Centrica in new profits row

 

Centrica, the owner of British Gas, has flown into a fresh storm of controversy after unveiling a 9 per cent surge in half-year operating profit to £1.58bn only months after hiking household bills.

British Gas raised its prices by an inflation-busting 6 per cent in November, then saw revenues leap as the long, cold winter forced Britons to turn up the heating. Yesterday Centrica's half-year results showed profits at British Gas alone rose 3 per cent to £356m in the six months, sparking condemnation from politicians and consumer groups.

Michael Fallon, the Energy minister, said: "They should certainly show restraint in future prices. There have been some big increases and they need to show restraint." Caroline Flint, Labour's energy spokeswoman, added: "When times are tough, energy companies should be helping their customers, not clobbering them with price rises."

Yet Sam Laidlaw, Centrica's chief executive, refused to freeze prices, instead hinting at a further rise in bills when he said: "There are some cost pressures in the business." He said environmental charges were partly to blame for higher household bills.

The government-imposed Energy Companies Obligation scheme, designed to help low-income families with heating bills and green insulation, added £112 to the average British Gas £1,188 dual-fuel bill last year. It is set to be £16 higher than that in 2013 after just the first half. "Most people don't understand yet that over £120 a year on their bill is going to environmental charges," Mr Laidlaw said.

Those fees are supposed to be offset by lower consumption as a result of the extra insulation and other initiatives, but this year's cold winter saw households use 13 per cent more gas and electricity in the first half.

Mr Laidlaw also tried to deflect criticism of Centrica's profits by discussing the Government's tax regime. While it pays 47 per cent tax, which saw its bill hit £690m in the first six months of this year, its rival Npower was dubbed "the new Starbucks" by MPs earlier this year after admitting it had not paid corporation tax for three years. German-owned Npower said it was "in no way tax avoidance", adding "we've been investing hundreds of millions to keep the UK's lights on".

But Mr Laidlaw said: "Our basic British Gas business pays full corporation tax. There's nothing clever about our tax arrangements. It's important for us to contribute and to pay our full share of tax."

Mr Laidlaw's comments follow a warning from an all-party group of peers that the corporate tax system "is not working and urgently needs reform". Lord MacGregor, chairman of the Lords committee, said: "There is a sense that corporation tax is voluntary for some multinationals that operate globally, while small UK-based businesses go by the book and have to pay."

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
PROMOTED VIDEO
Sport
Fans hold up a scarf at West Ham vs Liverpool
footballAfter Arsenal's clear victory, focus turns to West Ham vs Liverpool
New Articles
i100... she's just started school
News
news
News
ebooksAn unforgettable anthology of contemporary reportage
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Sport
football
New Articles
i100... despite rising prices
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam