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British Gas reports dip in profits

British Gas20/2/14

By Dominic Rees

British Gas owners Centrica have announced a £571 million profit from its residential energy arm in 2013 - 6% less than the £606 million haul in 2012.

British Gas lost 2% of its residential customer accounts in 2013 as households switched to other suppliers.

Centrica said the number of residential customer accounts at British Gas dropped to 15.3 million last year after the company announced winter price hikes of 9.2% on average.

All the major energy companies have faced criticism over winter price hikes.

Government encouraging Brits to switch energy supplier

The government has encouraged consumers to switch suppliers in order to make sure they are on the cheapest available tariff.

Centrica said another 100,000 customers have taken their business elsewhere so far this year.

However, Centrica said it believes customer switching is now "stabilising" following its decision to reduce its winter price rise by 3.2%.

This winter price rise reduction followed a shake-up of so-called green levies on bills by the government.

In December ministers announced that energy firms would no longer have to fund the Warm Home Discount scheme which offers subsidies of up to £135 a year to those on low incomes.

The government also relaxed rules around the Energy Company Obligation (ECO).

ECO required energy firms to provide low-income customers with energy-saving improvements such as cavity-wall installation.

Public anger over rising energy bills

Public anger over rising energy bills prompted Labour leader Ed Miliband pledging to stop suppliers from increasing prices if the party wins the next election.

The proposal has been attacked by Centrica CEO Sam Laidlaw, who said it was "not a credible solution".

Laidlaw added that such proposals "create both short-term uncertainty for all energy suppliers and longer-term additional costs for customers".

The company's share price has fallen in recent weeks after Energy Secretary Ed Davey MP called for a full-scale probe into the energy market, which could see British Gas broken up.

Centrica operating profits 2% lower

Centrica revealed that operating profits for last year were 2% lower, at £2.7 billion, across the wider group.

Its results show that higher wholesale prices and unseasonally warm weather saw British Gas suffer an 18 per cent drop in operating profits in the final six months of 2013. 

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