British Gas sparked fresh fury today as it unveiled an 11 per cent surge in profits just weeks after pushing up bills to record levels.
Britain’s biggest energy supplier was accused of being “contemptuous of its customers” when it revealed that it made £606 million profit last year from the gas and electricity it sold to almost 16 million households.
Consumer groups and Labour MPs ripped into the company — owned by energy giant Centrica — and warned that thousands of pensioners will die this year because they cannot afford to turn the heating on.
British Gas raised its tariffs by six per cent in November, adding about £80 a year to the typical bill. This was despite profits at its residential energy supply arm shooting up by £62 million, or 11 per cent, last year.
Ann Robinson, director of consumer policy at price comparison website uSwitch.com, said: “Asking customers to swallow a six per cent winter price hike and then unveiling an 11 per cent increase in profits is tantamount to waving a red rag at a bull.”
Shadow consumer affairs minister Ian Murray said: “It is unacceptable that the Prime Minister is letting the energy companies get away with inflation-busting price rises when they are already making huge profits and pensioners, in particular, are having to choose whether to heat or eat.”
British Gas also confirmed that managing director Phil Bentley, 54, will step down as its boss at the end of June, although he will remain on the pay-roll until the end of the year “to ensure a smooth transition”. Mr Bentley will leave with Centrica shares, rights to long-term incentive bonuses and a pension pot expected to be worth up to £11 million in total, although he will not get a separate pay-off on top.
Company chiefs were despatched to TV and radio studios to defend the financial results after they were announced in the City at 7am. Centrica chief executive Sam Laidlaw said rises were justified by its huge investment in energy infrastructure to “keep the lights on” and said the profits rise was artificially boosted by the much colder weather last year compared with 2011.
The group needed to make a “fair and reasonable return so that we can continue to make our contribution to society and to invest”. Company bosses said it was “too early” to say whether there would be further tariff rises this year.
Consumer groups called for a more radical root and branch shake-up of Britain’s energy supply market.
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Richard Lloyd, executive director of Which? said: “Prices will only be kept as low as possible if there is more effective competition and switching between energy companies.”
