British Gas axes 1,310 jobs

Click to follow
The Independent Online

British Gas owner Centrica slashed 1,310 jobs today as it promised to cut gas and electricity bills in the spring.

The firm, which said it had lost 978,000 customer accounts in the year to date, will close its headquarters in Stockley Park, Middlesex, and relocate to Staines.

Centrica said 700 roles will go at the British Gas Residential Energy back office, including administrators and workers processing household bills, while 340 will be cut in British Gas Services and a further 270 will disappear from the corporate side.

It came as Centrica said a fall in wholesale gas prices would trigger a fall in household energy bills in the spring of 2007.

Centrica said the streamlining of the business would save it £24 million next year and £34 million in 2008.

It said the "majority" of the 700 jobs going at the household gas and electricity arm will be redeployed to call centres as Centrica beefs up its customer service arm.

Centrica has just over 16 million customers taking gas and electricity from British Gas.

It hiked household bills by 22% in March and put a further 12.4% on the cost of gas and 9.4% on the cost of electricity in September.

British Gas is the most expensive energy supplier in the UK with average annual gas bills up 91% since 2003 to £707 and the average electricity bill 81% higher at £428.

However, Centrica today promised a cut in the cost of bills next year following a fall in how much it pays for gas.

It came after the warm autumn cut demand for energy at the same time as new supplies of gas arrived in the UK via the Langeled pipeline from Norway and the BBL pipeline from Holland.

Centrica chief executive Sam Laidlaw said: "We are very conscious that the prices our customers pay are directly impacted by the volatile gas wholesale markets.

"The extra gas flowing through new pipelines to the UK, underpinned by our long-term contracts, has led to falling wholesale market prices.

"As a result we will cut customer prices in the spring, with the exact amount to be decided once we have complete clarity of winter gas costs. I'm sure this will be welcome news for millions of our customers."

Centrica said its British Gas arm would return to profit in the second half of the year, having made losses of £143 million in the first half.

It also said that group earnings for the full year would be "slightly ahead of current market consensus".

Mr Laidlaw said: "The business performance is improving but we need to continue to drive cost reductions and improve customer service to ensure we are able to compete effectively in a tough market.

"We have sharpened our operational focus on these issues, and will maintain our leading position in securing new flexible sources of gas for the UK."