The chief executive of British Gas's parent company has made a bold proposal that could save UK households hundreds of pounds on their annual energy costs, calling for a fundamental shift in how the country funds its Net Zero ambitions.
The £200 Bill Reduction Proposal
Chris O'Shea, the £4.3million-a-year boss of Centrica, today claimed that household energy bills could be reduced by £200 per year if the government changes how it funds decarbonisation policies. The 52-year-old executive argued that moving these costs from electricity bills to general taxation would create a fairer system.
Speaking to Sky News, Mr O'Shea explained his position: "What we've argued for for many, many years is that the policy costs of decarbonisation which currently sit on energy bills should move to general taxation. That would take about £200 out of people's bills."
A Progressive Approach to Green Funding
The wealthy Scot, who took home £4.3million in Centrica's latest financial year, emphasised that the current system places an unfair burden on all households regardless of their financial situation. "General taxation is more progressive, so those with the broadest shoulders bear the biggest responsibility," he stated.
Mr O'Shea's compensation package included a base salary of £845,000, £1.4million from an annual incentive plan and £2million from a long-term incentive plan, though this represented a decrease from the £8.2million he received in 2023.
When asked by presenter Wilfred Frost whether he would personally be willing to pay more tax under this system, the Centrica boss responded unequivocally: "I personally would be happy to pay more. I think that's fairer. I believe in progressive taxation."
Growing Support for Policy Change
The proposal has gained significant support from influential think tanks and industry groups. The Resolution Foundation estimates that such a move would cut typical bills by around £160 annually and bring inflation down by 0.3 percentage points.
Meanwhile, the Institute for Government has also backed transferring funding of government energy policies to general taxation, noting that while it would require higher taxes or reduced spending elsewhere, it would particularly benefit those struggling most with energy affordability.
The Energy Crisis Commission, bringing together representatives from Energy UK, the Confederation of British Industry, Citizens Advice and National Energy Action, has similarly called on the Government to consider this approach in the upcoming Budget.
This intervention comes as household energy bills are set to rise again by 0.2% from January 1st, with Ofgem's new price cap increasing the average dual-fuel household bill to £1,758 per year.
