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LGA criticises energy providers over dividends

The UK's largest energy firms gave their shareholders £1.6 billion in dividends last year, a rise of 19 per cent on 2006.This revelation, contained in a new report commissioned by the Local Government Association (LGA), has led to strong criticism of these firms.The £257 million dividend rise comes despite the energy providers previously claiming that their increased profits were ploughed back in to worthy schemes such as research and development, the study suggests.Sir Jeremy Beecham, the LGA's chairman, said that these claims had now been "torpedo[ed]".He added: "The government and Ofgem (the regulator) should seize the opportunity to take a long-term solution to encourage the energy companies to use their disproportionate dividend payments for a massive drive to insulate people's homes."Responding, chief executive of the Energy Retail Association Garry Felgate commented: "This payment to shareholders is not an alternative to the commitment by energy companies to invest tens of billions of pounds in Britain's energy infrastructure. "Investment in energy efficiency is undoubtedly worthwhile, but without significant investment in infrastructure there may be no energy to save."

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