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Anger after Scottish Gas owner reveals hike in profits

THE owner of Scottish Gas has faced a storm of criticism as it revealed a £606 million profit haul at its residential arm just months after hiking customer tariffs.

Centrica said an 11% rise in profits at British Gas residential came after last year's colder-than-normal weather resulted in the usage of gas leaping by 12%.

However, critics accused the energy giant of making huge profits on the back of spiralling bills for hard-pressed consumers, with the announcement coming just months after it raised its tariffs by 6% for around 8.4 million households at the end of last year.

Rutherglen and Hamilton West MP Tom Greatrex, Labour's Shadow Energy Minister, said: "People will not understand why just a few months ago Scottish Gas claimed they had no option but to put up their prices when now it looks like they're making huge profits on the back of spiralling bills for hard-pressed consumers.

"It is unacceptable David Cameron is letting the energy companies get away with inflation-busting price rises when they are already making huge profits and when people can least afford it."

Centrica said it paid more than £1 billion in tax last year and invested £2.7bn.

Chris Jansen, managing director of services and commercial at Centrica, said: "I completely understand our profits announced today will create a reaction with customers.

"I think it's important to remember that in 2011 it was a very, very mild winter ... so the country used a lot less gas, and actually our profits in 2011 were 20% down on 2010."

Centrica said it was too early to say if customers should be braced for further price hikes this year, but added there were upward pressures in the market after a 13% jump in wholesale gas prices for winter 2012/13.

Chief executive Sam Laidlaw insisted the group needed to make a "fair and reasonable return so we can continue to make our contribution to society and to invest".

Age Scotland called for a nationwide programme of home insulation to help thousands of pensioners living in fuel poverty.

A spokesman for the charity said: "Over half of single pensioner households in Scotland are in fuel poverty. So these profit figures are unlikely to be well-received by older customers who faced a stark choice this winter between heating and eating.

"In the long term, the way to tackle fuel poverty is through a nationwide programme to retrofit insulation in homes – a move that would save the average family £310 a year on energy bills."

Trisha McAuley, senior director at Consumer Focus Scotland, added: "We should not be surprised if consumers regard these results, and the warning of price rises to come, with a mix of resentment and dread.

"From the outside, our big energy companies seem nigh-on recession proof. They are able to pass on the risks that come with volatile commodity costs in ways that other, more competitive, markets just could not.

"The truth is we do need profitable energy companies who are able to invest in our ageing energy infrastructure.

"We do need to ensure the lights stay on and we plan our way out of dependence on imported fossil fuels."

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