British Gas gives vulnerable customers £50 credit

British Gas will be reducing the bills of about 340,000 of its Essentials discounted tariff customers by £50 to help with their winter fuel bills, the company announced today. The payments are part of a £37m investment by the firm to support vulnerable customers; the remaining £20m will be put in the British Gas Energy Trust, a charity which pays grants to people in arrears with their energy bills and other household bills. It also funds voluntary sector organisations to provide money and debt advice. British Gas, along with the other big domestic energy suppliers, has come under fire for putting up gas and electricity prices – despite reporting big profits – at a time when many household are struggling to meet the cost of staying warm during the prolonged cold snap. British Gas increased prices for its gas and electricity by 7% last year. Scottish Power, npower and Scottish & Southern Electric also announced similar increases last year, while E.ON yesterday announced a 9% rise in the cost of electricity and 3% for gas . The companies blamed the increases on a steep rise in the wholesale cost of gas, which rose by 53% last year, and electricity, which rose 23%. Ian Peters, managing director of British Gas Energy, said: "We know money is very tight for many people in Britain right now, particularly our elderly, poor and disabled customers. That is why we promised to hold our Essentials prices throughout the winter – and it's why today we are announcing this additional one-off payment to provide extra help following the recent extremely cold weather." The £50 payments will be made as credits on customers' winter bills. Prepayment customers will receive the credit direct to their meter. The small number of customers for whom these payment methods are not appropriate will instead receive a cheque. Peters added that he expects the majority of the money paid into the trust will be distributed throughout this year and next year. But Audrey Gallacher, head of energy at Consumer Focus , said: "British Gas customers on the lowest incomes will benefit from this move to put money back in their pockets, and we welcome this substantial investment. However, the wider issue is making sure all customers are paying a fair price for their energy and, unfortunately, consumers simply don't believe that is the case. "Suppliers have been quick to put up customer prices as wholesale costs rose in the lead-up to this winter, but consumers will feel that, unfairly, they haven't felt the benefits of low wholesale prices for the last two years. Customers need to have confidence in the price they're being asked to pay and Ofgem's energy review must help to achieve this."