The owner of British Gas has reported a big jump in profits – as its boss called for a “social tariff” that would help poorer Britons pay less for their gas and electricity.
The retail wing of parent company Centrica, which is mostly made up of British Gas, said profits soared to £799m in 2023, an increase from £94m a year earlier.
Profits were made in the first half of the year due to the energy-supplier firm’s ability to recover previous trading losses via the energy regulator Ofgem price cap, which limits how much users pay per unit of power.
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Centrica said its bottom line was boosted to the tune of around £500m during the first six months of the year.
The sum is effectively a form of compensation for having to buy energy at a loss to the cap during the height of the energy crisis when gas prices reached record levels in 2022, it said.
It came as Centrica chief executive Chris O’Shea said customers struggling with energy bills would be best helped by the introduction of a social tariff, whereby vulnerable people are charged less via subsidised energy bills.
“The poorest in society are really struggling but it’s not just the energy. It’s energy, it’s rent, it’s mortgages, it’s food and all manner of costs,” Mr O’Shea said.
“What I’m focused on is how do we fix this in energy and that’s why we need a social tariff, that’s why we need the standing charge to disappear.
“I think that’s the best thing we can do for consumers. That will reduce the cost for the poorest in society, the people that are really, really struggling.”
Centrica’s annual results for 2023 said that while such high levels were a one-off, profits will continue. In 2024 profit is expected to come in between £150m and £250m.
At the same time customer debt has risen, the results said, as more consumers are unable to pay their bills due to the cost of living crisis.
