Scottish Gas pledges to donate 10% of profit as energy price cap to rise

Scottish Gas has pledged to donate 10% of its profits during the energy crisis to help people struggling with rising bills.

The money will be provided through the British Gas Energy Support Fund, which gives grants to those most in need.

Thousands of customers will receive an average of £750 per household according to the firm, which operates as Scottish Gas in Scotland and British Gas across the rest of the UK.

It comes as Ofgem, the energy industry regulator, is expected to announce another huge rise in the energy cap on Friday as global gas prices soar.

Experts have forecast that the cap could rise by 80% from October to more than £3,500. It would represent the largest increase seen by consumers, after the cap rose by 54% earlier this year.

The cap, which limits the rates suppliers can charge households on a standard variable tariff for each unit of energy they use, will be in place from October 1 until December 31.

It also follows a letter to the UK Government from the British Chambers of Commerce (BCC) urging ministers to hand more power to Ofgem, cut VAT and introduce pandemic-style emergency grants to help enterprises facing rocketing costs.

British Gas Energy’s pre-tax profits were £98m in the first half of 2022, meaning its initial contribution would be £9.8m.

The supplier said it will immediately boost this to £12m over the winter period when energy usage is highest.

Chris O’Shea, chief executive of Centrica, the parent company of British Gas Energy, said: “The current cost-of-living crisis requires all of us to think differently.

“As a responsible business we want to do more to support our customers during this difficult time.

“Committing 10% of our profits for the duration of the energy crisis will mean we can target help at those who need it the most.

“This increased investment in supporting our customers adds to the financial support and advice we already offer and ensures more grants will be available as we go into this winter.”

British Gas said it is offering the largest voluntary aid package of any UK energy supplier, with a total fund of £18m over the last eight months, including the new funding which will be backdated to the start of 2022.

On Thursday, Which? warned the Government to raise its energy bills discount by at least 150% or risk pushing millions of households into financial distress.

The consumer watchdog said the Government’s financial support for all households must increase from the current £400 to £1,000 – or from £67 to £167 per month from October to March.

The existing support package is inadequate to protect living standards for those on the lowest incomes, it said.

The Scottish children’s commissioner has written to Ofgem calling its attention to the impact on vulnerable children.

Bruce Adamson wrote: “It is beyond dispute that unfettered and unmitigated energy price rises risk pushing more children into poverty, and those children already in poverty into destitution.”

When the Government first announced its financial support package in May, the energy price cap was predicted to reach around £2,800 in October.

Analyst Cornwall Insight now predicts average energy bills will increase to £3,554 in October and £4,650 in January.

On Wednesday, chancellor Nadhim Zahawi insisted “nothing is off the table” when it comes to action on soaring energy bills, but added that a freeze in the price cap would not deliver “targeted help” for those who need it most.

Labour has called on Tory leadership hopefuls Rishi Sunak and Liz Truss to expand the windfall tax on oil and gas companies.