Executive’s departure comes amid pressure on government to tackle soaring fuel bills
The managing director of British Gas is set to leave the business with a pension pot, shares and basic salary worth more than £10m, amid public and political disquiet over soaring household bills.
Phil Bentley, who oversaw a 6% increase in bills this winter, is expected to confirm that he is stepping down this year. He is believed to harbour ambitions to become a company chief executive in his own right.
According to the annual report of Centrica, the parent of British Gas, Bentley has an interest in just under 2m Centrica shares, worth £6.65m at closing share price. The 53-year-old executive is also expected to depart with a year’s basic salary, which came to £635,000 in 2011, along with his £3.6m pension pot.
Bentley’s imminent departure comes amid mounting political pressure on the government to tackle rising household bills. A poll of 2,000 people by Onepoll for Ovo Energy last month revealed that more than one third of homes are rationing power. Prime Minister David Cameron has pledged to force energy companies to offer the lowest possible tariff to customers, a vow that triggered confusion among political colleagues at first but will now see energy companies limited to four tariffs each for electricity and gas.
British Gas is a lightning rod for criticism over rising household bills, as the provider of energy to 15.8 million customers. According to estimates, every 1% increase in energy prices pushes about 40,000 households into fuel poverty – defined as when consumers spend more than 10% of their income on heating. According to one estimate, there are 2.7m fuel-poor homes in England alone.
Centrica and its peers in the “big six” group of energy companies argue that bills are being pushed up by the cost of upgrading the UK’s gas and electricity grids, rising wholesale gas costs and levies imposed on energy companies to pay for low-carbon alternatives.
The energy bill, published last month, promises further increases in fuel charges throughout the rest of the decade. It will allow energy companies to charge households an extra £7.6bn to pay for low-carbon electricity infrastructure.
The committee on climate change, which advises the government on reaching emissions targets, estimates that the new charges will add £110 to the average household bill by 2020.
Bentley joined Centrica as finance director in 2000 and was handed his British Gas role in 2007. Centrica declined to comment on Bentley’s imminent departure.
Centrica, which also owns power stations and has a significant presence in North Sea oil and gas production, is due to announce the outcome of a strategic review alongside annual results next month. Those figures are expected to see Centrica declare after-tax profits of about £1.4bn, with British Gas forecast to produce a profit of £575m.