Barefaced business in a cold world
Amidst rising energy prices forcing more families to choose between heating or eating, British Gas announced an 11% surge in profits, after having increased its tariffs by 6%. With millions of people in fuel poverty, the Energy Bill Revolution Group comprised of Bernardos, old age and charity groups warned that an additional 160,000 children had been forced to live in fuel poverty over the last two years. British Gas’s Managing Director will leave the company with a golden handshake of £10 million. This is the equivalent of a £130 Warm Front Discount for 77,000 people. Spokesman for the campaign group Fuel Poverty Action, James Granger said “People are angry and want the alternative to the big six’s monopoly: cheaper, clean, renewable energy under the control of communities, not greedy energy tycoons.”
In Terry Macalister’s article on the front page of the Guardian this week there are wonderful insights imbedded between the lines. British Gas claims that it earns about £50 per customer. This £50 figure is meaningless, since there may be thousands of people who are living in the cold, struggling to pay their heating bills from whom they earn hundreds of pounds. The poorest in our society pay as you go on meters costing 15-20% more than customers on direct debit. Lower prices per unit are most likely to be secured by businesses and institutions for which the energy suppliers make little or no profit. This broad brush summary of profits illustrates the impersonal, indifferent attitude of the large corporation towards the individual. Any deal negotiated with an energy supplier lasts only as long as the contract, or about one year. Our contacts in the community have shown us the 80% increases in price quotes they have received from the Big Six when their contracts expire. Clearly negotiating a price for a year will not end fuel poverty or improve the quality of our lives over the long term.
British Gas reported operating efficiencies leading to profit improvements. The profit increase was in their residential business. Instead of investing in the energy infrastructure that is needed to secure our energy future, making a commitment to lowering energy bills sustainably, British Gas proposed a £1.2 billion dividend to be paid out to its 700,000 shareholders, the equivalent of about £1,700 per shareholder. We need to invest about £10 billion in the next 10 years in our energy infrastructure to meet our low carbon and energy security requirements. Centrica shirks its responsibility urging its customers to “take action” by installing more efficient boilers, improving insulation and using new technology such as smart meters. It is unacceptable that the large corporations operating the network and supplying electricity and gas continue to fleece the public, taking no responsibility for providing affordable electricity and gas.
This business practice of raising prices, taking profits to be funnelled back to shareholders, rewarding investors for their low risk investment and making large payouts to exiting management that have already earned high compensation for their labours is out of touch, short sighted and must change. How much longer are people going to be kept in the cold? Come out of the cold and join BHESCo.