Another windfall tax isn’t the answer to Centrica’s profits

British Gas has behaved disgracefully towards energy customers who have fallen into arrears, sending agents to break into their homes and install prepayment meters – activities for which the company deserves to be ordered to pay millions of pounds in compensation. Meanwhile, Centrica, the owner of British Gas, has just reported full-year profits of £3.3 billion, more than three times that it made in the previous year.  

Both are true, yet that doesn’t mean they are connected. When you drill down into Centrica’s profits you find that the vast majority are being made in the upstream part of the business – producing oil and gas – and in trading in the wholesale market. Only £72 million of those profits were derived from the retail side of the business, selling gas and electricity to consumers. Given that British Gas has 7.5 million domestic customers, it works out at just under a tenner per household.