British Gas owner Centrica to cut 4,000 jobs as bosses accused of failing to step up competition

NIcholas Cecil
British Gas bosses attacked plans for the cuts: REUTERS

British Gas bosses today attacked government plans for a cap on energy tariffs as its parent company Centrica revealed plans for 4,000 job cuts following a 17 per cent slump in profits.

But company chiefs, many on bumper salaries, were accused of “bleating” and came under fire for not responding fast enough to growing competition.

The firm’s British workforce was cut by 2,100 last year. The majority of the new job cuts will affect both its UK home and business units over the next three years, as it looks to meet a cost-cutting target of £1.25 billion a year by 2020.

Group chief executive Iain Conn, whose salary jumped to £4.15 million in 2016, said: “The combination of political and regulatory intervention in the UK energy market, concerns over the loss of energy customers in the UK, and the performance issue in North America have created material uncertainty around Centrica and, although we delivered on our financial targets for the year, this resulted in a very poor shareholder experience.”

Matt Lay, of Unison, said: “British Gas staff shouldn’t be feeling the heat today. It should be Centrica chief executive Iain Conn. British Gas can’t go on putting the squeeze on its staff and customers. If the company is to survive, it needs first-class products, priced competitively to help rebuild its market share, and a genuine strategy for growth.” British Gas announced plans in November to scrap standard variable tariffs for new customers ahead of government moves to impose a price cap on these energy products.

About 4.5 million Centrica customers, about 60 per cent, were on SVTs at the time of the announcement, with 70 per cent of profits coming from the SVT customer base. “We believe that price controls in competitive energy markets are not good for customers and evidence shows that where they have been introduced in other markets they have led to reduced competition, less choice, and prices that tend to cluster around the cap,” the company said.

But Business Secretary Greg Clark defended the proposed cap.

A spokesman for the Department for Business, Energy and Industrial Strategy, said: “The Government has been clear that we will intervene to protect customers who are being overcharged for their energy until we have a market that works for consumers.”

Former energy secretary Sir Ed Davey warned the Government’s intervention risked undermining competition, but added: “Centrica are bleating and have only got themselves to blame because they were the worst offender in the domestic supply of gas as the former monopolist.”