Centrica, the owner of British Gas, has seen its profits more than triple in 2022 due to rising energy prices caused by the Russian invasion of Ukraine. The energy company reported underlying operating profits of £3.3 billion ($4 billion), compared to £948 million in 2021. Excluding its Spirit Energy businesses that were sold, the company’s profits rose to £2.8 billion from £392 million the year before.
The news has sparked criticism from opposition parties and unions and calls for the government to impose a windfall tax on oil and gas businesses. Labour’s shadow chancellor Rachel Reeves said the government should use the extra money from the tax to keep the energy price cap at its current level. Labour’s shadow climate secretary Ed Miliband also promised that his party would introduce a “proper” windfall tax on energy companies.
The announcement of the profit figures comes two weeks after The Times of London reported that debt collectors working for British Gas broke into homes of vulnerable customers to forcibly install pay-as-you-go meters. Following the report, the UK’s energy regulator Ofgem launched an urgent investigation, and Centrica announced that British Gas was suspending the force-fitting of prepayment meters.
Liberal Democrat leader Sir Ed Davey said the profits are a “betrayal” for British Gas customers who are struggling to keep their heating on. He added that the government’s failure to implement a proper windfall tax is allowing oil and gas businesses to make billions off the back of hardworking families.
Centrica chief executive Chris O’Shea defended the massive spike in his company’s profits, saying that he would use the profits to help customers and the environment. He also apologised for the behaviour of subcontractors who had broken into people’s homes to force-fit energy meters and said it is vital to help people afford their bills.
In May 2022, then Chancellor Rishi Sunak imposed a 25 percent profit levy on oil and gas giants to fund a £15 billion emergency support package to tackle the impact of energy inflation on British households. After Sunak became prime minister, Chancellor Jeremy Hunt increased the windfall tax from 25 percent to 35 percent and imposed a 45 percent levy on electricity generators. Hunt said that the Energy Profits Levy is expected to generate just over £40 billion between 2022 and 2028.
Patricia Devlin, Lily Zhou, and PA Media contributed to this report.