Five questions answered on British Gas’s 2012 profit rise

"So no, I don't think customers will be celebrating."

British Gas today announced a profit rise for 2012. We answer five questions on the energy company’s rising profits.

By how much exactly did British Gas’s profits rise in 2012?

The company said it profits rose 11 per cent, with gas usage up 16 per cent.  

British Gas’s parent company, Centrica, also reported an adjusted operating profit of £2.7bn for 2012, up 14 per cent from 2011.

Where does British Gas say this rise comes from?

The company attributed the profit rise to customers turning up their heating in the cold weather and not to the 6 per cent gas and electricity prices rise it enforced in November of last year.

Chief Executive of Centrica Sam Laidlaw speaking to the BBC said that the firm’s profit margins per household were actually down and that the company had made just under £50 profit per customer household.

Have Centrica’s dividends to shareholders risen?

Yes, by 6 per cent. The company is also returning £500m to them.

What are the company’s critics saying?

Ann Robinson, director of consumer policy at the price comparison website Uswitch, told the BBC: "Seven out of 10 of us actually went without heating at some point during this winter and over a third of us have reported that we feel it's actually affected the quality of our life and also our health.

"So no, I don't think customers will be celebrating. I think they'll be wondering why on earth British Gas had to take this move in November when they are making such high profits."

What is Centrica’s saying in response to this criticism?

Also speaking to the BBC Chief Executive Sam Laidlaw said he recognized that times were “difficult” for UK households but insisted British Gas couldn’t have done any more to shield customers from price rises.

He added that "a 5pc margin on the business is the sort of margin we require,” and that Centrica provided a “vital source of energy to the UK.”

"Centrica is one of the UK’s most important companies, employing around 40,000 people, keeping homes warm and well lit, securing future energy supplies, innovating and investing and paying substantial amounts of tax to the Treasury each year," Mr Laidlaw said.

"We also have over 700,000 individual shareholders, all of whom benefit from the dividends the Company pays. Through our larger shareholders, many of them pension funds, our dividends also feed into the retirement savings of millions of people. It is important therefore that the group continues to grow and invest." Laidlaw said.

Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

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Will Jeremy Corbyn stand down if Labour loses the general election?

Defeat at the polls might not be the end of Corbyn’s leadership.

The latest polls suggest that Labour is headed for heavy defeat in the June general election. Usually a general election loss would be the trigger for a leader to quit: Michael Foot, Gordon Brown and Ed Miliband all stood down after their first defeat, although Neil Kinnock saw out two losses before resigning in 1992.

It’s possible, if unlikely, that Corbyn could become prime minister. If that prospect doesn’t materialise, however, the question is: will Corbyn follow the majority of his predecessors and resign, or will he hang on in office?

Will Corbyn stand down? The rules

There is no formal process for the parliamentary Labour party to oust its leader, as it discovered in the 2016 leadership challenge. Even after a majority of his MPs had voted no confidence in him, Corbyn stayed on, ultimately winning his second leadership contest after it was decided that the current leader should be automatically included on the ballot.

This year’s conference will vote on to reform the leadership selection process that would make it easier for a left-wing candidate to get on the ballot (nicknamed the “McDonnell amendment” by centrists): Corbyn could be waiting for this motion to pass before he resigns.

Will Corbyn stand down? The membership

Corbyn’s support in the membership is still strong. Without an equally compelling candidate to put before the party, Corbyn’s opponents in the PLP are unlikely to initiate another leadership battle they’re likely to lose.

That said, a general election loss could change that. Polling from March suggests that half of Labour members wanted Corbyn to stand down either immediately or before the general election.

Will Corbyn stand down? The rumours

Sources close to Corbyn have said that he might not stand down, even if he leads Labour to a crushing defeat this June. They mention Kinnock’s survival after the 1987 general election as a precedent (although at the 1987 election, Labour did gain seats).

Will Corbyn stand down? The verdict

Given his struggles to manage his own MPs and the example of other leaders, it would be remarkable if Corbyn did not stand down should Labour lose the general election. However, staying on after a vote of no-confidence in 2016 was also remarkable, and the mooted changes to the leadership election process give him a reason to hold on until September in order to secure a left-wing succession.

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