British Gas profits surge prompts call for reform

British Gas parent Centrica came under public and political fire today after it revealed it made nearly £50 per household last year just months after hiking customer bills.
British Gas parent Centrica provoked public anger over energy firm profitsBritish Gas parent Centrica provoked public anger over energy firm profits
British Gas parent Centrica provoked public anger over energy firm profits

A £606m profit haul at British Gas residential was slammed as “staggering” amid calls for the firm to use some of the cash towards reducing energy bills for its 8.4m customers.

The 11 per cent rise in profits came after last year’s colder-than-normal weather saw gas use leap 12 per cent, with British Gas making £49 on each average annual dual fuel bill of £1,188.

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Its results have raised questions once more over the fairness of energy bill increases after British Gas raised tariffs by six per cent.

Centrica also confirmed yesterday that British Gas boss Phil Bentley is quitting at the end of June – and will leave with a combined share, salary and pension package worth around £10m.

Trade union Unite said the energy regulator should be given more power to ensure utility providers “behave fairly”. Len McCluskey, Unite general secretary, said: “British Gas’ owner Centrica is making £50 per household in this country – that is staggering. These profits will anger a growing number of families who are struggling to pay the bills. The price increases in November caused hardship for customers while British Gas bosses boosted their profits and their own bonuses in the process.”

Underlying earnings at the wider Centrica group jumped 14 per cent to £2.7bn, but Centrica said it paid more than £1bn in tax and invested £2.7bn in 2012.

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Chief executive Sam Laidlaw insisted the company needed to make a “fair and reasonable return so that we can continue to make our contribution to society and to invest”.

Centrica stressed that British Gas contributes a fifth of total group profits, with 2012 results largely driven by a 20 per cent rise in profits at its upstream gas and oil exploration business to £1.2bn.

Consumer Focus called for greater transparency between profits and prices earlier this month after utility giant EDF revealed a £1.7bn earnings haul just two months after raising bills for 3.7m British households.

Shadow Energy and Climate Change Secretary Caroline Flint said it was time for a “complete overhaul of our energy market”.

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People will not understand why, just a few months ago, British Gas claimed they had no option but to put up their prices when now it looks like they’re making huge profits on the back of spiralling bills for hard-pressed consumers,” she added.

Comment: Page 12.