Centrica boss warns energy price cap could make British Gas owner loss-making

Iain Conn said that the company’s average margin after tax is just £52 per customer

Mr Conn (pictured) has not yet reached the bumper pay levels of his predecessor, Sam Laidlaw, who pocketed £4.95m in 2012
Mr Conn (pictured) has not yet reached the bumper pay levels of his predecessor, Sam Laidlaw, who pocketed £4.95m in 2012

The chief executive of Centrica has said that the proposed price cap on energy bills would have the potential to turn the owner of British Gas into a loss-making business.

Speaking to the BBC’s Today Programme, Iain Conn said that the company’s average margin after tax is just £52 per customer, meaning that Centrica would "absolutely be losing money" if the proposed cap comes into effect and would have to "address" its costs and "look at service".

Over the weekend, Damian Green, the Work and Pensions Secretary, confirmed that the Government would cap energy prices if it wins the general election in June. It’s believed that the plans could cut gas and electricity costs by £100 a year for as many as 17 million families.

But Mr Conn said that, while the market is currently "not perfect", the plan “"will probably have unintended consequences".

"I think there are some at the heart of the Government who just don't believe in free markets,” he said. “I find that concerning at a time when this market is highly competitive and the UK is seeking to forge a new future relying upon free trade with the rest of the world," he added.

On Monday, shares in Centrica and energy provider SSE fell sharply.

Ministers have in recent months toughened their stance on energy suppliers after five of the big six energy providers announced price increases of up to 10 per cent.

Theresa May last month vowed to crack down on spiralling energy prices saying that "the market is not working as it should".

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in