British Gas planned to cut up to 2,000 jobs and transfer half of them to India.

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Date / 16th July 2005

British Gas, the country's biggest energy supplier, was at the centre of a fresh storm yesterday after confirming it planned to cut up to 2,000 jobs and transfer half of them to India.

Union leaders threatened to call strike ballots after the company, owned by Centrica and employing 26,000, said around 1,000 back-office staff in Manchester and Oldham and a similar number in Solihull in the West Midlands faced the axe. Around 1,000 jobs will be outsourced in the UK.

British Gas said it would need far fewer administrative and data-processing staff for its new computerised billing system which would transfer almost 18m customer accounts over the next 12 to 18 months in a £430m investment programme.

It tried to sugar the pill by saying it had no plans to "offshore" any jobs at its UK call centres in Edinburgh, Leeds, Cardiff, Southampton and Manchester - unlike competitors such as Powergen and RWE, owner of npower, and financial services groups which have sent thousands of jobs overseas.

Mark Clare, managing director, said: "British Gas is wholly committed to maintaining its existing call centres in the UK."

It also said it had recruited 2,500 frontline staff over the past year, with a net 2,000 more due to be taken on this year, including 600 to handle customer calls, 400 sales agents and 1,000 engineers. "The overall impact will be jobs-neutral," officials said.

But Steve Bloomfield, head of utilities at Unison, Britain's biggest union, said the job cuts were "completely unacceptable" and that unions would fight management to stop the office closures.

"No one should be fooled that these savings will go towards reducing customers' bills or improving services."

Brian Strutton, of the GMB union, said: "British Gas makes big profits from British customers and they should support British jobs or the British people will not support them. We have already told the company not to go ahead with this decision.

"We will join forces with local communities and fight this proposal and, if necessary, I think our members will want to take strike action."

British Gas said last month it had lost a net 445,000 customers so far this year after raising retail gas prices by 12.4% last September and, with wholesale gas prices up 60% since February, plans to raise prices again in the autumn.

In a pre-close trading statement it warned that the fall in customers meant first-half profits would be down on last year. It claims to have reduced net customer losses to 10,000 a week compared with 22,000 earlier this year.

Centrica said separately it hoped to reduce pressure on gas prices as it announced it was taking a 20% stake in a proposed liquefied natural gas terminal at Canvey Island which could account for 5% of UK gas demand in the coming years.

End

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