British Gas owners face backlash after reports suggest they will announce 15% surge in profits
Parent company Centrica is about to announce profits of 2.8billionThey are also under fire over payments worth more than 10million made to departing British Gas boss, Phil Bentley
The PM announced gas firms will have to simplify tariffs for customers
Profit bonanza: The parent company of British Gas faces a backlash amid reports it is to announce a 15 per cent increase in profits on the back of spiralling bills for struggling customers
The company is also under fire over payments to the departing British Gas boss, Phil Bentley, who is predicted to walk away with a package of pay, shares and a pension pot together worth more than 10million.
Centrica has tried to pre-empt the furore by publishing a study boasting about its beneficial effects on the wider UK economy in terms of employment, investment and the tax it pays.
Chief executive Sam Laidlaw said its contribution to the economy was equivalent to a city the size of Manchester, and its tax bill amounted to 158 for every UK household.
‘At a time of uncertain economic prospects, our activities across the UK are even more important to secure employment, put the supply chain to work and contribute our fair share of tax,’ he said.
The company employs some 33,000
people in the UK, while total tax paid is expected to rise from 891m in
2011 to around 1.1 billion in 2012.
Payout: Centrica is also under fire over payments worth more than 10million to the departing British Gas boss, Phil Bentley
most energy firms operating in the UK, it is wholly British and pays
its taxes in this country. Most of its major rivals for UK customers are
foreign owned by German, French and Spanish utility firms.
While that may appeal to the patriotism of its 10 million UK consumers, it does not make the pain of paying for heat and light any easier to bear.
The national average gas and electricity bill is approaching 1,300, while millions face a nightmare choice during cold spells between heating and eating.
British Gas claims a profit margin of some 5per cent – around 65 a year – which it insists is modest when compared to other businesses, such as supermarkets.
The industry blames rising wholesale costs for higher bills, while it also points to expensive government ‘green’ initiatives, such as subsidising the building of wind farms and the installation of free insulation into the homes of vulnerable customers.
The official customer body, Consumer Focus, says the public remain sceptical about whether they are paying a fair price.
Executive director at consumer champion, Which, Richard Lloyd, said: ‘At a time when spiralling energy bills are consumers’ top financial worry, people are bound to question whether they’re paying a fair price for their energy when they see big profits announcements from the energy giants.
‘Centrica’s analysis won’t change that view as record-high bills land on millions of doormats in the coming weeks.’
The Prime Minister has announced that
energy firms will be required to simplify their tariffs and move
customers to the cheapest option.
Talking taxes: The Prime Minister has announced that energy firms will be required to simplify their tariffs and move customers to the cheapest option
However, Mr Lloyd said the proposals do not go far enough and it will remain extremely difficult for householders to identify the cheapest supplier.
‘The Government should take more radical action to provide not just simpler but fairer bills.’ Said Mr Lloyd.
‘Prices will only be kept as low as possible if there is more effective competition and switching between energy companies.
‘For this to happen the price of every tariff should be presented in a clear, consistent and simple way, through single unit prices like those for petrol and diesel, so people can easily spot the cheapest deal – not just with their current supplier but across the market.’