Thousands face shock as energy bills leap by £430
Deadline throws new fuel on price row and bosses call for shake-up
ENERGY prices will be thrown back into the political spotlight this week when more than 100,000 households across the UK face a sudden hike in bills of up to £430 a year as their fixed rate deals come to an end.
More than a dozen key fixed price deals from seven leading suppliers are set to end on Wednesday. Customers who fail to switch to other deals in time face being moved on to expensive standard variable tariffs.
At the same time the Institute of Directors has called for customers to be given itemised energy bills listing all Government taxes and levies and the energy companies’ profit from each customer.
Energy industry sources believe such bills would reveal that profits per household are not excessive.
Customers of EDF Energy could see their annual bills rise by £436 while customers at First Utility could see price rises of £392 and those at ScottishPower could face an increase of up to £373, said price comparison firm uSwitch, which said average increases would be £289 a year. Average dual fuel energy bills are about £1,200 annually.
Following sharp increases in standard tariffs from five of the Big Six energy firms which dominate the market, EDF, Npower, SSE, ScottishPower and E.On (British Gas has frozen its prices till August), Prime Minister Theresa May strongly criticised the industry. She accused the market of not working, saying prices had increased by 158 per cent over the past 15 years, and in the Tory manifesto promised to intervene.
The Tories have promised to introduce a ‘safeguard tariff cap’ to extend the price protection of those currently on pre-payment meters to those on the poorest deals.
Labour has gone further and promised to create new ‘publicly owned energy provi-
sion’ and cap costs. Former Labour leader Ed Miliband’s promise to freeze energy bills in the run-up to the 2015 General Election saw the party’s support surge.
USwitch energy expert Claire Osborne said: ‘Farreaching price intervention is a red herring. A competitive market in which great savings are easily available will do far more to help energy customers who are paying more than they need to, by keeping the pressure on suppliers to offer the best deal and service possible.’
The Tories have promised a review of the energy market focused on the cost of energy. This was welcomed by suppliers who have long blamed rising wholesale cost and Government policies for rising bills. Their grievances have been given a boost by the Institute of Directors’ plan to ‘force energy companies to create a new transparent default tariff’ detailing their bill’s make-up.
Dan Lewis, Senior Infrastructure Adviser at the IoD, said: ‘Energy bills have become the latest political football, with both the Conservatives and Labour reaching for interventionist solutions.’