British Gas boss: I’ll slash jobs if I’m not allowed to raise prices
Fatcat moans about fuel cap
THE fatcat boss of British Gas has threatened to slash more jobs if energy prices are capped.
Iain Conn said “we will have to look at all options” if cost controls hit profits, despite suppliers’ margins reaching a record high last year.
Mr Conn, chief executive of British Gas owner Centrica, added: “One of the choices we have is to accelerate our cost efficiency programme.”
Shadow Chancellor John McDonnell promised in February to cap prices charged by energy firms if Labour wins the next election.
Theresa May will today announce the move as a Tory election pledge in the run-up to the June 8 vote.
A limit set by regulator Ofgem on standard variable tariffs – used by about 70% of households – could save families £100 a year.
But big energy suppliers claim it could backfire. Centrica said: “Evidence from other countries would suggest this will lead to reduced competition and choice, and potentially higher average prices.”
The firm is part-way through a cull of 6,000 staff, announced in 2015.
The combined profits of British Gas, EDF Energy, Scottish Power, E.ON and npower were up 7.8% to nearly £1.1billion last year as they failed to pass on wholesale cost savings, a report from Lazarus Research claimed.
But Mr Conn denied that energy suppliers were “profiteering”. British Gas has lost 261,000 customers so far this year, to the lowest level since it was privatised in 1986, Centrica revealed.
Mr Conn has previously warned a price cap could wipe out profits.
Ed Miliband pledged a freeze on fuel bills while he was Labour leader, and Mrs May’s announcement will trigger claims that she stole the idea from him. Centrica has lobbied for the policy to be watered down. Energy Secretary Greg Clark said: “Families are paying £1.4billion more than they should in energy bills. And in the last few months, five of the largest suppliers announced increases to already poor value standard tariffs. “This clearly isn’t fair and reasonable and we are going to put it right.” One idea is a “relative price cap” between the standard variable tariff and suppliers’ cheapest deal. Tory MP John Penrose, who suggested the idea, said the big six suppliers would suffer “slow commercial death” if they scrapped their cheapest tariffs.