Centrica: Boss of British Gas’s parent company calls for 'social tariff'

It came as it was revealed Centrica’s retail arm, which is mainly made up of British Gas, saw profit soar from £94m in 2022 to £799m last year.

All of this profit came from the first half of the year.

Most of this was because of the way the energy price cap works.

British Gas and other energy suppliers were, in the first half of last year, allowed to recoup some of the costs they had during the energy crisis.

For British Gas this added £500m to its bottom line.

Mr O’Shea said that companies have to make a profit in order to stay healthy.

The collapse of dozens of suppliers in the last couple of years has cost households around £88 each.

But more is needed to protect the poorest, the chief executive said.

“The poorest in society are really struggling but it’s not just the energy. It’s energy, it’s rent, it’s mortgages, it’s food and all manner of costs,” he said on a call with reporters.

“What I’m focused on is how do we fix this in energy and that’s why we need a social tariff, that’s why we need the standing charge to disappear.

“I think that’s the best thing we can do for consumers. That will reduce the cost for the poorest in society, the people that are really, really struggling.”

Centrica’s adjusted profit fell to £2.8bn before tax, compared with £3.2bn the year before, the business revealed on Thursday.

On a statutory basis, thanks to the way that Centrica buys energy in advance, it made a profit of £6.5bn last year before tax, up from a loss of £383m in 2022.

The business said that it had hired 700 new people to work in its British Gas call centres.

Partly as a result of this, it saw an 8 per cent fall in the amount of complaints it got per customer, the company said.

“We take care of our colleagues, they take care of our 10m customers and the resulting performance takes care of the shareholders,” Mr O’Shea said.

The company revealed that customers used a little less energy last year than they had in 2022, but Mr O’Shea said it was impossible to say how much of this was due to efficiency upgrades, and how much was because of higher costs.

Commenting on the general market performance, Richard Hunter, Head of Markets at interactive investor, said: “In early exchanges, RELX and Centrica shares both bounced on upbeat full-year numbers and accompanying comments, while there was also some broadly based interest among the retailers.

"Bargain hunting also lifted the more recently embattled Diageo, whose shares have declined by 19 per cent over the last year, with a small drag coming from declines in Shell and Imperial Brands, both of which were marked ex-dividend today.”