British Gas owner to axe 1,500 jobs and warns against energy price caps

british gas

British Gas owner Centrica is to cut 1,500 jobs this year and has warned that energy price caps could push up household bills, reports The Guardian.

The company said warmer than normal weather so far this year had resulted in lower than expected energy consumption in the UK and North America. In the UK, wholesale oil and gas prices have fallen. The group has also been affected by the temporary closure of its North Sea gas storage plant.

The latest job cuts, from a 36,500-strong workforce, form part of a major restructuring announced by its then-new boss Iain Conn in July 2015. About 3,400 jobs went last year. In total, 6,000 jobs will be cut. The group achieved savings of £384m last year, but is aiming for annual savings of £750m.

The trading update came ahead of Centrica’s annual shareholder meeting on Monday afternoon.

The proposed energy price caps could drive up household bills, the group warned.

“Centrica does not believe in any form of price regulation. Evidence from other countries would suggest this will lead to reduced competition and choice, and potentially higher average prices. However our focus on competitive pricing, cost efficiency, improved service levels, rewarding loyalty and delivering propositions which customers want should leave us competitively well-positioned in order to deal with whatever form of market change is ultimately enacted.”

Centrica said it had proposed alternative ways to the government to improve the market and address its concerns, without resorting to price regulation.

Five of the big six energy companies have hiked prices in recent months. British Gas has frozen prices until August, but experts predict the company will follow suit because of rising cost pressures.

Centrica came under fire last month for handing Conn a pay rise of nearly 40 per cent for 2016. The former BP executive received a pay package of £4.15m – enough to pay the heating and lighting bills for nearly 4,000 customers on the company’s standard tariff.