Watchdog says bills must be cut after British Gas declares "dangerous" profits

By Harry Wallop, Consumer Affairs Editor Published: 12:47PM GMT twenty-five February 2010

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British Gas denounced jot down enlarge Photo: PA

British Gas done �595 million of handling enlarge during 2009, a burst from �376 million the year before, interjection to estimable tumble in indiscriminate appetite costs, usually a small piece of that were upheld onto customers.

This kick the prior jot down of �573m set in 2007, and came notwithstanding a 7 per cent dump in gas consumption, as business incited down their thermostats to save income during the retrogression and commissioned some-more energy-efficient boilers.

Water bills go up in summer underneath anniversary cost tag Scottish and Southern cuts gas bills Gas companies need to be investigated for "nearly identical" cost cuts British Gas enlarge set to climb Energy companies creation �105 distinction per patron Households profitable roughly �1.7bn as well majority for appetite bills, watchdog says

The company, that reserve some-more than twin out of each five homes with gas, done the homogeneous of �37.89 of distinction for each customer.

Consumer Focus, the Government-funded watchdog, called for all suppliers to rught away to cut their bills and for the Competition Commission to examine the market.

Philip Cullum, emissary arch senior manager at Consumer Focus said: "Energy companies have no excuses for not slicing bills for their customers. It is transparent the problems in the appetite marketplace are surpassing and that it requires elemental reform.

"For consumers, a multiple of high prices and cold continue has exacted a complicated cost. Energy companies have taken value this winter, whilst some-more than 6 million UK households live in fuel misery and face a unfortunate onslaught to keep warm."

British Gas did cut the bills last year by 10 per cent, the majority of any of the suppliers, but the association certified that the normal check over the march of last year was "slightly higher" than the year before.

Since the finish of 2009, it has embellished gas bills by a serve 7 per cent, but this is still not sufficient to retreat the 43 per cent enlarge in bills during 2008. And following a unemployment in the cost of indiscriminate gas and electricity, appetite companies" costs have depressed almost given the begin of last year. Anti-poverty charities pronounced the cut was "too small as well late".

The normal British Gas twin fuel check (including gas and electricity) right away totals �1,158.

Ofgem, the industry regulator, estimates that appetite companies are right away creation �105 distinction from each patron on an annual basement given they have unsuccessful to pass on descending indiscriminate costs.

British Gas"s enlarge are accepted to be reduce than most of the rivals. However given the rivals are owned by companies formed in Europe, they do not acknowledgement how majority income they have from their British customers.

Which? arch executive, Peter Vicary-Smith said: "When consumers are told that indiscriminate prices are descending and appetite companies are announcing fender profits, theyre going to subject because their fuel bills arent being reduced. Energy suppliers contingency be upfront about how they work out bills, differently the tough not to interpretation consumers are being taken for a really costly ride."

Simon Hughes, the Liberal Democrat Shadow Energy and Climate Change spokesman, said: "These large enlarge show that the appetite companies are out of carry out and their regulator is out of action.

"The 6 big beasts of the appetite jungle contingency be tamed rught away to stop their rapacious activities that are so dangerous to the public."

Phil Bentley, the handling executive of British Gas, shielded the enlarge indicating out that given the cut progressing this month the association was the cheapest vital retailer of gas and electricity.

He combined that the company"s post-tax distinction domain of 5 per cent was extremely reduce than that enjoyed by alternative domicile names such as BT, Sky or Marks & Spencer. "If we reduce the bills by 5 per cent we would have no money. And but these enlarge we cannot deposit in insulating people"s homes, in formulating new jobs and rolling out intelligent meters," he said.