Biggest shock yet as another power giant raises prices

Utilities firm Npower has announced the largest price rise yet this year as it followed in the footsteps of sse and British Gas to hike bills by 10.4 per cent.

the firm blamed government energy reduction schemes for the rise, alongside increases in the cost of delivering power to homes and the raw materials required to generate energy.

NPower is the third of the Big six energy companies to increase prices in recent weeks.

Prime Minister David Cameron has come under increased pressure to tackle escalating energy bills.

labour has promised a 20month price freeze if it comes to power in 2015, a promise tory and lib Dem ministers have branded a “price con” while being unable to find a response to it. the increases have also seen the energy companies, led by sse, claiming that “green taxes” such as the carbon floor level should be scrapped.

labour leader ed Miliband said the latest announcement underlined the need for a price freeze. “Neither the energy companies, nor the government, want labour’s price freeze because they are content for prices to carry on rising at 10 per cent a year,” he said.

“We’ve got a Prime Minister who is standing up for the energy companies, not hard-pressed families. that’s why we need labour’s price freeze.

“the reason prices are going up is because you’ve got a broken market and you’ve got companies that are overcharging people. that’s why we need to take action.”

But Npower chief executive Paul Massara used the price rise announcement to attack labour’s price-freeze policy.

Asked for Mr Cameron’s response to Npower’s announcement, his spokesman said: “Nobody wants to see higher bills. He very much understands why households are angry.”

energy secretary ed Davey said the UK government would continue to press for firms to be transparent over any price rises.

He added that there were now 15 independent companies competing with the so-called Big six, so consumers had more choice of supplier.

in scotland, the sNP has promised to cut bills by having the taxpayer pay for green taxes instead of the energy companies.

Yesterday, deputy first minister Nicola sturgeon said: “it is extremely disappointing that Npower has followed British Gas and sse with a significant hike in fuel prices, which will cause a 10.4 per cent increase to households, many of which are already struggling to pay their energy bills.

“We need a sustainable solution to the problem of energy bills, which is why, with the powers of independence, this government would tackle fuel poverty head on by reducing energy prices by 5 per cent or around £70 per household and meeting the costs of fuel poverty and energy efficiency schemes through government spending.”

in addition to the Big six rises, the smaller firm Co-operative energy last week said it would be adding an extra £4.78 a month to the average bill, but said it was absorbing half of the rising costs into the business rather than passing them on to the consumer.

“the floodgates have been well and truly opened, and with Npower’s price rise confirmed, we’re halfway to a full-house of price rises from the big six energy providers,” said Jeremy Cryer, energy spokesman at price comparison site Gocompare.com.

“Winter price hikes are unwelcome, yet unfortunately entirely predictable. But it’s not over yet, and scottish Power, e.oN and eDF will surely reveal their price hikes soon too.”

Mr Massara, meanwhile, insisted the company aimed to only produce profits of 5 per cent cent at its retail arm, a figure he considered a “fair return”.

“We will take steps where we can to reduce the impact of the external influences on energy bills,” he said, adding that the