Former Energy Secretary Amber Rudd joins board of British Gas owner

The former energy secretary Amber Rudd is joining the board of British Gas owner Centrica as it prepares to fight for an overhaul of the power market which she helped to create.

Ms Rudd is to become an independent director at Centrica as energy providers step up lobbying efforts for an overhaul of the domestic price cap, which has left them unable to pass surging wholesale gas costs on to customers and has sparked 26 corporate failures.

The 58-year-old led the energy department in David Cameron’s government between May 2015 and July 2016, when she backed a limited price cap on energy bills for vulnerable customers and worked on the UK’s contribution to the Paris global climate change accord.

Scott Wheway, the Centrica chairman, said Ms Rudd’s experience in energy would be “invaluable as we face the challenge of delivering net zero [carbon emissions] and helping our customers live more sustainably and affordably”.

Ms Rudd is an ex-girlfriend of the Business Secretary Kwasi Kwarteng, who has been locked in talks with the energy industry as it pushes for help to cope with the soaring wholesale costs.

Her appointment at Centrica was announced on Friday as Chris O’Shea, the company’s chief executive, used an article in the Sun newspaper to urge the Government to move environmental levies off energy bills and into general taxation as one measure to help reduce sky-high bills. 

Months of soaring wholesale natural gas costs have crippled energy businesses, and are expected to lead to a 56pc increase in average annual household bills to £2,000 in April, when the price cap is recalculated.

How does the energy price cap work?

Mr O’Shea also suggested measures such as suspending VAT on energy bills and financial support for the most vulnerable customers. He insisted British Gas, the UK’s biggest supplier with about 9m customers, “hasn’t asked for a bailout, we don’t want a bailout and we oppose any bailouts”.

While a global gas supply shortage is the main factor pushing up wholesale prices, UK energy policy over several years – such as the price cap, lax market regulation amid efforts to encourage competition, and the closure of storage facilities – has contributed to the problem.

Ms Rudd endorsed a report by the Competition and Markets Authority in 2016 that claimed customers were overpaying by about £1.7bn a year. The watchdog recommended a price cap for the roughly 4m customers on prepayment meters, considered the most vulnerable. At the time, Ms Rudd said: "This is a wake-up call to the big six [energy providers]."

The prepayment cap was introduced in 2017 but Theresa May, who succeeded Mr Cameron as prime minister, subsequently went much further, introducing a price cap on default tariffs covering about 15m households in England and Wales.

Ms Rudd also supported efforts to boost competition in the markets, and was in favour of onshore fracking for natural gas. She has been building a career in the private sector since leaving government in 2019.

Ms Rudd became home secretary under Mrs May but resigned in April 2018 in the wake of the Windrush scandal, when Caribbean immigrants were wrongly threatened with deportation.

She resurfaced as work and pensions secretary seven months later before quitting the cabinet in late 2019 in a row over Brexit, and decided not to fight again for her Hastings and Rye seat in the November 2019 election.  

In October it emerged she was quitting her role as an adviser at public relations firm Teneo to move to rival Finsbury Glover Hering, founded by her brother Roland Rudd. She also chairs the international advisory group of the UK arm of Equinor, Norway’s state-owned oil company.

Ms Rudd will join Centrica’s board on Monday, taking up a seat on the safety and environment committee as well as the pay committee.

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