The ‘Who Owns Britain?’ study by the Common Wealth think tank indicates that a quarter of the average UK energy bill was funding corporate profits last year. The study found that shareholders in Britain’s privatised energy companies have taken £70.7bn in dividend payouts between 2010 and 2025. This origins of this phenomenon can be traced back to Thatcher’s time in power, from 1979 to 1990.
The essence of Thatcherism was a belief in free markets and a small ‘state’. This led to the sell off of previously state-owned national assets and industries that had been nationalised by governments leading up to 1979. The list includes British Telecom, the 10 regional water authorities in England and Wales as well as British Steel. The 12 regional electricity companies were sold in 1990. Thatcher revolutionised the provision of essential services throughout the UK through privatisation.
Where are we now?
That all depends on where you sit after privatisation. Those people who had money to invest in these shares have done very nicely, thank you very much. The study found that the UK energy sector profit margins are well above the FTSE 350 average, 64% for electricity distribution, 57% for electricity transmission compared to 14% FTSE 350.
Analysis in the study found that £416 out of the average UK energy bill of £1,719 was taken in pretax profits by the major electricity generators, networks and household suppliers last year. While we do not have the most expensive energy costs in the world, we certainly are not cheapest either.
The BBC reported in April 2025 that UK domestic energy prices were the fourth highest in Europe and Industrial energy prices were the highest. This in a country which is energy rich, both in fossil fuels and green technologies.
Why does this matter?
Money that should be invested in a smarter National Grid and the future of green technologies is currently being wasted on dividends to those lucky enough to be shareholders in national essential services.
Matthew Lawrence, director of Common Wealth, said the public was paying a high price for the “privatisation premium”.
“They are lumped with higher energy bills that fund billions of pounds of shareholder payouts. That money should be invested to build homegrown clean power and help reduce costs.’’
Chris Hayes, the Common Wealth’s chief economist, said the UK’s energy system was unfit for the challenges the country faced amid an escalating climate emergency and cost of living crisis.
“Networks running natural monopolies have systematically underinvested in maintenance and expansion. A splintered retail sector has allowed generators to capture windfall profits. Meanwhile, our clean energy investment regime has been blown apart in the last few years of economic uncertainty. Public investment and vertical reintegration are desperately needed to overcome these challenges.
“Electricity is not a luxury to be enjoyed by the richest in our country but rather it is the lifeblood of our economy. The analysis of the figures in this report finds that much of the profit was going to servicing company debt and shareholder payments rather than to investment.”
A spokesperson for the energy regulator, Ofgem, said it regulated the market to “ensure that any costs passed on to consumers are fair and accurate, and that the sector isn’t making excessive profits.’’
Our commitment
Bylines Scotland is now asking the question, how big the profits have to be before they are considered ‘’excessive”? This is a question we intend to put to all candidates of the Scottish Parliament in 2026.
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