Claim SSE gives UK Olympic-sized economic lift

POWER supplier SSE has revealed analysis showing the group contributed £9.1 billion to the British economy last year – a move likely to be seen as helping to overcome criticism of utility companies.

2012 Olympics boost to UK economy was a oneoff Picture:  Ian Rutherford
2012 Olympics boost to UK economy was a oneoff Picture: Ian Rutherford

The report, produced by “big four” accountant PwC and due for release ahead of next week’s full-year results, will show that the Perth-based firm supported 112,200 jobs and generated the equivalent of 0.7 per cent of UK GDP in 2013.

Its economic contribution is comparable in scale to the 2012 Olympic Games, which the UK government claimed to have given a one-off boost of £9.9bn.

Sources insisted the study had not been commissioned in a bid to deflect criticism over the group’s profits – which grew 5.6 per cent to £1.41bn in the year to March 2013 – and said it was part of a wider effort to increase transparency that will include more detailed analysis of its carbon emissions.

SSE chief executive Alistair Phillips-Davies said: “Energy companies are under more scrutiny than ever so it’s right we offer as much transparency as we can. We know we’re investing more than we make in profit, investing around £1.5bn a year into maintaining the energy infrastructure. This report is a serious attempt to see how that translates into economic benefit and job creation across the UK.

“London 2012 was a one-off, whereas SSE makes an Olympic-sized contribution every year.”

PwC’s analysis, which will be published on Monday, shows that for each of its 19,700 employees a further 4.8 jobs are supported elsewhere in the UK. SSE employs 6,100 people north of the Border and contributes about £1.4bn to the Scottish economy – 1.4 per cent of the country’s total output – through its operations, supply chain and spending by workers.

The group paid £310m in taxes to the Treasury last year, ranking it 22nd in a list of the UK’s largest 100 companies, the bulk of which comprised business rates and corporation tax. PwC calculated SSE paid about £66m in rates to local authorities in Scotland.

SSE said in March that it would be was freezing household energy prices until “at least” January 2016 as it unveiled plans to trim £100m off its annual cost base within the next two years.

The move will lead to about 500 job losses and saw plans for a number of wind farms shelved as “no longer financially viable”.

SSE is due to report its annual results on Wednesday and analysts at Deutsche Bank estimate pre-tax profits will have risen to £1.52bn this year, but will look for more evidence of disposals and savings to cope with the power firm’s price freeze.

The broker added: “For the coming years, group earnings growth looks modest until politics allows bill increases.”

In March, energy watchdog Ofgem called for a Competition and Markets Authority inquiry into the UK energy market.