During 2021, the energy market faced unprecedented challenges as global supplies of gas constricted and demand surged. This resulted in higher gas prices and led to over a third of all the UK’s energy suppliers going out of business over a short period of time. Because we manage the risks facing our energy retail business appropriately, we were adequately hedged and had sufficient capital to face the challenge.
The Directors alongside specialists in Corporate Affairs and Regulatory Affairs worked at pace with the UK Government and Ofgem, to limit the distress to customers by agreeing to take on and pick up the initial cost of onboarding around 700,000 customers from failed energy suppliers.
We also engaged parliamentarians across the UK to ensure they were up to date with the situation and provided information leaflets alongside drop-in sessions, to help answer their questions whilst raising awareness of the support available for constituents.
In recognition of household budgets coming increasingly under pressure with the rising cost of energy, we took additional action to support customers. We froze direct debits for customers over the winter, provided extra signposting of support, and launched a £2 million Winter Fuel Fund to specifically target our most vulnerable customers. An additional £2 million was added to the fund in February, to offer customers more support throughout 2022.
We also worked with the British Gas Energy Trust, an independent charity funded solely by British Gas, to run a nation-wide marketing campaign that encourages anyone in need of assistance with their energy bills to get in touch.
During 2021, the energy market faced unprecedented challenges as global supplies of gas constricted and demand surged. This resulted in higher gas prices and led to over a third of all the UK’s energy suppliers going out of business over a short period of time. Because we manage the risks facing our energy retail business robustly, we were adequately hedged and had sufficient capital to face the challenge.
These efforts led to a significant number of people coming forward and receiving the support they needed. We continue to work with Ofgem and the UK Government to identify ways of improving the robustness of the regulatory framework to ensure the sector is more resilient to similar crises in the future.
Towards this, we gave evidence at the House of Lords and discussed the need to introduce more robust controls with Ofgem – from making sure every supplier hedges properly, to ensuring they’ve the right risk management policy and amount of capital to deliver on their commitments to customers, which includes ensuring customer credit balances are protected. We’ve also encouraged Ofgem to spread recovery costs over a longer period to reduce the burden on hard-pressed households. Consequently, Ofgem has published an action plan, by which it intends to improve the financial resilience of energy suppliers.
British Gas continues to support customers in a number of ways including:
- Continuing to help customers manage their debt and giving them more time to pay, through payment plans and encouraging early meter readings. Last year 300,000 customers were supported in this way.
- British Gas has contributed £120 million to assist customers on low income through the Warm Home Discount in 2021.
- Providing energy efficiency improvements to thousands UK households.
- Supporting nearly 3 million customers on British Gas’ Priority Services Register, which receives around 5,000 calls to the dedicated phone line each week.
- Additionally, the British Gas Energy Trust funds 49 frontline advice services across England, Scotland, and Wales. All energy customers, not just those with British Gas, have access this help.
