The boss of British Gas’s owner has acknowledged the “pain” caused by this week’s looming leap in energy bills, as it announced an extra £2million to help hard-up households.
Chris O’Shea, head of industry giant Centrica, admitted cost of living hit customers were already struggling with everything from filling up the car to the weekly shop.
That is before British Gas, like other suppliers, hikes prices for millions of customers from this Friday.
It follows regulator Ofgem’s decision to up its price cap for 22 million households by an average 54% to allow suppliers to recoup soaring wholesale energy costs.
In response, British Gas is now increasing an emergency fund to £6million.
Mr O’Shea, writing in the Mirror, accepted the company was “not perfect.”
It comes after Centrica last month announced annual profits more than doubled to almost £1billion, with those at British up 44% to £188million.
The company argued that around half of that was then paid in tax.
Mr O’Shea also called on the Government and regulators to go further to protect customers when suppliers go bust.
The £6million in the British Gas Support Fund provides grants of between £250 and £750 to help pay towards their energy bills.
Applications are administered by the British Gas Energy Trust.
It is designed for British Gas energy customers with less than £1,000 in savings who is struggling to pay their energy bill.
Over 2,500 grants have already been given out with an average grant of over £550.
Over a third of the recipients are on disability benefit and many are families.
Comment by Chris O’Shea
When energy regulator Ofgem raises the cap on gas and electricity bills for most people this week, I know the pain this increase will cause households across the country.
Every week we hear from customers struggling to make ends meet – whether filling up the car, doing the weekly shop or finding the money to heat their home.
At British Gas we’re not perfect – we know that - but we are trying our best to help our customers through this time.
It’s why today we have put another £2million into the British Gas Support Fund, taking the total to
£6 million. It’s the biggest energy support fund in the country and it’s available to those of our customers who need most help.
So far, we’ve contacted nearly 100,000 customers falling behind on their bills to see if they would like to access this fund. And to be clear, this isn’t a loan – it doesn’t need to be paid back.
We realise it cannot help everyone, but the £6m British Gas Support Fund comes on top of the £6million we give each year to the British Gas Energy Trust which helps everyone, whether they use
British Gas or our rivals.
And then there’s another £85million we paid recently to customers as part of the Warm Homes Discount scheme.
The bigger challenge looking forward is for companies like ours to work with Government to ensure we have an energy sector that is better prepared to withstand the pressure the next time.
And I would make a couple of recommendations when it comes to policy.
Firstly, we must do everything we can to protect and reassure customers. At the end of last year, we saw supplier after supplier going bust.
Pretty much all of them had used their customers’ money to try and keep their businesses going, rather than setting it aside to pay for gas and electricity as they were supposed to.
More than £500million of customers deposits has disappeared. And we’re all paying for that.
It’s why standing charges have gone up – not because costs are any higher, but because every person in
the UK has to contribute to replacing that ‘lost’ money. We think this is out of order and Ofgem need to fix this.
We’ve taken action to protect our customer deposits and we think every supplier should do the same.
If you agree, why don’t you tell your supplier.
Some will say they use it to buy gas and electricity in advance – but you should know that serious energy suppliers don’t actually pay for energy in advance.
Secondly, while it was good to see the Chancellor abolish VAT on energy savings measures last week, we need to see more.
We need to ensure the policies are in place to encourage consumers to move to low carbon energy sources.
The transition to net zero needs can be affordable but to make sure it doesn’t cost an arm and a leg we need a proper debate about how these costs are best paid for.
Making these changes will not only help to cut emissions but also build a more sustainable energy market and help keep a lid on bills into the future.
