Posted: Thu 27th Jul 2023

British Gas owner posts record half year profit as households continue to struggle with cost of living

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Thursday, Jul 27th, 2023

Centrica, the parent company of British Gas, has reported record-breaking first-half profits of nearly £1bn, prompting widespread criticism and sparking fresh debates over the state of the UK’s energy market.

The eye-watering figure stands in stark contrast to the £98m reported for the same period last year, marking an astounding 889% increase.

The announcement comes at a time when millions of households across the UK are grappling with a cost-of-living crisis and escalating energy bills.

The record-breaking profits have provoked outrage from consumer groups and charities, who see them as a symptom of a failed energy market.

Approximately £500m of the recorded profit has been attributed to adjustments in Ofgem’s price cap, which enabled Centrica to recover costs lost during the energy crisis when it supplied 10 million customers.

British Gas, the largest UK energy supplier, currently serves around 7.5 million households and 480,000 small business sites.

Richard Neudegg, director of regulation at Uswitch.com, connected the energy profits to the price cap, suggesting it diminished incentives for suppliers to offer competitive deals that could reduce prices.

Neudegg advocates for a shift away from the price cap, pushing instead for a principle-based approach ensuring fair, transparent standard tariffs.

The Trade Union Congress (TUC) General Secretary, Paul Nowak, lambasted the UK government for failing to impose a robust windfall tax on excessive profits.

Nowak called for a transition of energy retail companies into public ownership to help lower bills and invest in home improvements.

Adding to the criticisms, Alyn and Deeside Senedd Member, Jack Sargeant, questioned the behaviour of energy suppliers and their regulator, Ofgem, in a series of Tweets.

Drawing attention to the controversy surrounding prepayment meters last winter, Sargeant pointed out the disparity between the energy companies’ record profits and their customer service levels.

Sargeant called for a change in law to ensure vulnerable households across the UK have legal protections and are not reliant on the goodwill of suppliers.

This massive profit increase, set against a backdrop of soaring living costs for many households, has ignited a fierce debate over the role of the energy market and its regulation.

As the economic squeeze continues, the calls for change in the energy sector show no sign of abating.

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