Customers should be worried about the new boss at British Gas
|
Version 0 of 1. Has any new chief executive been as busy as Centrica’s Iain Conn? Since arriving in January, he has issued a kitchen sink job on the finances, cut the dividend and launched a wholesale review of the company. Not only that, but he’s had to find a new boss to run his most high-profile division, British Gas, which has been operating under caretaker control since Chris Weston’s departure for Aggreko last year. Now he’s got his man – Mark Hodges – a chap who’s spent pretty much his entire career in insurance. Never mind Mr Hodges’ lack of energy experience, Centrica was spinning that he’s a restructuring guru. His track record at Towergate and Aviva indeed bears that out. But it’s hard to see him having too much input into Mr Conn’s review proposals, given that they’re being published less than four weeks after Mr Hodges starts. However, surely it will be his ability to negotiate with external regulators and the government that will be equally, if not more, critical. For starters, Ed Miliband could end up in Number 10 on a manifesto pledge to cap household energy bills. Whether a Labour administration would be kindly disposed towards a Centrica boss earning the thick end of £4m-a-year, I’ll leave you to guess. But even if David Cameron is returned to office, Mr Hodges still has a Competition and Markets Authority investigation to deal with. This could be painful for Centrica. But if anyone is adept at getting a good deal for his employers and shareholders in testy negotiations, it’s Mr Hodges – possibly not always with the best outcome for customers. For, while Mr Hodges was running Aviva Life UK, he oversaw the deal which allowed Aviva to keep a chunk of the so-called “surplus” funds built up over the years by its with-profits policyholders. It may have been an outcome condemned by Which? as “a sad day for consumers” and by Claire Spottiswoode, Aviva’s policyholder advocate, as favouring “shareholders over customers”. But shareholders in Centrica will take heart. Even as customers may brace for the worst. |