Social Justice

British Gas pledge to help customers is a mere ‘drop in the ocean’ say fuel poverty campaigners

British Gas has pledged 10 per cent of its profits to help people pay their energy bills, but fuel poverty campaigners say it's far from enough.

Image: Daniel Gamez

British Gas has pledged 10 per cent of profits to help customers struggling to pay their energy bills, but fuel poverty campaigners say the offer is a mere “drop in the ocean”.

The initial donation of £12million doubles the previous contribution from the supplier into its existing support fund for the poorest customers and will see customers given grants of between £250 and £750.

But critics say the fund will benefit just 0.5 per cent of the company’s 7.5 million customers.

Paul de Leeuw, director of the RGU Energy Transition Institute at Robert Gordon University in Aberdeen and a former Centrica executive, told BBC Radio 4’s Today programme: “They’ve got 7.5 million [residential] energy customers in the UK, so if you look at the money that is available, it’s probably going to benefit around 40,000 people max so that’s 0.5 per cent of their customer base.

“So 99.5 per cent of Centrica and British Gas customers are probably not going to see any benefit from this.”

The pledge is also based on the company’s retail supply profits, which amounted to £98m before tax in the first-half of 2022. However, it amounts to less than 1 per cent of parent company Centrica’s £1.3bn profits in the same time frame. 

The energy price cap is predicted to a jump a further £1,582 on October 1 to £3,553 a year – an increase of 80 per cent, with some families saying the bills will be impossible to pay, or push them into debt

“The offer from British Gas is a drop in the ocean compared to the huge levels of need we will see this winter,” said Simon Francis, co-ordinator for the End Fuel Poverty Coalition. 

“While resources should always be targeted at the most vulnerable first, but gestures such as this will not go far enough to help even those already in fuel poverty.

“If energy firms are unable or unwilling to act, the responsibility lies at the feet of the Westminster government and its long-term failure to fix Britain’s broken energy system or significantly invest in energy efficiency programmes and support for cheap, clean renewables.”

British Gas customers with less than £1,000 in savings and who fit the criteria for being in fuel poverty are eligible to apply for a one-off grant through the British Gas Energy Trust, with the average grant north of £550. 

National Energy Action estimates the October energy price cap rise will push the number of UK households in fuel poverty from 6.5 to 8.5 million. Households that have to spend 10 per cent or more of their income on energy are considered to be in fuel poverty.

Calls for a windfall tax on energy companies’ profits have grown, furthered by Shell and BP reporting record profits of £7.3bn and £5bn  for the first three months of 2022. 

Nationalisation of energy companies is also becoming an increasingly popular option, with the Trades Union Congress calculating that nationalising energy suppliers would cost £2.85bn, around the same amount the government has spent bailing out energy companies in the past year. It says doing so would bring bills down and encourage companies to make homes more energy efficient.

“Here’s a better idea,” said Labour MP Bell Ribeiro Addy in response to the British Gas announcement. “Take energy into public ownership and use 100% of this profit to support people through the current crisis #EnoughIsEnough.”

Centrica CEO Chris O’Shea said: “The current cost of living crisis requires all of us to think differently. As a responsible business we want to do more to support our customers during this difficult time. 

“Committing 10 percent of our profits for the duration of the energy crisis will mean we can target help at those who need it the most.  This increased investment in supporting our customers adds to the financial support and advice we already offer and ensures more grants will be available as we go into this winter.

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