The energy provider's excuses are as leaky as a Thames Water pipe
You’d think British Gas would have worked out that kicking its customers in the teeth while blaming everyone but itself isn’t working out too well as a business strategy.
But apparently not. The UK’s largest energy supplier – a status that the company is doing its damnedest to rid itself of – has decided to hike prices by an average of 5.5 per cent for the four million or so customers on its standard variable tariff.
The rise apples to both gas and electricity, with the average dual fuel bill set to come in at £1,161 after its imposition. It follows the 12.5 per cent increase in electricity prices imposed last September.
- British Gas announces 5.5% price hike, affecting 4.1m UK households
- British Gas owner Centrica to cut 4,000 jobs
- British Gas owner Centrica loses 823,000 customers since June
You may, by now, be familiar with the standard unvarying excuse that the company trots out in an attempt to explain actions like this: A shrug of the shoulders and a “not our fault guv”.
The announcement was accompanied by a link to a YouTube video featuring Iain Conn, the boss of British Gas owner Centrica, who cried some crocodile tears for his customers, claiming to feel their pain.
He went on to blame half the increase on Government policies such as half hearted efforts to encourage green energy and smart metering, along with VAT. The other half was laid at the door of increasing wholesale energy costs.
But wait! There was, in addition, a new verse to the same old song. An ace in the hole to add some ballast to Mr Conn's bluster. The British Gas boss also pointed to the recent price increase that regulator OfGem announced for capped pre payment meter tariffs charged to mostly poor and vulnerable customers. The same forces were, he said, responsible.
The problem with that argument is that it is about as leaky as a Thames Water pipe because OfGem isn’t responsible for the prices Centrica sets for its customers. Centrica is.
Instead of exercising its financial muscle and the business acumen of its highly paid executives with a view to competing more closely with the rivals who have, despite all this, found ways to knock £300 or more off the top of its prices, the company has preferred to fall back on excuses and window dressing.
Look no further than the replacement of the standard variable tariff for new customers with an emergency tariff that looks very much like it for an example of the latter.
That these explanations haven't been finding much favour with British Gass customers was evident in Centrica's most recent results in which it had to ‘fess up to a mass exodus.
Business news: in pictures
Business news: in pictures
Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn't issuing shares, but rather, shares held by Spotify's private investors will be sold
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July. The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
Phillip Rasmussen, finance chief of technology company IQE, was killed in an accident while on holiday over the weekend. The company confirmed the 47 year old man had died while cycling in Menorca. A 25-year-old American man was arrested on suspicion of drink driving, after failing a roadside breath test.
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
That looks set to continue for the foreseeable future.
Ironically Centrica could be said, with its behaviour, to be doing more than any regulator could to encourage a genuinely competitive energy market. Its customers would be well advised to take advantage of that and treat its excuses with the contempt they deserve.
There is no reason to pour their money into its coffers, as five minutes on a price comparison website would make clear.