Centrica boss renews calls for ‘social tariff’ amid higher British Gas profits
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The boss of British Gas’s parent company has renewed calls for a “social tariff” which will let poorer Britons pay less for their gas and electricity, as the energy supplier revealed a big jump in profit.
Centrica chief executive Chris O’Shea said that a special tariff for the worst off would be “the best thing we can do for consumers”.
It came as it was revealed Centrica’s retail arm, which is mainly made up of British Gas, saw profit soar from £94 million in 2022 to £799 million last year.
All of this profit came from the first half of the year.
What I'm focused on is how do we fix this in energy and that's why we need a social tariff, that's why we need the standing charge to disappear
Most of this was because of the way the energy price cap works.
British Gas and other energy suppliers were in the first half of last year allowed to recoup some of the costs they had during the energy crisis.
For British Gas this added £500 million to its bottom line.
Mr O’Shea said that companies have to make a profit in order to stay healthy.
The collapse of dozens of unhealthy suppliers in the last couple of years has cost households around £88 each.
But more is needed to protect the poorest, the chief executive said.
“The poorest in society are really struggling but it’s not just the energy. It’s energy, it’s rent, it’s mortgages, it’s food and all manner of costs,” he said on a call with reporters.
“What I’m focused on is how do we fix this in energy and that’s why we need a social tariff, that’s why we need the standing charge to disappear.
“I think that’s the best thing we can do for consumers. That will reduce the cost for the poorest in society, the people that are really, really struggling.”
Centrica’s adjusted profit fell to £2.8 billion before tax, compared with £3.2 billion the year before, the business revealed on Thursday.
On a statutory basis thanks to the way that Centrica buys energy in advance it made a profit of £6.5 billion last year before tax, up from a loss of £383 million in 2022.
The business said that it had hired 700 new people to work in its British Gas call centres.
In part thanks to that it saw an 8% fall in the amount of complaints it got per customer.
“We take care of our colleagues, they take care of our 10 million customers and the resulting performance takes care of the shareholders,” Mr O’Shea said.
The company revealed that customers used a little less energy last year than they had in 2022, but Mr O’Shea said it was impossible to say how much of this was thanks to efficiency upgrades, and how much was because of higher costs.
