by CJ Stone
British Gas: profits set to rise again this year So how’s that privatisation thing working out for you now? You know: the one where they sold companies we already owned back to us on the basis that it would create a “stakeholder economy” and that competition was going to keep prices low. “Competition”. That’s not really the word. It has actually had the opposite effect. Once one energy company puts up its prices, all the others follow suit. A better word would be “cartel”. It’s not as if these companies are starved for profit either. British Gas increased its margins by 24% to £742 million last year. Other companies showed a similar rise. Meanwhile the regulator accused them of profiteering, suggesting that they had increased their profits for duel-fuel customers by an astounding 733% between June and October 2011 through a slew of complex price hikes. It then went on to call for simpler tariffs and clearer bills, a suggestion that was later repeated by David Cameron. Not that it has made any difference.
According to Which, the consumer magazine, profits are set to rise even more this winter, from around £40 per customer to £65 over the last three months of 2012. That’s profit not price. It’s what they are intending to take directly from our pockets, to pay their shareholders, over and above costs. A few weeks ago David Cameron promised to force the energy companies to offer customers their lowest tariffs. The following day the energy secretary contradicted him. It’s not that energy companies will be forced to give their lowest tariffs, he said, it’s that the government will legislate to “help” customers get the best deal. It makes you wonder what the point of democracy is, doesn’t it, when the government seemingly has no control over energy prices in the country it purports to rule?
British Gas was privatised in 1986 amidst great public fanfare. It is now owned by Centrica which has interests in Norway, the Netherlands, North America and Nigeria. How many of you who bought shares back then are still doing OK from the sale? Do your dividends cover your increased energy costs? If you see Sid, tell him he was conned.