British Gas firm Centrica on offensive over profits
British Gas firm Centrica sought to deflect flak over another jump in annual profits today by flagging up its importance to the UK economy.
Chief executive Sam Laidlaw said its contribution to GDP was equivalent to a city the size of Manchester, and its tax bill amounted to £158 for every UK household.
Centrica has published the findings of its specially commissioned report in a week when it faces a backlash over an expected double-digit rise in profits, after increasing bills by 6% for around 8.5 million households at the end of last year.
Consumer Focus called for greater transparency between profits and prices earlier this month after rival utility giant EDF revealed a £1.7bn earnings haul just two months after raising bills for 3.7 million British households.
But Mr 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.”
British Gas commissioned consultancy firm Oxford Economics to write the report, which also found that the group, which employs 33,100 people, supported 174,000 UK jobs in 2012 – equivalent to total employment in Leicester. It also found that it spent £9.4bn on goods and services from more than 6,000 UK businesses.
Centrica is also keen to highlight its contribution to Government coffers 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 multiplier impacts.
But Consumer organisation Which? said the report would mean little to householders.
Which? executive director Richard Lloyd said: “At a time 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.
“The Government should take more radical action to provide not just simpler but fairer bills.
“Prices will only be kept as low as possible if there is more effective competition and switching between energy companies.
“For this to happen the price of every tariff should be presented in a clear, consistent and simple way, through single unit prices like those for petrol and diesel, so people can easily spot the cheapest deal – not just with their current supplier but across the market.”
