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

Photo: Getty
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Peter Hitchens on Twitter seemed barely human – then he came round for tea

During his visit I realised I had an awkward duty facing me.

But what about Peter Hitchens?” everyone is asking after my last encounter with him. He came round to the Hovel, you see, the day before the column, in which I said all sorts of nasty things about him, appeared. The reason why he came round is complicated and boring, but suffice it to say that books were exchanged, in a spirit of mutual diplomatic tension.

I offered him a choice of red wine, whisky, or tea. It was five o’clock. (He was punctual, which unsurprised me. He chose tea; he is not a fan of intoxication. Aha! I thought, he’ll love this: as a foe of modernity in many of its aspects, such as duvets and central heating, he will appreciate the fact that I do not use tea bags. Loose Assam leaves, put into a scalded teapot. “Conservative in everything except politics” was a formulation – originally, I think, applied to George Orwell – that Peter’s late brother was fond of, and I thought my old-fashionedness would soothe him.

Not exactly: he noticed I was pouring semi-skimmed milk into the mug. Of course you put the milk in last when you are using tea bags. When pouring from a pot, you put the milk in first. Milk poured in afterwards does not emulsify satisfactorily. If you are one of those people who say “but how do you know if you’ve put in the right amount of milk?” then I exhort you to start trusting your pouring arm.

Semi-skimmed milk, I learned quickly, is a no-no in the world of P Hitchens.

“But Orwell himself,” I replied urbanely, “said that milk that was too creamy made the tea taste unpleasant. Not, of course, that I believe everything Orwell said, but on tea-making he is sound.”

Mr Hitchens demurred, saying that Orwell was referring to the equivalent of what we know today as Gold Top. This allowed me to go off on a little rant, a positive, life-enhancing rant, about how good Gold Top is, how my children love it, etc. We moved into the living room. I noticed my shoes were more old-fashioned than his. Come to think of it, they may have been older than him. They’re almost certainly older than me.

There was a mood of civility in the air. Slightly strained, perhaps, like his tea, but unmistakably present. Part of the reason was that I had mentioned our forthcoming meeting on a social medium, and two of my friends, one a well-known novelist, the other a well-known columnist, both women, both left wing, had asked me, extremely sincerely, to pass on their best wishes. They knew him of old, had worked with him, were fond of him. These are two women whose opinions I take very seriously indeed. The Peter Hitchens I knew, of column and Question Time panel, was clearly not the whole picture. If these women say he’s Basically All Right, or All Right enough to ask me to pass on their best wishes, then that is pretty much good enough for me.

During his visit I realised I had an awkward duty facing me. I was becoming increasingly conscious that, the next day, in newsagents throughout the land, the latest edition of this magazine would appear, and in it, on page 82, would be a column by me, which contained several jokes at the expense of P Hitchens, Esq. And I knew that this column would not escape his vigilance. I massaged the bridge of my nose and launched into a pre-emptive apology. “I think I had better tell you...”

He seemed to take it fairly well, though I’d not given him the full nature of my assault. When we were tossing insults back and forth on Twitter, he seemed barely human; now, in my living room, he all too clearly was. I suppose this is how we all see our enemies on Twitter: as botched versions of the Turing Test, spouting opinions that are quite clearly wrong in spite of all our well-reasoned arguments. The only variable is how quickly the arguments de-evolve into base invective. I have my own theory about this. It involves Lacan, so I’ll spare you.

A couple of days later I received an email from him, courteously asking after me and my latest troubles, the ones I can’t write about due to their immensity. It also contained the precise quote from Orwell regarding milk in tea. (“Ninthly, one should pour the cream off the milk before using it for tea. Milk that is too creamy always gives tea a sickly taste.” You have to love that “ninthly”.) “Tempus mutatur,” I replied... but noted, too, that there was no mention of That Column. I was rather impressed. 

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear