The shamelessness of the energy companies shows why we need a price freeze

British Gas's suggestion that households should simply use less energy is blackly humorous. But customers won't see the funny side.

Following last week’s announcement that SSE, the biggest supplier of energy to Welsh households, is to increase prices by 8.2%, yesterday came the announcement that Britain’s second biggest supplier, Centrica (AKA British Gas) is to follow suit with a 9.2% hike. Though customers will not see the funny side, the press release from British Gas, defending its decision, is a blackly humorous read. It begins with an acknowledgement that Ed Miliband is right: "the cost of living is rising faster than incomes". Then there’s a passage of hand-wringing regret that despite these tough times for customers, our bills have to go up by almost 10% to maintain their profitability. Before, finally, in a statement almost beyond parody, the company’s managing director, Ian Peters, reassures us: "A price rise doesn’t necessarily mean energy bills have to go up too. The amount you pay depends not just on the price, but on how much gas and electricity you use."
 
And he’s right, of course. You could just not turn on the boiler or the cooker and save a fortune. Why didn’t we think of that earlier? It would certainly make life easier for David Cameron, who, having so spectacularly failed to stand up to the energy companies in the interests of ordinary families, looks like a man who would give anything to make the problem go away.
 
Since I was having such fun reading the press release, I thought I’d take a look the Annual Accounts and Report for British Gas’s parent company, Centrica, to see if they were as much of a laugh. I was not disappointed.
 
Sam Laidlaw, the group’s chief executive, concludes his introductory remarks with the cool observation that "Centrica has a robust balance sheet and generates strong cashflows". He’s not kidding. British Gas – the bit putting up their prices today – made a post-tax profit of £1.09bn last year, up from the £1.01bn it made in 2011, though not as much as the £1.22bn it made in 2010. Within that consistent £1bn-plus profit, the sales to residential customers have been looking good too: up to £606m from the £544m posted in 2011.
 
The bit of the company generating the energy to sell to British Gas (i.e. itself) is called Centrica Energy, and its numbers are even better. In 2012, the energy generation arm made a post-tax profit of £1.2bn, £200m better than the year before and £500m better than 2009, the last year a Labour government was in charge. Little wonder the smiles are so broad on the faces of the board members’ pen-pictures, when share prices have risen by a third since May 2010 and top managers’ salaries with them: Mr Laidlaw’s total remuneration was almost £5m in 2012, his understrapper at British Gas making do with £3m.
 
What the accounts don’t tell us, of course, is the real amount it costs Centrica to generate the energy which it then sells on to British Gas at the going market rate – a market rate that itself reflects the wholesale prices set by the big six companies. It’s a circular process - in which the only real loser appears to be the paying customer at the end of the pipeline or the power cable, watching nervously as the wheel spins ever faster in the black-box under the stairs. Labour can’t stop the wheel turning, but we can freeze the price of each revolution and therefore your overall bill. And we will.
The entrance to Leicester's British Gas Centre. Photograph: Getty Images.

Owen Smith is Labour MP for Pontypridd and Shadow Secretary of State for Work & Pensions.

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Labour to strip "abusive" registered supporters of their vote in the leadership contest

The party is asking members to report intimidating behaviour - but is vague about what this entails. 

Labour already considered blocking social media users who describe others as "scab" and "scum" from applying to vote. Now it is asking members to report abuse directly - and the punishment is equally harsh. 

Registered and affiliated supporters will lose their vote if found to be engaging in abusive behaviour, while full members could be suspended. 

Labour general secretary Iain McNicol said: “The Labour Party should be the home of lively debate, of new ideas and of campaigns to change society.

“However, for a fair debate to take place, people must be able to air their views in an atmosphere of respect. They shouldn’t be shouted down, they shouldn’t be intimidated and they shouldn’t be abused, either in meetings or online.

“Put plainly, there is simply too much of it taking place and it needs to stop."

Anyone who comes across abusive behaviour is being encouraged to email validation@labour.org.uk.

Since the bulk of Labour MPs decided to oppose Labour leader Jeremy Corbyn, supporters of both camps have traded insults on social media and at constituency Labour party gatherings, leading the party to suspend most meetings until after the election. 

In a more ominous sign of intimidation, a brick was thrown through the window of Corbyn challenger Angela Eagle's constituency office. 

McNicol said condemning such "appalling" behaviour was meaningless unless backed up by action: “I want to be clear, if you are a member and you engage in abusive behaviour towards other members it will be investigated and you could be suspended while that investigation is carried out. 

“If you are a registered supporter or affiliated supporter and you engage in abusive behaviour you will not get a vote in this leadership election."

What does abusive behaviour actually mean?

The question many irate social media users will be asking is, what do you mean by abusive? 

A leaked report from Labour's National Executive Committee condemned the word "traitor" as well as "scum" and "scab". A Labour spokeswoman directed The Staggers to the Labour website's leadership election page, but this merely stated that "any racist, abusive or foul language or behaviour at meetings, on social media or in any other context" will be dealt with. 

But with emotions running high, and trust already so low between rival supporters, such vague language is going to provide little confidence in the election process.