British Gas Reports Profits as Government Lauds Carbon Cutting Measures
By Rob Hull on July 28, 2010
Despite having lowered its prices for many customers, British Gas has reported operating profits of £585 million for the first half of 2010. After cutting gas prices in February, British Gas acquired some 223,000 new customers to take its total number of customers to just under 15.8 million.
According to the firm’s parent company, Centrica, profits of £585 million represent a rise of 98 per cent on previous figures. Chief Executive of Centrica, Sam Laidlaw, hinted at further price reductions in the future.
Mr Laidlaw said: “This is a competitive market, so we can’t give any signals, but our position has always been to lead the market down and try to delay any price increases as long as we can”.
Recently, Centrica reported profits of £1.56 billion – a 65 per cent rise – for the first half of 2010. The figures announced by both companies have prompted energy and consumer watchdogs to call for further price cuts.
Ann Robinson, of the price comparison service, uSwitch, said: “Today’s profits suggest that suppliers could actually afford to pass on even more benefit to consumers by cutting their prices again”.
Amid the news of increased profits and calls for lower energy bills, the Conservative-Liberal Democrat coalition Government has extolled the benefits of carbon cutting measures. In particular, the Government has claimed that the average annual household energy bill would rise by just £13 in order to subsidise renewable energy initiatives.
The UK Government aims to meet targets to cut carbon emissions by 34 per cent by 2020 and 80 per cent by 2050. In respect to the earliest target, various carbon cutting measures – 32 of which were published this week in the coalition Government’s first annual energy statement to Parliament – will be funded in part by an increase in domestic fuel bills.
It is estimated that, by 2020, the average household bill for gas and electricity would be £1,239 – just £13 higher than estimated bills excluding green policies. Currently, the combined energy bill for the average UK household is around £200 cheaper than the 2020 estimate.