%VIRTUAL-SkimlinksPromo%Bosses at British Gas parent Centrica have warned that political intervention and price control threats increase the chance of "the lights going out" in Britain as the group revealed a customer exodus and falling residential energy profits.
New chairman Rick Haythornthwaite said political moves such as Labour leader Ed Miliband's pledge to freeze prices if the party wins power were "immensely damaging" and threatened crucial investment in the country's energy market.
"I think the reputation of Britain as a place in which to invest is under threat and the time to correct that is now, not after the 2015 election, by which time the possibility of the lights going out in Britain will be looming much larger."
He said the warning was not scaremongering, adding: "We've got to restart collaborative, constructive dialogue around these key issues. We cannot afford to wait, hostilities have got to cease."
Centrica reported a "difficult" set of annual figures as it said profits from its residential energy arm dropped 6% to £571 million after rising wholesale prices and a milder winter, which meant households have not had to crank up the heating.
The firm said it lost more than 360,000 gas and electricity customer accounts last year, down 2% to 15.3 million, as households switched to cheaper rivals after it hiked prices by 9.2% on average from November as part of a round of painful winter bill rises across the industry.
The group has shed around another 100,000 accounts so far this year, but said customer switching was "stabilising" after scaling back its price rise by 3.2% following a shake-up of the Government's so-called green levies on bills.
British Gas said it was "confident we can go back to customer growth", helped by the recent launch of new fixed price deals.
Across the group, operating profits were 2% lower at £2.7 billion last year.
Critics rounded on the group despite the drop in earnings, with shadow energy and climate change secretary Caroline Flint attacking "profits on the back of spiralling bills for hard-pressed consumers".
Lobby groups called for regulators to deliver better competition in the market and consider a full-scale investigation.
Adam Scorer, director of Consumer Futures, said: "Anger won't help consumers, only action to reduce their exposure to rising prices will."
"Ofgem needs to deliver vigorous competition in the market - or refer it to the Competition Commission if it cannot. And consumers should use their anger as a prompt to shop around for a better deal or make their homes more energy efficient," he added.
Centrica's shares have plunged by more than a fifth since the autumn following Labour's price freeze pledge, with the stock driven down further after Energy Secretary Ed Davey recently called for a full inquiry into the energy market that could see British Gas broken up.
In a letter, Mr Davey urged competition authorities to "think radically" as they consider whether to launch a probe.
He has raised concerns over Centrica's dominance in the gas supply market, querying why its margins were several times higher than for electricity, and claiming consumers could save £40 a year if they were brought in line.
British Gas revealed profit margins for its gas business stood at 8.9% in 2013 - far higher than the 0.8% electricity margin.
But outgoing finance director Nick Luff denied the group was taking advantage of its market leading position.
He said: "Scale does give us an advantage in terms of costs, which means we can offer good service and prices to our customers, but it doesn't give us an advantage that means other suppliers can't compete with us."
The group claimed on a dual fuel basis, its margins were competitive in the market and said two-thirds of its customers were on dual fuel tariffs.
Mr Luff said the firm "can't make promises" over prices for the year ahead, but added it would look to keep tariffs "as low as we can for as long as we can".
It said this year's milder winter weather was likely to see bills come down by 9% or 10% as households use less energy to heat their homes.
Centrica's results showed that higher wholesale prices and unseasonably warm weather at the end of last year saw British Gas suffer an 18% slump in operating profit in the final six months of 2013, which offset a better start to the year.
But it defended its right to make profits, saying that for every £1 made in profit, it invests almost double that amount in securing future energy supplies - building power stations and wind farms, as well as buying gas from abroad.
In a move to calm mounting public anger over rising energy bills, chief executive Sam Laidlaw has already said he would donate his annual bonus - worth a potential £1.7 million - to charity.
The group remained tight-lipped on reports that it was lining up candidates to replace Mr Laidlaw.
While he has not officially confirmed departure plans, it is widely believed he is preparing to call time after nearly eight years at the group.
Mr Haythornthwaite, who replaced Sir Roger Carr as chairman last month, said he was looking at long-term succession planning, but added Mr Laidlaw was "doing a great job for this company".
The group is still searching for a replacement for Mr Luff, who announced plans to leave last month.
Regulator Ofgem said Centrica's results showed consumers have been "voting with their feet" over price rises.
A spokesman said: "Nearly two million consumers are now with independent suppliers and several of the big suppliers are seeing customers leave them in large numbers.
"However, Ofgem wants to ensure that every aspect of the market is as competitive as possible - that is why we are also reviewing the state of competition in the energy market together with the
Office of Fair Trading and Competition and Markets Authority and are looking to make it easier for independent suppliers to compete against the Big Six."
12 ways to save £10,000 in 2014
Centrica warns over price controls
Mortgage rates are low at the moment, but even if you feel that your mortgage is a pretty good deal already, for a lot of borrowers there are better rates to be had. It's crucial to get the sums right – high upfront admin costs from a new lender or large early repayment fees from your existing mortgage provider could wipe out any savings. But, says David Hollingworth of brokers London & Country: "If you have an average standard variable rate (SVR) of 4.75%, a borrower with a £150,000 repayment mortgage over 20 years would pay £969.34 each month. Switching to a two-year fix with Norwich & Peterborough BS at 1.99% with £295 fee, free valuation and free legal work for remortgage would cut the payment to £758.11 a month, saving £211.23p.m." Over a year, that would mean a saving of £2,240, even with a £295 up front fee, and £2535 in following years. Potential saving: £2,535
Your home and contents insurance may be costing more than it needs to. Gocompare.comdata shows that 25% of customers who provided their buildings and contents insurance renewal price saved up to almost £160 by changing to a new provider. Potential saving: £160
With today's high cost of fuel, running a car is an expensive business. For a lot of people, particularly where public transport is sparse, giving up a car altogether is too big a challenge. But perhaps you could use it less, and take steps to bring down the cost of driving when it's unavoidable. The Energy Saving Trust says that just keeping your tyres pumped up correctly can save £31 a year, and turning off the air conditioning can save £77. Follow all the advice on the Energy Saving Trust's app, such as lift sharing and keeping your speed down, and the organisation claims you could save as much as £554 a year for a medium car covering medium mileage. Potential saving: £554
If you haven't changed car insurer recently, the chances are you could save a lot of money by doing so now. According to research from Consumer Intelligence for Gocompare.com, in October 2013, 51% of consumers could save up to £242.55 by moving to a new insurance provider. There are plenty of comparison sites to try, including AOL Compare, so it really doesn't take long to find a cheaper deal. Potential saving: £243
Start by finding out whether you could get a cheaper deal from a different energy supplier. If you haven't changed in the past, you probably can. According to gocompare.com, you could save around £309 a year just by switching to a cheaper deal (based on customers who switched energy supplier for both gas and electricity (dual fuel) using the Energylinx poweredGocompare.com platforms between 1 July and 30 September 2013).
Over the long term, there are plenty of ways to bring down bills that involve a relatively large outlay up front, such as ensuring your home is properly insulated. But just cutting your current energy use can have a huge impact on your energy bills. Some of the steps you can take are just a question of habit changing, such as switching appliances off instead of leaving them on standby. The Energy Saving Trust reckons the average household could save £50 and £90 a year just by unplugging or switching off at the socket. And turning down the washing machine temperature to 30 degrees, using a washing up bowl instead of leaving the tap running and only putting as much water in the kettle as you need can save you as much as £55 a year. Draught-proofing will save another £55, and proper 270mm loft insulation could save you up to £180 a year – taking into account the cost of fitting it the savings will take a couple of years to kick in. Potential saving: £689 (far more if you take all the right steps in the home)
Or at least, make your own. If you work in a town or city, the temptation to pop in and get a coffee can be strong. There's something comforting about sipping a hot coffee from those nice warm paper cups as you gear up for the working day. But if you stop to add up what it costs (including the cup), it may leave you cold. A Starbucks medium (OK, tall) latte costs £2.60 on the Strand in London. If you have one of those five days a week, 46 weeks a year (allowing for four weeks holiday), that means you are spending close to £600 – a tall price for a caffeine fix. If you make your own, a Bodum coffee maker costs £20 and a kilo of coffee costs around £13 and will make roughly 120 – 140. Missing the cup for the walk to work? Buy a Thermos mug for around £10. For £43, plus the price of milk, you can have coffee on the go all year round. Potential saving: £557
It's a familiar scenario for many well-intentioned would-be gym bunnies. You sign up super motivated. You buy new workout gear, perhaps you work out regularly at the start. But then something – a holiday, a nasty cold, late nights at work – breaks your momentum and you stop going to the gym. Eventually your workout clothes lounge around in the cupboard while the gym keeps your bank balance trim by taking that direct debit each month. Gym memberships vary, but if you pay £80 a month for full membership, that's £960 a year's worth of good intentions. Invest in some proper running shoes – you can spend a fortune but specialist shop Run and Become has decent shoes for £50 – and hit the road. Need motivation? Download a free app such as Couch to 5k to get you started and track your progress as you get fitter. Potential saving: £910
The range of mobile tariffs can be baffling. Many people end up on the wrong deal, perhaps paying for call time or extras they don't really need or use. There are a number of online tools and apps you can use to check your bill is not too high, such as Billmonitor and Mobilife. Enter your existing details and see if you could save money. In 2012, Billmonitor reckoned 26 million consumers in Britain were paying over the odds by as much as £164. The savings you could make will vary hugely, but it's certainly worth taking a look to see what you could save.
Apps like Viber and Whats App are also worth a mention as they allow you to text and call (Viber only) other users for free who have the apps on their smartphones. Whats App has ayearly subscription fee of around 65p, but the only other cost is the data on your smartphone plan if you're using 3G.
And when it comes to your broadband and home phone, it pays to find out if you are on the best deal. Dominic Baliszewski, telecoms expert at broadbandchoices.co.uk says: "Our own analysis has highlighted time and time again that a high proportion of customers do not actually switch broadband regularly enough to benefit from better pricing, which is crazy when you consider that switching can save you over £200 from your annual bill. Switching levels for broadband are woefully low when compared with energy or insurance services." Potential saving: £364
In the UK, households throw away an estimated 25 meals each month, worth a total of £60 a month or £720 each year. Avoid buying too much food, even when it seems like you are saving money. Try not to 'take advantage' of bulk buy deals you may not use, make good use of your freezer for fresh foods rather than putting them in the fridge and forgetting them, and change a few of your shopping and eating habits and you may save money.
Make a list and stick to it. Shopping online can help you avoid temptation, and if you do your shopping on Mysupermarket.co.uk, you could save even more. Enter your items as you would on a supermarket site, and it will find the cheapest supermarket for your needs saving on average £17 a shop, according to the site. On a weekly basis that makes £884.
Growing your own vegetables can also save money, although the set up costs can be relatively high if you are starting from scratch. But some foods are cheap and easy to grow, even if you have little space. If you are in the habit of buying bagged salad, you could easily save a significant sum by growing your own. Jane Perrone, gardening editor of the Guardian and author of The Allotment Keeper's Handbook, says: "The materials to grow your own probably cost something shy of £20 a year, for seeds and compost mainly - I usually use recycled containers." A standard bag of salad from a supermarket costs around £1, so if you would usually buy one bag a week, you would spend around £52 a year. Potential saving: £1,636
A Sky Sports bundle costs £43.50 a month, that's £522 a year. It's enough to take you somewhere sunny on holiday. It's enough to buy a whole new wardrobe full of clothes. Or, more importantly, several weekly food shops. Whatever else you could do with that money, it's certainly enough to make you think twice about whether or not you want to keep paying those subscription fees. Potential saving: £522
You might not be able to pay your credit card off straight away, but you can cut the cost. If your credit card has a rate of 18.9% and you have a balance of £5,000, then you could save £472 by doing a balance transfer to a credit card with a 0% introductory deal for the first six months. Potential saving: £472