The bumper profits of Centrica and Shell are indicative of the government’s long-term weakness

Centrica boss Chris O’Shea’s comments on the company’s restarted dividend were unfortunate. But both energy companies and politicians are going to have to find better answers to some tough questions, argues James Moore

Winter of discontent: anger is mounting over rising energy bills (Getty/iStock)

CEOs, eh? They spend plenty of money on batteries of in-house advisers, agencies, social media gurus and so on, only to put their feet squarely in their mouths when faced with a PR challenge.

Is this because they ignore the advice they’re given? Or because they only hear what they want to hear? Or because they only ever get told what their advisers think they want to hear? Or because they just hire the wrong people? Perhaps someone should ask Centrica boss Chris O’Shea.

O’Shea admittedly had a difficult job in front of him when it came to presenting the British Gas owner’s results because Centrica’s profits have behaved like someone chucking a lit match into a room full of its product. Kaboom!

Like many companies, this one likes to report multiple different measures of profit. Centrica has, on my numbers, seven. But you could make the case for eight. I might be missing some so, I dunno, ten?

But here’s what they mostly say: This company is rolling in money. Adjusted (no, I’m not sure what that means either) operating profit? It more than quintupled to £1.34bn. Kaboom! Total Group adjusted Ebitda (the city likes this one)? It more than doubled to £1.66bn. Kaboom! And so it goes on.

Amid all this corporate bonhomie, Centrica restarted its dividend, which is where things started to get sticky for O’Shea, because he had to justify that. Let’s be clear, there’s nothing wrong with companies paying dividends. That’s what they’re supposed to do. They help us with our pensions for a start. But when people have the bailiffs at the door because they can’t afford their bills, fattening shareholders’ wallets starts to become a very a tough sell. Best left for another day when the pressure on customers is less intense. Which it will be eventually, or at least you can certainly make the case.

Investors, whom we are told have been agitating for the payout’s return, surely ought to be able to see that. They don’t live in a vacuum, even if some of the city’s big money managers like to act as if they do.

Centrica nonetheless took the decision to pay. And that was when O’Shea put his foot in his mouth.

“The vast majority of our shareholders are Sids. They’re struggling as well,” he declared.

And... oh God, stop. Just stop.

The “Sids” that O’Shea was referring to are the people who bought British Gas shares when it was privatised, an exercise backed by one of the most successful ad campaigns the UK has seen. “Tell it to Sid,” was the slogan.

And sure, there probably are Sids who are struggling today. But if you can afford to hold shares you’re probably not in same position as a family on universal credit wondering whether the choice will be freezing or doing without food come the winter. Not even close.

O’Shea, who has passed on one bonus but has been tight-lipped about what other remuneration might be coming his way, would have been better off keeping his mouth shut or saying something bland like: “Companies pay dividends to help pension funds, which is our job. We will also do our best to help customers.”

He also mentioned the windfall tax. You know, the one the energy industry bellyached about. And he made the case that domestic energy consumers aren’t the main source of Centrica’s profits. But it’s all energy, isn’t it? And the ultimate source of any energy company’s profits is the end user.

Moving on to firmer ground, he said the government should do more. Now, he was right about that. It should. Trouble is, the gruesome twosome competing to lead the Tory party are too busy speaking to a small, hard right-wing selectorate. Some of those Tory party members, perhaps quite a few of them, are likely to be Sids.

This brings us to on to Shell. Yes, Centrica wasn’t the only energy company to report bumper profits. Shell’s were at a record, close to £10bn, and it announced it was spending £6.5bn of them on its shareholders. Kaboom? Yes, Kaboom. Again.

Investing in renewables for a net zero future? Anyone? I know that’s not the main talking point here but it ought to be among them. We should start talking about renewables at this point, because here’s what a greener future does: It stops us being in hock to the Shells and the Centrica of this world, and to wholesale energy markets. Beyond that it decreases the impact of people like Vladimir Putin whose malign influence has pushed the market into the stratosphere.

All this serves as a compelling case for going green as quickly as possible.

But back to bills, the main talking point. O’Shea and his fellow CEOs are going to face the same, hard, questions every time they report bumper results. They need to find some better answers. So do Britain’s politicians because people’s anger is mounting and there are some real winter horror stories on the way.