BRITISH Gas has sparked widespread anger by announcing a major hike in electricity bills for more than 3 million households.
The country’s largest energy supplier said it would “reluctantly” raise the price of electricity by 12.5pc for its customers on standard variable tariffs from next month. Gas prices will remain flat but for the 3.1 million customers on standard dual-fuel tariffs bills will rise by £76 a year to £1,120 on average.
The company, which trades as Scottish Gas north of the border and has around 900,000 Scots customers, is the last of the so-called ‘Big Six’ suppliers to raise rates this year while blaming rising costs related to energy network upgrades and policy programmes. But consumer groups have branded the hike “unjustified” and a “slap in the face” to families amid calls for greater regulation with fears that a fresh round of increases could hit households this winter.
Peter Earl, from comparison site Comparethemarket.com, said: “This will be a big disappointment to British Gas customers who would have been relieved to be with the only Big Six provider not to hike prices this year.” “As the final member of the Big Six completes the ‘full house’ of price rises, the big loser is, once again, the hard-pressed British consumer.” Will Hodson, co-founder of consumer collective The Big Deal, said: “British Gas announcing a price rise as they make half a billion in profit is the ultimate slap in the face for families. Their standard tariff now costs £286 a year more than the cheapest deal on the market.”
The company, which is owned by Centrica, said that it was leaving gas prices unchanged but that its standard electricity tariff will rise by 12.5 per cent from 15 September.
British Gas last raised prices in November 2013 and chief executive Mark Hodges said yesterday that some costs had risen steadily since then, including “government policies to subsidise renewable energy, social levies, delivery to customers’ homes, and the nationwide smart metering programme”.
He said: “We held off increasing prices for many months longer than most suppliers in order to protect our customers from rising costs, so it is a difficult decision to have to announce an increase in electricity prices.”
British Gas’s move follows a string of similar announcements earlier this year from EDF Energy, SSE, E.On, nPower and Scottish Power.
A spokesman for the Department for Business, Energy and Industrial Strategy said: “Energy firms should treat all their customers fairly and we’re concerned this price rise will hit many people already on poor-value tariffs. Government policy costs make up a relatively small proportion of household energy bills. Wholesale prices are the bigger portion of household bills and are coming down.”
Business and Energy Secretary Greg Clark wrote to regulator Ofgem in June asking what action it intended to take to safeguard customers on the poorest value tariffs and the future of the standard variable tariff. Since then, Ofgem has committed to taking action, saying that it would consult with consumer experts to develop ways of safeguarding tariffs.
Ahead of June’s general election Theresa May pledged to introduce price controls on energy bills.
But Greg Clark confirmed that only 2.6 million poorer families who qualify for the so-called Warm Home Discount would be helped – not the 17 million promised on the campaign trail.
Separately, Ofgem figures have shown that the main cost of supplying a typical domestic customer is actually 4 per cent lower than it was in January 2015.
Gillian Guy, chief executive of Citizens Advice, said: “Customers of all large energy firms have now seen their bills rise this year so it is clear that something needs to change.”
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