Why British Gas’s owner is right to restore its dividend

‘What’s worse, they’re paying the profits to shareholders,’ said a grey-haired woman ahead of me in the Co-op queue. ‘Bloody shareholders,’ her friend of similar age and class spat back. I guessed they were talking about Centrica, parent of British Gas, which at a time when domestic energy bills are rising 23 times faster than wages (as Frances O’Grady of the TUC puts it) has announced half-year operating profits of £1.3 billion, up from £262 million last year – and the restoration of a penny-per-share interim dividend after a three-year gap.

Both ladies looked likely to be beneficiaries of pensions nourished by dividends from the likes of Centrica, Shell and BP. But I resisted the temptation to interrupt them by quoting Centrica boss Chris O’Shea, who has said ‘You’ve got to restore [the dividend] at some point, you’ve got to give people a return – and I think our shareholders have been very, very patient’, while also acknowledging that ‘it’s difficult to see the word profits or dividends… when people are having a tough time’.