DCSIMG

British Gas reveals profit rise after price hikes

British Gas has announed a rise in profits. Picture: PA

British Gas has announed a rise in profits. Picture: PA

  • by CLAIRE SMITH
 

CONSUMER groups have criticised British Gas after it announced an eleven per cent rise in profits after increasing costs to consumers by six per cent.

The energy company, known as Scottish Gas north of the border, raised its prices in November, saying increased higher wholesale prices had to be passed on to customers.

However, a rise in profits from £544m to £606m has led consumer groups to renew calls for an overhaul of the UK energy market.

Which? executive director 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 when they see a big profits announcement from the biggest of the energy giants.”

The consumer watchdog has campaigned for greater transparency in the energy market, saying bills should be simpler and fairer.

Which? also advocate allowing people to compare prices and switch suppliers more easily.

Sam Laidlaw, chief executive of Centrica, which owns British Gas, defended the organisation’s profit levels, saying the company had invested £2.7 billion in energy infrastructure in 2012.

He said: “We have taken the lead during 2012 in helping more households save energy and supporting the people who need the most help. It’s important that Centrica makes a fair and reasonable return so that we can continue to make our contribution to society and to invest. Last year we incurred a tax charge of over £1 billion and invested over £2 billion to secure new sources of energy for the UK, well in excess of our profits.”

However, Ann Robinson, director of consumer policy at uSwitch.com, said consumers had had enough of exorbitant energy prices.

“Asking customers to swallow a 6 per cent winter price hike and then unveiling a 11 per cent increase in profits is tantamount to waving a red rag at a bull. Yes there is a huge amount of investment required to keep the lights on over the next ten years, but there has to be a balance between energy companies making healthy profits and people going cold for fear of the cost of turning their heating on. While British Gas makes a strong case about future investment, jobs and security, I suspect there will be little sympathy [for Centrica], especially amongst those who have shivered at home this winter.”

Trisha McAuley, senior director at Consumer Focus Scotland, said consumers were anxious about the future. “Perhaps we should not be surprised to see higher profits after a cold winter and with the prospect of significant investment in our energy infrastructure. But this announcement comes after more price rises last year, record numbers in fuel poverty and not long after the energy regulator warned of higher still energy prices for the foreseeable future.”

Labour’s Shadow Energy Minister Tom Greatrex said it was time for a comprehensive review of the energy market.

“People will not understand why just a few months ago Scottish 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.

“It is unacceptable that David Cameron is letting energy companies get away with inflation-busting price rises when they are already making huge profits and when people can least afford it.

“The time has come for a complete overhaul of our energy market. Labour has set out plans to break the dominance of the energy giants, open up the energy market, protect vulnerable customers from being ripped off and create a tough new energy regulator with the power to force energy companies to pass on savings to consumers.”

 

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