PROFITS at British Gas have leapt by 900 per cent to almost £1 billion after the UK’s biggest energy supplier was given permission to clawback cash from customers.
The bumper profits have immediately caused an outcry as millions of cash-strapped households struggle to pay their energy bills in the cost-of-living crisis.
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Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “These profits are a further sign of Britain’s broken energy system.
“At a time when household energy debt is spiralling to record levels and energy bills remain double what they were just a few years ago, the profits posted will be greeted with disbelief by those struggling through the crisis.”
The boom in profits came after regulator Ofgem said energy suppliers could recoup some of the costs during the energy crisis when they had to buy gas at a high price but couldn’t charge as much.
British Gas’s household arm said that profits jumped from £98 million last year to £969 million for the first six months of 2023. The boost also dwarfs its previous high of £585 million back in 2010.
The record-breaking British Gas results pushed parent company Centrica to a half year profit high of £2.1 billion. Centrica is now handing investors a sweeter dividend and transferring £450 million via a share buyback.
Ed Miliband, Shadow Secretary of State for Climate Change and Net Zero, said that energy firms were bringing in “unearned, unexpected profits” as a result of Russia’s war in Ukraine causing a spike in prices.
Centrica said that it would hand another £50 million to help customers struggling with their bills this winter.
Chris O’Shea, boss of parent company Centrica, admitted that the business was starting to see an increase in customer arrears and people cancelling their direct debits – indications that households were struggling to pay their bills. Mr O’Shea said that British Gas had provided “more support for customers than all of our competitors combined”.
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Still, Heidi Chow at Debt Justice said that the “obscene profits have been made at the expense of millions of UK households that have been plunged into debt and arrears because of record energy prices.”
Figures from End Fuel Poverty show that 1.2 million households were disconnected in the first three months of this year while a fight of pre-payment customers owe up to £250 on their accounts.
Earlier this year British Gas was engulfed in a scandal after its debt agents were found to have broken into vulnerable customers’ houses to force-fit pre-payment meters.
BIG LEAP ‘IS A ONE-OFF’
By Ashley Armstrong
ENERGY regulator Ofgem’s price cap is meant to limit what suppliers, such as British Gas, can charge for average gas and electricity tariffs.
Vladimir Putin’s invasion sent wholesale electricity and gas prices soaring six-fold last year.
Energy companies still had to buy gas and electricity at peak prices to provide households with power.
But they were limited in what they could charge customers because of the cap.
Ofgem has now increased the cap to compensate suppliers, but they are only able to recover losses from last year.
British Gas and the regulator reckon that this will be a one-off surge in profits.
