Iceland boss urges profit cap on energy firms

Richard Walker has urged the government to consider imposing a temporary cap on energy company profits, warning that households risk bearing the brunt of another price shock linked to the Middle East conflict.

The Iceland boss, recently appointed as a Labour peer and cost of living adviser, said ministers should examine limiting earnings for producers and retailers during periods of extreme volatility.

“I have asked the government to consider a temporary profit cap … to stop producers and retailers exploiting the crisis to make windfall profits at the expense of consumers,” Walker wrote in The Sunday Times.

The proposal would go further than existing windfall taxes by directly restricting profits during crisis periods, a move likely to divide opinion across business and government.

Walker said the intervention would be targeted rather than permanent, adding: “As executive chairman of a retailer, I have no problem with profit… But I do have a big problem with profiteering, especially when families are under real pressure.”

His comments come as energy markets remain volatile following escalating tensions in the Middle East, which have pushed Brent crude above $100 a barrel in recent weeks. Prices briefly surged as high as $119 before easing back, while gas markets have also seen sharp swings after attacks on key infrastructure in the Gulf.

The government has already summoned energy producers and petrol retailers to Downing Street, in what Walker described as a “shot across the bows”, warning against “opportunistic rip-offs”.

Walker warned that the current situation risked repeating patterns seen in previous crises, where prices rise quickly but fall more slowly, leaving consumers exposed.

“This cannot be another moment when ordinary households take the first and hardest hit, and profiteers seize the opportunity,” he said.

Existing measures such as the energy price cap, fuel duty freezes and targeted support schemes are providing short-term relief, but are due to taper in the coming months, raising questions about longer-term protection for consumers. A profit cap would mark a more direct intervention in markets and a significant escalation in government involvement.