British Gas boss: We will go bust if we don’t raise prices in winter

The boss of British Gas today said the company would go bust if did not raise household energy bills so it could make a profit.

Managing director Phil Bentley issued a staunch defence of the supplier’s decision today to increase its gas and electricity prices by six per cent but said he understood that “it’s tough out there”.

However he insisted: “If we sold energy at a loss throughout the winter, we would be out of business.”

British Gas’s move, first revealed in yesterday’s Standard, means millions of families will see their average annual dual-fuel bill go past the £1,300 mark — rising by £80.

The energy giant blamed higher wholesale prices and the cost of upgrading the national grid, but critics said parent company Centrica made a first-half profit of £1.45 billion in the first half of this year — up 15 per cent.

But Mr Bentley hit back, saying “For every £1 of energy we sell, only 5p of it is our profit. You name me another industry with margins that low.

“People say, ‘couldn’t you just wait and sell energy at a loss through the winter’. If we did, we would be out of business. We can run the business to invest in jobs, new sources of energy, in our making our customers’ homes more energy-efficient and giving money help to those who need it.”

Mr Bentley added: “It’s tough out there, I know that, but we are trying to help. If you’re struggling, call us, we’ll check that you’re on the right tariff, if you haven’t got energy efficiency we’ll sort it out for you, and for those who are really struggling, we apply the Warm Home discount [for some low-income households]. No one should be in a place where they can’t eat because of their energy bills.”

But consumer groups warned that the British Gas hike, which is almost certain to be followed by its rivals, meant that millions would suffer.

Ann Robinson, director of consumer policy at uSwitch, said vulnerable people would be “forced to face another winter where they are scared to turn on the heating for fear of the cost”.