Centrica has appointed former UK cabinet minister Amber Rudd as a non-executive director at a time when the energy crisis has raised tensions between the UK government and the country’s largest suppliers.
Rudd, who served as home secretary and energy and climate change secretary during almost a decade as a Conservative MP, will join the company’s board on Monday.
The appointment comes as chief executive Chris O’Shea calls on the UK government to remove environmental and other social levies from energy bills and consider further measures to help consumers, who are facing steep increases in bills in April because of record wholesale gas and electricity prices.
Writing in The Sun on Friday, O’Shea, who was appointed in March 2020, said the government should fund environmental programmes through general taxation and suggested VAT be suspended on energy bills.
“Funding environmental costs through the bill means every customer pays the same amount, regardless of how rich or poor they are,” he wrote. “Whatever the government decides, we have to use this moment to look longer term to try to ensure the industry isn’t in this position again.”
Prime Minister Boris Johnson, however, has pushed back against calls for a VAT cut, calling it a “blunt” instrument” that would benefit many people who did not need extra support.
Analysts estimate that millions of households’ energy bills could rise by more than £700 a year after a price cap is adjusted upwards in April by industry regulator Ofgem to reflect wholesale prices and the costs of rescuing customers of failed energy suppliers.
Twenty-six providers have collapsed in the past five months and Centrica’s British Gas division has absorbed a large number of customers.
In government, Rudd was at times close to Johnson, describing him as a friend, but she quit as work and pensions secretary and equalities minister in 2019 after he sacked 21 Conservative MPs for defying the party line on Brexit. She was previously in a relationship with Kwasi Kwarteng, the current secretary of state for business, energy and industrial strategy, who has held multiple meetings with the heads of the UK’s largest energy suppliers in recent months.
Centrica said Rudd, who was energy minister during the establishment of the Paris climate change agreement in 2015, would bring “a wealth of real-world experience in energy”.
The UK has been particularly hard hit by the surge in gas prices that has swept Europe and much of Asia, because the country is heavily reliant on gas for electricity generation and heating its homes.
While renewables such as wind and solar are making up a growing share of the UK’s electricity supply, the phaseout of coal power generation and slow progress in replacing ageing nuclear plants that are going offline has supported gas demand.
Output from the UK continental shelf, which still supplies almost half of the country’s annual consumption, is also in long-term decline.
Centrica announced last month that it would continue producing gas in the UK for the next decade after failing to find a suitable buyer for all its upstream fossil fuels joint-business, Spirit Energy.
In recent years the company has moved to focus on its customer-facing businesses, in particular energy supply in Britain.
Since Charles Berry, who stepped down as chair in March 2020, was replaced by Scott Wheway, several non-executive directors have left the board.
The company said Rudd would join the board’s safety, environment and sustainability committee and its remuneration committee.