A LACK of action by the UK Government on the cost of living crisis has led to a UK energy company imposing a windfall tax on itself, an SNP MP has said.

Angus MacNeil took aim at the Tories after British Gas pledged to donate 10 per cent of its profits during the energy crisis to help people struggling with rising bills.

Meanwhile Plaid Cymru’s Westminster leader, Liz Saville Roberts MP, has called on the UK government to return the energy price cap to pre-April levels.

According to British Gas thousands of customers will receive an average £750 per household.

The money will be provided through the British Gas Energy Support Fund, which gives grants to those most in need.

Tweeting about the news, MacNeil said: "Seems energy companies can cope easily with windfall taxes.

"The lack of action by the Tories has led to them to taxing themselves."

This comes as Ofgem, the industry regulator, is expected to announce another huge rise in the energy cap on Friday as global gas prices soar."

Households are bracing for a forecast 80% increase in bills to be announced on Friday going into the winter period, with analysts Cornwall Insight now predicting average costs will increase to £3554 in October and £4650 in January.

It would be a massive jump from today’s £1971, which is already a record, and much higher than £1138 last winter.

In response to the expected increase in the price cap, which allows companies to make a "reasonable profit" Plaid's Saville Roberts also call for the price cap to be extended to small businesses and charities, who are currently excluded, and for financial support for vulnerable households to be doubled.

She said: "Plaid Cymru are calling on the UK Government to return the price cap to pre-April levels for both standard-variable tariff and pre-payment meters. That is the only way to protect struggling families.

“Small businesses such as corner shops, farms and food suppliers are facing rocketing bills and will not be protected by a price cap. Plaid Cymru are therefore backing the Federation of Small Businesses’ call for the price cap to be extended to small businesses and charities.

"The £650 cost-of-living payment must be doubled, and its eligibility criteria revised to include those on disability benefits, who are currently excluded.

A letter to the Government from the British Chambers of Commerce (BCC) has urged ministers to hand more power to Ofgem, cut VAT and introduce pandemic-style emergency grants to help enterprises facing rocketing costs.

British Gas Energy’s pre-tax profits were £98 million in the first half of 2022, meaning its initial contribution would be £9.8m.

The supplier said it will immediately boost this to £12m over the winter period when energy usage is highest.

The pledge came after British Gas was criticised on Wednesday for taking 90% of gas top-ups and 100% of electricity top-ups from indebted prepayment customers – higher than other major suppliers.

Chris O’Shea, chief executive of Centrica, the parent company of British Gas Energy, said: “The current cost-of-living crisis requires all of us to think differently.

“As a responsible business we want to do more to support our customers during this difficult time.

“Committing 10% of our profits for the duration of the energy crisis will mean we can target help at those who need it the most.

“This increased investment in supporting our customers adds to the financial support and advice we already offer and ensures more grants will be available as we go into this winter.”

Paul de Leeuw, director of the RGU Energy Transition Institute at Robert Gordon University in Aberdeen and a former executive at Centrica, said British Gas's initial donation would only benefit 0.5% of its 7.5 million customers.

He told BBC Radio 4's Today programme that while it was a helpful gesture, the £12m donation amounted to just 1% of the companies profits.

"They've got 7.5 million [residential] energy customers in the UK, so if you look at the money that is available, it's probably going to benefit around 40,000 people max so that's 0.5% of their customer base.

"So 99.5% of Centrica and British Gas customers are probably not going to see any benefit from this."

British Gas said it is offering the largest voluntary aid package of any UK energy supplier, with a total fund of £18 million over the last eight months, including the new funding which will be backdated to the start of 2022.

On Thursday, Which? warned the Government to raise its energy bills discount by at least 150% or risk pushing millions of households into financial distress.

The consumer watchdog said the Government’s financial support for all households must increase from the current £400 to £1000 – or from £67 to £167 per month from October to March.

The existing support package is inadequate to protect living standards for those on the lowest incomes, it said.

When the Government first announced its financial support package in May, the energy price cap was predicted to reach around £2800 in October.

No immediate extra help will be announced by Boris Johnson’s Government, with major financial decisions being postponed until either Liz Truss or Rishi Sunak is in No 10 after the Tory leadership contest.

Sunak has pledged to remove VAT from energy bills, while Ms Truss has promised to cut green levies.

On Wednesday, Chancellor Nadhim Zahawi insisted “nothing is off the table” when it comes to action on soaring energy bills, but added that a freeze in the price cap would not deliver “targeted help” for those who need it most.

Labour has called on Tory leadership hopefuls Rishi Sunak and Liz Truss to expand the windfall tax on oil and gas companies.

A version of this article first appeared on our sister site, The National in Scotland.