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Government step in to appease public over energy bills

Major energy firms have begun to act to appease customers embittered by recent price hikes, following the government’s introduction of a package of measures.

Npower plans a conditional price freeze until 2015, unless wholesale costs went up, and British Gas owner Centrica said it would cut bills by £53 in January.

SSE also said it would pass on savings to customers of around £50.

The government has been under pressure to slash green energy levies and step in to reduce UK fuel poverty, after inflation-busting price hikes by the six major energy companies in October.

Some subsidies for those in fuel poverty will now be moved into general taxation and some green policy targets will be slowed down.

This means energy bills could be cut by an estimated £50 a year for the average household.

British Gas said the average bill would rise by £70, rather than £123. Chris Weston, its managing director, said it was “pleased to be cutting energy bills” from 1 January because the government had committed to making changes to the environmental and social charges paid for through energy bills.

Richard Lloyd, executive director of consumer group Which?, said: “It is about time the government started getting the cost of energy under control and this will be a welcome step in the right direction for consumers who are struggling with the increased cost of living.

“It is right to refocus the Energy Company Obligation so that it gives greater priority to those most in need of help, with lower-cost measures such as loft and cavity wall insulation. But in return for more time to get this right, the suppliers must now commit to greater transparency and to getting their costs down, fast.”

Prices, though, are stil rising faster than inflation, and analysts point out that a 5% price rise instead of 9% does not represent a cut.

Labour leader Ed Miliband has pledged a 20-month price freeze if the party wins the next election and, in a speech on Monday, is to accuse ministers of using “smoke and mirrors” over its plan.

Meanwhile, the Environmental Audit Committee of MPs has accused the government of “shifting the goalposts” to reduce the number of households in England classed as in fuel poverty.

This was posted in Bdaily's Members' News section by Graham Vincent .