Ed Davey suggested British Gas had charged one of the highest prices to domestic customers in the last three years. Photograph: Getty Images.
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Six questions answered on Centrica's share price fall after suggestions British Gas could be broken-up

Why is Ed Davey investigating British Gas’s profit margins?

British Gas owner, Centrica, suffered a fall in share price today after the UK energy secretary investigated its profit margins and suggested the company may have to be broken up. We answer five questions on the potential break-up of British Gas.

By how much has Centrica’s share price fallen?

The share price fell by 3 per cent today after energy minister Ed Davey questioned the company’s dominance in the market. British Gas currently has 41 per cent of the domestic gas supply market in the UK, the largest share of any of the so-called "big six".

Why is Ed Davey investigating British Gas’s profit margins?

Davey said in a letter that profit margins made by the "big six" energy suppliers when supplying gas were actually higher than previously thought. In particular, he highlighted the high profit margin of British Gas and its large market share. He added that British Gas had charged one of the highest prices to domestic customers in the last three years.

He estimated that if gas margins were similar to electricity households would save on average up to £40 a year. Davey also provided information that showed Centrica saw profit margins of 11.2 per cent for its gas business in 2012. He suggested a market investigation.

Why has Davey said British Gas may have to be broken-up?

If an investigation found evidence of a monopoly this could result in the company being broken-up. As well as asking the competition authorities to investigate the profit margins as part of an ongoing review, he has written to energy regulator Ofgem and the Competition and Markets Authority asking them to consider all possible avenues "including a break-up of any companies found to have monopoly power to the detriment of the consumer".

What else has Davey said?

Mr Davey told the BBC: "This is a significant issue for consumers out there who are struggling with their energy bills."

In his letter he says: "Analysis of the profit margins of the energy companies shows that the average profit margin for gas is around three times that of electricity.

"There is also evidence that British Gas, the company with the largest share of the gas domestic supply market, has tended to charge one of the highest prices over the past three years, and has been on average the most profitable."

What has British Gas said about Davey’s comments?

In its statement, British Gas said: "We welcome this and have complied with all the requests for data which we have received.

"The data referred to in the Secretary of State's letter has already been fully disclosed and in the public domain for a number of weeks."

What have the independent experts said?

Some have queried why this publicly available information hasn’t been investigated by Ofgem already.

However, Richard Lloyd, the executive director of the consumer rights group Which?, told the BBC the intervention was hugely significant and suggested Davey agreed with Which? that the structure of the biggest energy companies is partly to blame for the price hikes.

"It will now put huge pressure on the regulators, in a matter of weeks, to announce that they're taking the first steps towards potentially breaking up the very biggest of the big energy companies," he added.

Heidi Vella is a features writer for Nridigital.com

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Donald Trump's healthcare failure could be to his advantage

The appearance of weakness is less electorally damaging than actually removing healthcare from millions of people.

Good morning. Is it all over for Donald Trump? His approval ratings have cratered to below 40%. Now his attempt to dismantle Barack Obama's healthcare reforms have hit serious resistance from within the Republican Party, adding to the failures and retreats of his early days in office.

The problem for the GOP is that their opposition to Obamacare had more to do with the word "Obama" than the word "care". The previous President opted for a right-wing solution to the problem of the uninsured in a doomed attempt to secure bipartisan support for his healthcare reform. The politician with the biggest impact on the structures of the Affordable Care Act is Mitt Romney.

But now that the Republicans control all three branches of government they are left in a situation where they have no alternative to Obamacare that wouldn't either a) shred conservative orthodoxies on healthcare or b) create numerous and angry losers in their constituencies. The difficulties for Trump's proposal is that it does a bit of both.

Now the man who ran on his ability to cut a deal has been forced to make a take it or leave plea to Republicans in the House of Representatives: vote for this plan or say goodbye to any chance of repealing Obamacare.

But that's probably good news for Trump. The appearance of weakness and failure is less electorally damaging than actually succeeding in removing healthcare from millions of people, including people who voted for Trump.

Trump won his first term because his own negatives as a candidate weren't quite enough to drag him down on a night when he underperformed Republican candidates across the country. The historical trends all make it hard for a first-term incumbent to lose. So far, Trump's administration is largely being frustrated by the Republican establishment though he is succeeding in leveraging the Presidency for the benefit of his business empire.

But it may be that in the failure to get anything done he succeeds in once again riding Republican coattails to victory in 2020.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.