Anger as British Gas profits soar 31% (but bills fall by just 5%)

PENSIONER groups hit out at British Gas last night, describing a 31 per cent surge in profits as ‘absolutely sickening’.

The company cashed in last year after failing to pass on a sharp fall in the cost of heat and light to its 11million customers.

High energy bills are said to have left some families and pensioners with a nightmare choice between heating or eating, and the number of so- called excess winter deaths rose to a 15-year high of 43,900 last year.

Many of these fatalities were associated with illnesses made worse by the cold, not least a much worse than expected flu epidemic.

Profits at British Gas were £574million in 2015 rose – a 31 per cent rise on 2014’s figure. The firm claimed the increase was because the weather was colder during 2015 and so customers were using their central heating more.

Critics insist the real reason is that it passed on only a fraction of the falls in wholesale energy prices – a 34 per cent cut for gas and more than 20 per cent for electricity.

British Gas cut its standard gas tariff by 9.75 per cent in two stages in 2015 and there was no reduction on electricity bills for customers. The company, which is the country’s largest energy supplier and serves around 11million households, has announced another cut of 5.1 per cent on gas that will come into effect in March.

Fuel Poverty Action, a campaign group for those struggling to pay their energy bills, accused British Gas and its parent company, Centrica, of profiteering.

‘It is absolutely sickening that British Gas has made bumper profits in a year when there were more winter deaths than at any time this century,’ said spokesman Ruth London.

An investigation by the Competition and Markets Authority into the energy industry found that the majority of consumers who are on standard variable rate tariffs have paid hundreds of millions of pounds more than necessary because wholesale price cuts have not been passed on.

It is due to publish measures to improve competition and has raised the possibility of capping the standard variable tariffs.

Ann Robinson, director of consumer policy at uSwitch.com, said: ‘Hearing news of rising profits when wholesale energy prices have tumbled will leave many British Gas customers wondering if they’re being treated fairly.’

Which? executive director Richard Lloyd said: ‘With British Gas today announcing residential profits are up, customers will be asking why energy suppliers have only cut their gas prices by such a paltry amount.’

Centrica chief executive Iain Conn insisted that the group was passing on reductions and that the rise in profits was simply down to the weather and increased consumption.

‘We saw a very mild 2014 and we saw a more normal 2015. Therefore the amount of energy that our customers used went up and therefore the actual total profit went up,’ he said.

While British Gas is doing well, profits at Centrica, which supplies gas and electricity, fell because of lower wholesale prices. They dropped 12 per cent to £1.46billion.

The group is slashing costs to deliver savings of £750million over five years. As a result it is planning a net reduction in the workforce of 4,000 jobs.

‘Cut prices by a paltry amount’