Centrica falls after UK government says it could be broken up

10th Feb 2014 10:20

Shares in British Gas owner Centrica fell after the UK government ordered a probe into high household bills and suggested the company could be broken up.The stock was the highest faller in the FTSE 100 index in mid-morning trading after energy minister Ed Davey asked the competition authorities to investigate profit margins of the energy companies as part of an ongoing review.Davey said margins made by the "big six" energy companies were higher than previously thought and highlighted margins, prices and large market share at British Gas.He pointed out that British Gas had charged among the highest prices to domestic customers in the last three years.He has written to energy regulator Ofgem as well as the Competition and Markets Authority, asking them to consider all possible remedies "including a break-up of any companies found to have monopoly power to the detriment of the consumer".Britain's Coalition government is facing pressure to force energy companies to cut high household energy bills after the opposition Labour Party pledged to freeze bills if it wins next year's General Election.Centrica said in a statement that it had complied with all requests for data it had received as part of the watchdogs' ongoing investigation."Further discussions have been arranged over the coming weeks in which we will fully participate. The data referred to in the Secretary of State's letter has already been fully disclosed and in the public domain for a number of months," the statement added."We share his wishes to see greater interconnection between the UK and other European energy markets and we also wish to see European markets open up to full retail competition."Centrica shares fell 3.2% to 304.2p at 10:56 in London. PW