British Gas lost more than 220,000 customer accounts in the first three months of this year, almost double the number for the whole of 2015, as consumers turned away from the big energy providers.

Centrica, the parent company of British Gas, said the number of domestic accounts fell by 224,000 to 14.44m between the end of December and the end of March. British Gas lost 119,000 accounts last year.

The company said the decline was due to a large number of customers coming off fixed-rate tariffs at the same time. Iain Conn, Centrica’s chief executive, said 88% of customers eligible to switch had decided to stay with British Gas.

Speaking after Centrica’s annual general meeting in London, he said: “If a lot of people take them up, then a lot end at the same time.”

The company’s board faced questions about pay, the treatment of customers, and climate change at the meeting in London. Centrica’s was the first big shareholder meeting since heavy defeats for BP and Smith & Nephew last week marked a fiery start to the 2016 AGM season.

Centrica’s chairman, Rick Haythornthwaite, told the meeting that 85% of investors had approved the company’s remuneration report. At last year’s AGM, only 67% of investors voted in favour after concerns were raised about the pay deal for Conn, who was hired from BP.

Centrica paid Conn £3m for his first year in the role, during which underlying profit fell and he announced 6,000 job cuts by 2020. In a trading update, Centrica said half those cuts would come this year and that 800 people had left in the first three months of 2016.



John Farmer, a regular critic of UK boards at AGMs, said Conn was overpaid and that Centrica’s strategy was muddled. He compared Conn to Marc Bolland, the departed chief executive of Marks & Spencer, arguing that Conn’s experience in the oil industry was not the right fit for Centrica. Bolland, a food retailer, failed to fix M&S’s clothing business when he was in charge.



Haythornthwaite said the comfortable vote for the pay report indicated that shareholders largely approved of the deal the company struck to recruit Conn. He added that Conn was the right person for the job and that the way he conducted himself in trying to overhaul Centrica was a cause for celebration.

However, the GMB union said British Gas workers were demoralised by Conn’s job cuts and that the business was under strain. “Staff are confused and disillusioned, managers don’t know if they’re staying or going and the only word from the top is cut, cut, cut,” said Brian Strutton, GMB’s national secretary.



When Conn’s pay was revealed last month, fuel poverty campaigners noted that the company was among those criticised by the Competition and Markets Authority for overcharging customers. Centrica appeared happy to discuss the number of customer departures as evidence that there is a competitive energy market in the UK.

Fuel poverty campaigners at the meeting accused it of heavy-handed methods in imposing prepaid gas meters on customers and asked the Centrica board to link bosses’ pay to winter deaths from fuel poverty.

Conn said it would be better for British Gas customers if Britain voted to stay in the EU at the referendum on 23 June. He said the UK would rely on imports for more of its energy in future and that it was better for the country to be at the table in Europe when prices were set.

Bruce Duguid from Hermes Equity Ownership Services asked the board to set carbon reduction targets for its customers as well as for its own output, because 90% of emissions associated with Centrica occur with customers. Haythornthwaite said it was a good idea, but the time was not right yet.

Centrica said it was on track to make £750m in cost savings by 2020 and that its UK business returned to profit in the first quarter of 2016.



