CRACKDOWN ON ENERGY RIP-OFFS

As EDF imposes second price hike in 4 months, Mrs May is set to announce cap on soaring bills

THERESA May is set to announce a cap on rip- off energy bills within weeks – as EDF’s tariffs soar for the second time in only a few months.

The French firm raised electricity costs by 8.4 per cent last month – but it sparked fury again yesterday with the news it will push through a second increase of 9 per cent in June.

The combined rises will add close to £100 to annual bills, affecting millions of households.

Critics said consumers were being taken for granted and the latest increase would ‘ hit those already struggling’.

But the Daily Mail understands the Government is working on a scheme to protect families which will include a cap, after pressure from MPs and campaigners to step in.

The Prime Minister’s spokesman said: ‘We are concerned by the planned increases.

‘We are committed to getting the best possible deal for households and expect energy companies to treat their customers fairly.

‘Wherever markets are not working for consumers, this Government is prepared to act.’

The energy department, BEIS, went further, saying measures to tackle ‘unacceptable’ increases will be announced shortly.

EDF Energy, which is majority-owned by the French government, blamed the price increase

on rises in wholesale costs. But it also blamed the UK government for imposing levies on the industry to fund a move to green energy and help poorer households with discounts.

This was rejected by the energy regulator. Ofgem’s Dermot Nolan said: ‘EDF’s second price rise in four months, when there has not been a dramatic rise in wholesale energy prices since it last put up prices, is difficult to justify and is further evidence that the energy market is not working in all consumers’ interests.

‘Energy consumers on standard tariffs risk being taken for granted.’

He added: ‘Ofgem and the Government are working on a raft of reforms to ensure fairer treatment for consumers and to make the market smarter and more competitive.’

A spokesman for Energy Secretary Greg Clark said: ‘This price rise will hit around half of EDF’s customers. It’s another sign the market isn’t working, and we will shortly set out proposals to help energy consumers as part of the Government’s Plan for Britain.’

EDF put up electricity tariffs by 8.4 per cent in March and cut its gas tariff by 5.2 per cent. The net effect increased the annual cost of a dual fuel

‘Systematically ripped off’

Standard Variable Tariff (SVT) by £13 to £1,082.

From June, electricity will go up by 9 per cent and gas by 5.5 per cent. This will add £78 to the dual fuel SVT, taking it up to £1,160.

The combined effect of the changes is to hit some 2.2million households with a rise of £91 in annual bills. More than two thirds of consumers are on an SVT with their supplier. These are at least £300 a year more expensive than the cheapest deals available.

Gillian Guy, of Citizens Advice, said: ‘People on EDF’s SVT are already feeling the effects of a price rise that came into force last month – a fresh hike of £78 a year will hit those already struggling.’ The organisation is calling for a price cap on some tariffs to protect the poorest house- holds. The idea won backing from MPs of all parties when it was proposed by former Tory Cabinet Office minister John Penrose last month.

Yesterday, he said: ‘ The energy market is manifestly not working and the Government needs to step in to protect the vast majority of consumers who find themselves on these standard tariffs.

‘A relative price cap will protect the 20million or more of us who are being systematically ripped off.’ In France, where EDF is 83 per cent state- owned, energy prices are already capped by the government. Analysis by Eurostat showed that in 2015 the average customer in Britain paid £15.52 per kw, compared with £12.18 per kw in France.

Last month, energy minister Jesse Norman denounced price rises by the major power firms as ‘unacceptable’.

Alex Neill of consumer group Which? said: ‘This latest price hike is disappointing … If energy companies fail to properly engage with their customers to help them find better deals, the Government and the regulator must step in.’

The energy giant said: ‘EDF Energy, in common with all suppliers, has faced a range of rising costs for some time, in both wholesale energy and non-wholesale energy costs and obligations.’

Chief executive Vincent de Rivaz said the industry faced ‘significant cost increases’, adding: ‘We have cut all the costs under our control without compromising our customer service.’

HERE we go again. Just weeks after raising electricity prices by a swingeing 8.4 per cent, French- owned energy giant EDF announces another 9 per cent increase.

Meanwhile, true to form, the regulator wrings his hands, wails that the price rise is ‘difficult to justify’ and urges customers, for the umpteenth time, to shop around for better deals.

Yet this time, there’s a difference. For at last, there’s hope of effective action, as Theresa May prepares to announce a cap on rip-off energy bills within weeks.

In normal circumstances, the Mail is wary of government intervention in free markets. But rapacious, mostly foreign- owned energy giants – swift to increase bills when wholesale prices rise, desperately slow to cut them when they fall – have exploited customers once too often.

As Mrs May said last month: ‘The market is not working as it should.’

Indeed, the Government has no choice but to intervene. And firms such as EDF have nobody to blame but themselves.