Michael Settle
UK Political Editor
FEARS are growing other energy companies will increase their winter prices
after SSE announced rises of between 7% and 9.7% for more than seven
million households across Britain.
The move, which will add £106 a year to some bills, was immediately
criticised by consumer groups.
Scottish Gas is expected to be the next of the Big Six – the others are
ScottishPower, EDF, E.ON and npower – to announce a price rise.
Consumer groups reacted angrily to the Perth-based energy firm’s increase,
which takes effect from next month and will push annual dual-fuel bills to
an average of £1380. SSE operates as Scottish Hydro north of the Border.
The groups warned more increases in people’s gas and electricity bills on
top of last year’s would be a “crippling blow” for hard-pressed households.
The rises will range from 7% in parts of Scotland to 9.7% in south-east
England.
Martin Lewis, of the website Moneysavingexpert, said the rise would mean a
choice “between heating and eating” for many people this winter.
He added: “The most important thing to understand is that the Big Six
energy companies are like sheep – where one goes, the rest will almost
certainly follow in the next three months.”
David Stewart, for the Scottish Federation of Housing Associations, said:
“We are dismayed and disappointed at this increase, which will push more
Scottish households into fuel poverty.”
Margaret Lynch, for Citizens Advice Scotland, insisted the SSE rise would
be “a real blow” to households, many of which were already struggling with
the rising cost of living. Fuel bills were already very high, so an
increase like this is going to hit people hard, especially those on low
incomes,” she said.
SSE apologised for its move, but said it was forced to introduce it because
of rising wholesale costs and UK Government green levies. This was denied
by ministers, who urged consumers to shop around for their energy supply.
Scottish Gas, asked about the prospect of increasing prices, said: “We
would not comment on energy price speculation.”
SSE’s increase, and the expectation others will follow suit, fuelled the
political row over the rising cost of living.
Labour leader Ed Miliband accused the Big Six of “ripping off consumers”.
He said the SSE rise proved the need for his proposal to introduce a
20-month price freeze should Labour win the next election.
Mr Miliband also accused Prime Minister David Cameron of doing nothing to
stand up for consumers against the big energy firms.
Mr Miliband said: “The Government is letting the energy companies get away
with it and letting down the British people. This latest scandal shows why
the Government needs to act.”
Mr Cameron raised the prospect of reducing Government green levies and
branded Mr Miliband’s energy freeze promise “a con because he is not in
control of the worldwide price for gas”.
The Prime Minister added: “He can’t guarantee keeping that promise as gas
prices could go shooting up and in that case he would have to break his
promise, or the price could go shooting down and then a freeze would not be
as good as what customers would get.”
Margaret Burgess, the Scottish Government’s Housing and Welfare Minister,
described the SSE increase as “extremely disappointing” and called on
industry regulator Ofgem, the UK Government and energy suppliers to deliver
a “simpler, fairer, clearer and more competitive” energy market.
“It is a scandal there should be any fuel poverty in a country as
energy-rich as Scotland and in an independent Scotland all of those huge
energy resources will be in Scotland’s own hands.”
The SSE rise will result in an average increase of 8.2%, three times
inflation. It will affect 4.4 million household electricity customers and
2.9 million gas users.
Will Morris, for SSE, apologised to customers but said its hand had been
forced by rising wholesale prices and Government-imposed green levies to
enable things like home insulation.
He stressed policymakers “can’t expect to have power stations replaced with
new technologies, the network to be upgraded and nationwide energy
efficiency schemes all to be funded for free”.
But Energy Secretary Ed Davey denied green levies were a major factor in
driving up prices and and said the move was “clearly unwelcome” for SSE
customers.
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