British Gas boss concerned for Scotland’s energy industry jobs

Michael RaceBusiness reporter Chris O’Shea was chatting with the BBC as a part of the Massive Boss Interview seriesSean FarringtonBusiness presenterChris O’Shea hasn’t lived in Scotland for many years however the boss of Centrica, the proprietor of British Gasoline, is fearful over the way forward for the power trade in his homeland.He’s involved that the “demise” of drilling for gasoline and oil within the North Sea and the transfer to inexperienced power is not going to create new roles rapidly sufficient to offset job losses.His wide-ranging interview with us follows a collection of adverse moments for the trade as hovering power costs pushed family payments up and noticed bumper dividends to shareholders and pay packets to bosses – together with him. British Gasoline additionally confronted a scandal over force-fitting prepayment meters within the houses of susceptible individuals who fell behind on payments, one thing he says the corporate does not do anymore.Right now O’Shea says his huge concern is the decline in jobs within the North Sea oil and gasoline trade. The UK’s largest oil and gasoline producer, Harbour Vitality, introduced job cuts earlier this yr. And this month, the Port of Aberdeen mentioned it might minimize roles within the face of what it described as a “staggering” fall in North Sea oil and gasoline exercise.”The power transition is the correct factor for us to do. It is important,” says O’Shea, declaring that British Gasoline now not explores for oil and gasoline within the North Sea.”What the world of disagreement is, is the tempo at which it must occur,” he tells the BBC’s Massive Boss Interview, drawing on private expertise.”I grew up within the city of Fife, which was surrounded by coal mines. I noticed the devastation when the coal mines had been closed through the miners’ strike and folks that had extremely well-paid jobs – they went to no work in any respect.”You have bought second, third-generation individuals that aren’t in work now. And I desperately need to keep away from that via this transition.”He says he discovered it fairly onerous to get a job after college and “bought a great deal of rejection letters”.”I do know what it is wish to be a bit fearful about getting a job,” he says.”I additionally know what it is wish to get a job that you simply like, and you discover out that you simply’re good at, it could actually change your life – it definitely did for me.”Nevertheless, the chief government is not any stranger to reducing roles, having axed the perfect a part of 5,000 quickly after he took cost through the top of the Covid pandemic in April 2020.”I wasn’t positive the corporate was really going to outlive,” he says. “The one method I may justify that to myself was I used to be making an attempt to guard 20,000 jobs, I could not defend all of them.”Since then, Centrica has taken on 1,700 apprentices and has dedicated to taking up yet another day-after-day for this decade a minimum of.Very like power costs lately, it has been a risky time within the hotseat for O’Shea. As wholesale power costs soared partly because of provide points following the outbreak of conflict in Ukraine, many small suppliers went bust as they had been unable to afford the fixed-price offers they’d locked into with prospects.”It is all all the way down to poor regulation,” O’Shea says, arguing that power regulator Ofgem ought to have been stricter on ensuring suppliers had sufficient money to handle dangers.”You can not have a system whereby the earnings are privatised and the losses are socialised,” he says.Ofgem advised the BBC its regulation meant the sector “now holds round £7.5bn in property, a major reverse from -£1.7bn through the disaster, which means they’re now higher protected towards failure, and the affect this has on buyer’s payments”.As power payments surged, there have been questions over bumper dividends to shareholders, and O’Shea’s personal wage and bonuses which hit £8.2m in 2023.”Traders make investments and so they need a return,” he says. “Individuals do not put cash within the financial institution and say, ‘it is okay, do not give me any curiosity’ and traders do not buy shares and say, ‘it is okay, do not give me any return’.”These dividends, O’Shea argues, are usually not generated from British Gasoline prospects, and are on account of different elements of Centrica’s diversified enterprise.”There may be little or no revenue that is made within the power retail enterprise. You are capped on the revenue that you could make at 2.4% of your income,” he says.The 52-year-old confronted an enormous public backlash after it emerged that debt brokers working for British Gasoline had been breaking into individuals’s houses to suit prepayment meters.”We’re not doing that for the time being,” he says when requested if this has resumed. However he argues the regulator Ofgem wants to inform companies easy methods to act when individuals do not pay and easy methods to discover out who can’t pay and who refuses to.”My coronary heart goes out to these individuals who cannot pay, however these individuals who select to not pay are freeloaders and we now have to discover a option to differentiate and go after the individuals who select to not pay, and to take away the misery from people who find themselves unable to pay,” he provides.He appears supportive of potential plans for the chancellor to announce aid for billpayers within the Price range, akin to reducing the present 5% charge of VAT charged on power.”Something that reduces the price of power, I’d welcome. “However the actuality is we now have bought to pay for it ultimately,” he warns.