UK

British Gas Profits Rise To £606m As More Children Condemned To Fuel Poverty

27/02/2013 08:32 GMT | Updated 27/02/2013 12:33 GMT

The number of UK children living in fuel poverty has risen to 1.6 million as British Gas revealed they made £606 million in profit last year from their residential arm, months after a price hike.

Research by Energy Bill Revolution found that 130,000 more children are living in freezing homes compared with 2010, while British Gas residential saw an 11% rise in profits.

A campaign to accompany the study claims these children are twice as likely to suffer from asthma and other respiratory problems compared with those whose families can afford to keep the house warm.

Centrica, which owns British Gas said on Wednesday the profits were down to last year's colder-than-normal weather, which saw gas use leap 12% and in spite of a 1% fall in customer accounts to 15.7 million in 2012.

The results are likely to raise questions over the fairness of energy bill increases after British Gas raised tariffs by 6% for around 8.4 million households at the end of last year.

Barnardo's assistant director of policy and research, Neera Sharma, said: "It's a disgrace that not only has so little action been taken to bring down energy bills, but nothing is being done to stop them rising further for the UK's poorest families.

"Now 1.6 million children endure the misery of growing up in cold homes, which can affect every area of their wellbeing.

Group adjusted operating profits rose 14% to £2.7 billion, but Centrica said it paid more than £1 billion in tax and invested £2.7 billion in 2012.

Directors from the company appeared on television this morning to defend the results.

Chris Jansen, managing director of services and commercial at Centrica, said a colder winter last year contributed to the rise in profits.

He told Daybreak: "I completely understand our profits announced today will create a reaction with customers.

"I think it's important to remember that in 2011 it was a very, very mild winter ... so the country used a lot less gas, and actually our profits in 2011 were 20% down on 2010."

Energy Bill Revolution is is calling on Prime Minister David Cameron to "end the growing scandal of cold homes" by using carbon tax to make all homes in the UK energy efficient.

He was echoed by Ms Sharma from Barnado's who added:"The government must tackle this national crisis to reduce the effects of poverty. They can start by channelling funds raised by the carbon tax into making homes warmer."

Shadow energy secretary Caroline Flint said: "These figures are a damning indictment of David Cameron's failure to get a grip on spiralling energy bills.

"People have to ask themselves what kind of government can afford a £3 billion pound tax giveaway for the highest earners but chooses to cut support for people in fuel poverty and leave over a million children in the cold."

gas

British Gas profits rose by 11%

Meanwhile Mr Jansen refused to rule out further price increases. He said: "The general trend for energy prices are prices are increasing. All we say to customers is let's do what we can to control energy bills.

"Prices might be going up but bills don't need to if we control our energy use."

Ian Peters, managing director of residential energy for British Gas, said: "If I look into the future we have no plans to put prices up even higher, the gas prices are relatively calm."

Asked on BBC Breakfast how long into the future - and if the firm was committing to not putting prices up - he said: "I can't do that because the gas market is volatile.

"But right now, as I say, it is very early in the year, we work in a very competitive market and it is not in our interest or our customers' to put prices up. So we will do everything we can not to do that.

"What I want to say is that we will move heaven and earth to keep our customers' bills down. We have the lowest bills in the industry."

energy bills

Burning money: 130,000 more children live in fuel poverty

A Department for Energy and Climate Change spokeswoman said: "We can't control volatile world energy prices, but we are working with the independent regulator, suppliers and consumer groups to help people keep bills down this winter.

"We have schemes in place to improve energy efficiency and tackle fuel poverty, including subsidies for the poorest paid for by suppliers, and the Green Deal launched at the end of last month will help millions improve their homes so they are better insulated, with extra help for those who need it most.

"Energy policies are already benefiting from direct funding from the Exchequer, including the £1 billion for carbon capture and storage, £860 million for the renewable heat incentive, which will also help households that are off the gas grid, and £200 million in Green Deal incentives."