By Daniel Hunter

RWE, parent group of energy company npower, announced an annual net profit of €1.8 billion today (Tuesday).

The announcement comes a week after new research revealed that the number of winter deaths caused by fuel poverty is three times higher than previous government estimates.

With ‘Big Six’ profits coming under close public scrutiny and suggestions that the number of households in fuel poverty could swell to 9 million by 2016, calls for government intervention and the introduction of zero-rate VAT on energy bills are becoming harder to ignore.

Danny Jatania, Chairman and CEO of Pockit, is calling for the government to reconsider the current rate of VAT (5%) for energy bills.

“By scrapping VAT on energy bills the government could cut the number of households in fuel poverty by 250,000 and help millions more who are struggling to pay their energy bills. With the latest figures on winter deaths painting an alarming picture, now is the time for action," he said.

“Water bills and basic foods are already classed as essential, qualifying them for a zero rate of VAT, and I do not think many people would argue that heating and electricity are also necessities for all households. To see that over 7,000 winter deaths are related to fuel poverty is very distressing and you do not expect to see it in the developed world.”

The announcement of RWE’s profits will add further momentum to the consumer backlash against the UK’s ‘Big Six’ energy companies. During the first half of 2011, npower raised their prices by 16% for gas and 7% for electricity despite having doubled their profits for the first half of the year. They have since cut their gas price by 5% but the spectre of fuel poverty still looms over millions of UK households.

‘Big Six’ profits have been cast in an ugly light thanks to research that emerged last week that claims 7,800 winter deaths are linked to fuel poverty. Previous government estimates placed the number at around 2,700 but new research carried out by Professor Christine Liddell of the University of Ulster, claims that the figure is actually three times larger. With 5.5 million households in fuel poverty already, and that number predicted to increase to 9 million in the next four years, many are calling for government action.

“The time has come to redress the balance; it is not acceptable to see energy companies announcing colossal profits while millions struggle to survive winter," he added.

"The money lost by the Treasury by scrapping VAT could be well over £1bn, but a windfall tax on the huge profits made by the ‘Big Six’ could help to plug this hole and possibly be reinvested to help homes implement measures such as cavity wall and loft insulation to become more energy efficient.”

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