Anger over ‘shameful’ British Gas
Feb 22 2008 by Dan Warburton, The Journal
MAMMOTH British Gas profits were met with anger in the region last night.
The energy giant yesterday announced profits had soared to £571m – just weeks after they hiked prices by 15%.
Industry regulator Ofgem has launched an investigation after the Centrica-owned company publicly stated that the profits in the residential arm of its business rocketed by 500%, from £95m in 2006 to £571m in 2007.
The news comes just a month after British Gas – along with four other energy providers – declared double-digit price rises that hit around 13 million customers.
And the news was given an angry reception by consumer groups across the region.
Jenny Saunders chief executive of National Energy Action, which is based on Pilgrim Street, Newcastle, said: “Since the beginning of this year roughly half a million households have been forced into fuel poverty due to these record price rises.
“Millions of our pensioners and low-income families have been struggling to keep warm during these sub-zero temperatures. “In the North East alone nearly 23% of households are in fuel poverty. That's the worst percentage of all the regions throughout the country.”
The announcement means that the energy giant made a £1,086 profit every minute during 2007, and comes only a week after dropping its claim to be “cheapest” duel fuel provider.
Gill Hale, Regional Secretary for Unison, the UK’s largest public sector union, yesterday branded British Gas as “greedy” and its 500% profit increase obscene. She said: “Customers will rightly be furious when they see the obscene level of profits being raked in by British Gas.
“This greed has got to be stopped. The unjustifiable price increases are burning a huge hole in customers’ pockets and causing misery to millions.
“British Gas should hang their heads in shame knowing that many people, including families, pensioners and the disabled, are too scared to heat their homes adequately this winter, because of the huge bills that follow.”
Centrica defended its decision to up customer bills, saying it would have been making a loss by now if it had not made the move.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “The announcement boils down to profits and price hikes and reveals the depth of the divide in how British Gas treats customers and shareholders.
“This company has given up all pretence of keeping a healthy balance between the two.”
In 2006 British Gas was shedding customers with more than one million customers leaving – one every 20 seconds.
But in 2007, it put a brake on the loss and managed to retain its market share, spending £53m on advertising in the process.
Ofgem will investigate whether the current system works well for all energy customers and will report its findings in September.
