Centrica highlights its contribution to UK growth

SCOTTISH Gas firm Centrica yesterday highlighted its importance to the UK economy in a report which said it contributed £14.1 billion to GDP and supported 174,000 jobs, equivalent to a city the size of Leicester.

Centrica published the findings ahead of a week when it faces a backlash over an expected double-digit rise in profits, after increasing bills by 6 per cent for around 8.5 million households at the end of last year.

Last year’s poor weather is expected to have provided a boost to the company, with the City predicting the group’s residential business will deliver profits of £598 million, up from £544m in 2011, when it reports its annual results on Wednesday.

Chief executive Sam Laidlaw said the study showed how companies like Centrica were an engine for sustaining and stimulating growth. He said: “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.”

The gas and electric giant commissioned the report from consultancy firm Oxford Economics. It said that the energy group spent £9.4bn on goods and services from more than 6,000 UK businesses, and said the company and its staff paid £1.1bn in tax last year.

Oxford Economics chief executive Adrian Cooper said: “By generating tax revenue, supporting jobs and stimulating economic activity along its supply chain, the impact of Centrica’s activities is shown to extend well beyond its core function of delivering a secure energy supply to businesses and consumers across the country.”

The researchers also said that for every £1bn Centrica contributes to GDP itself, it generates another £2.9bn in the rest of the UK economy through what it called multiplier impacts.

But consumer organisation Which? said the report would mean little to householders.

Richard Lloyd, Which? executive director, said: “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 promised that energy suppliers would have to put their customers on the cheapest tariffs, but Ofgem’s proposals last week for simpler tariffs do not go far enough to keep prices in check.”