investors turn their attention to US inflation figures due this afternoon.

The blue-chip index slipped 0.2pc to 7,473 points.

07:58 AM

Sunak ally calls for expansion of windfall tax

Calls are mounting for the Government to expand its planned windfall tax on energy giants as the price cap continues to surge.

Former minister Theresa Villiers, an ally of Rishi Sunak, said the Government should  "seriously consider" expanding the windfall tax, suggesting firms could play a bigger part in helping customers.

07:41 AM

Octopus boss calls for extra £500 energy support

Good morning.

Households need at least an extra £500 to survive soaring energy bills this winter as predictions for the price cap just keep going up.

That's according to Octopus Energy boss Greg Jackson, who said current plans for £400 help "clearly isn't sufficient" and urged the Government to go further.

He said direct help on energy bills would not only help families survive the winter, but also help to tackle inflation.

It comes after the latest predictions from Cornwall Insight found bills are set to top £4,200 a year by January.

Meanwhile, The Sun reports that energy bosses will meet ministers tomorrow amid plans to ramp up an existing 25pc windfall tax on the profits of major producers.

5 things to start your day

1) Heathrow's Spanish owner considers selling stake amid airport chaos  Ferrovial has previously warned about committing more funding following row over landing charges

2) Used car sales fall as drivers hold onto vehicles for longer  Chip shortage chokes production lines, leading to a lack of supply on secondhand market

3) Taxpayer-backed tech startup falls into administration as investor writes off £79m stake  Ticketing firm Pollen had received backing from Rishi Sunak's Future Fund

4) The last thing we need to fight energy poverty is Soviet price controls or Macron's coddling of the affluent  Allowing the state to intervene could lead to damaging consequences

5) EDF sues French government for €8.4bn after Macron forces it to sell energy at a loss  Nuclear giant estimates price cap could cost it €15bn over the year

What happened overnight

Asian shares fell and the dollar steadied on Wednesday as investors waited for a key US report on inflation to provide hints to the Federal Reserve's plans for future monetary tightening.

The Consumer Price Index (CPI) report will be released later today, with markets watching for signs that inflation eased in July despite last week's unexpectedly strong US jobs numbers.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.51pc, while Japan's Nikkei extended losses from the previous day and was down 0.65pc.

South Korea's KOSPI lost 0.64pc, Australia's AXJO dropped 0.12pc, and Taiwan's TAIEX fell 0.7pc.

Coming up today

  • Corporate: 4imprint Group, Admiral Group, Aviva, CLS Holdings, ContourGlobal, Gamesys Group, Quilter, TP ICAP (interims)

  • Economics: Consumer price index (US, China, Ger), monthly budget statement (US)

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