British Gas profits fall as prices rise
British Gas owner's profits fall to £5.4m a day
Thursday, 31 Jul 2008 09:00
Centrica – the owner of British Gas – announced its profits fell 20 per cent to £992 million for the first half of the year.
Yesterday the firm announced a 35 per cent rise in its gas prices, despite making £5.42 million in operating profits a day.
Centrica chairman Roger Carr said the price hikes, putting average annual energy bills at £1,322, were necessary to "restore reasonable profitability in British Gas".
The firm claimed domestic price increases were necessary given the rise in wholesale gas prices
Liberal Democrat leader Nick Clegg said the price rises of 35 per cent for gas and nine per cent for electricity would be "devastating" for many families, particularly the elderly and vulnerable.
"The announcement may have been made in a hot spell in July, but when winter comes round thousands will be forced to choose between heating their homes and cooking their meals," he said.
"British Gas has thousands of customers paying fixed rates, but when those terms expire they will be hit with staggeringly high bills."
He went on to call on the government to deal with the issue of high energy bills.
"Energy companies are benefiting from a £9 billion windfall yet continue to hike up their prices on the government’s watch. This is unacceptable," Mr Clegg said.
Your views
Ian from London: This latest callous disregard for the below average wage earner just confirms, yet again, how ineffective this government is and how irresponsible the senior executives are. Do they forget that their annual salaries would cover hundreds of thousands of people in lower wage brackets full annual incomes? Their pay rises alone could probably fund the NHS for 12 months - ok probably an exaggeration - but 35% to the management structure, on their salaries, is simply an annoying irritation, however, too many people, hardship is just around the corner and, many people will be forced to sell their homes or move to smaller accommodation just to feed these greedy fat cats. This government should penalise the companies with huge windfall taxes, but also subject the management to massive increases in their tax to at least 95% of their income and them see how it feels to be in a far more difficult position in life.