THE boss of Centrica has told HOAR it will give 10 per cent of British Gas’s energy profits to cash-strapped households.
It is the first energy firm to dip into its own pocket to help with the cost of living crisis.
The boss of Centrica has told HOAR it will give 10 per cent of British Gas’s energy profits to cash-strapped households
Chris O’Shea has committed to donating £12million of British Gas profits this autumn and a further 10 per cent every six months for the duration of the energy crisis.
This could provide up to £60million for British Gas’s poorest customers, based on National Grid forecasts that higher prices will last for the next three years.
Mr O’Shea told HOAR ahead of the price cap rise by Ofgem tomorrow, which is expected to confirm bills will hit £3,600 in October, that “many people are facing really tough choices”.
The grants of between £250 and £750 will be targeted to the tens of thousands of customers British Gas has identified will be in financial distress as a result of soaring energy costs.
Mr O’Shea said: “We don’t have a silver bullet and we know this fund can’t reach everyone. But I believe it can help make a real difference for those who really need our support.”
Centrica has come in for criticism after reporting a fivefold rise in profits to £1.3billion last month.
It has made more money from its oil and gas drilling because prices have soared following Russia’s invasion of Ukraine.
As a result, the £12 million is less than one per cent – 0.89 per cent – of Centrica’s recent group profits.
However, the move to donate directly to households is the first move by any energy company to go beyond mandatory support.
O’Shea also called on the government for a £100billion bailout.
He has previously defended Centrica’s bumper profits and handing investors dividends by saying that he also needed to protect the 500,000 individual investors who backed its privatisation in the 1980s.
The energy boss pointed the finger at energy regulator Ofgem for not being able to lower customer bills.
He said: “Under the current system our regulator Ofgem sets the price you pay for energy to make sure everyone pays a fair price that reflects the actual cost of energy.
“If an energy supplier decided to charge below that cap, they will lose money quickly and will go out of business.
“We’ve already seen that if you don’t have robust and resilient energy companies then consumers pay the price – each and every household in the UK is forking out £100 more this year on energy bills to pay for the collapse of multiple energy companies last year and this can’t be allowed to happen again.”
In the past year 30 energy suppliers have gone bust, affecting nearly 4.5million customers.
Record high gas prices could mean the government’s bailout of Bulb could cost £5billion, adding another £150 to every taxpayer’s bills.
Mr O’Shea’s commitment came as the Resolution Foundation said a new prime minister had to introduce energy bill freezes and solidarity tariffs or “thousands could see their power cut off, health endangered while millions could fall behind on bills, run up arrears and damage their credit ratings.”
The number of families that are falling behind on at least one utility bill has increased from nine to 14 per cent between October and June.
And current energy price forecasts mean that those on pre-payment meters will see bills rise to £613 in January – equivalent to 44 per cent of their monthly income.
The think tank said: “Low-income households will spend twice as much of their family budgets on energy bills as high-income families.”
Which? says the government needs to increase its £400 energy bills support scheme by £100 a month to £1,000 for all households, plus an additional £150 for low-income families.
It estimates this would cost an additional £18billion.
The consumer champion also said that the government needs to reform the price cap and higher tariffs for prepayment customers as well as standing charges.
Which?’s Rocio Concha said: “With energy bill predictions continuing to spiral, the government must increase the Energy Bills Support Scheme by at least 150 per cent, or risk pushing millions of households into financial distress this winter.”
Centrica boss Chris O’Shea has committed to donating £12million of British Gas profits this autumn
British Gas parent company Centrica has come in for criticism after reporting a fivefold rise in profits to £1.3billion last month
