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UK energy utilities agree to limit price rises

02 December 2013

Britain's Big Six energy companies agreed on December 2 to limit increases to the bills they send to households in response to a pledge by the government to remove some taxes and social charges. The companies said they would pass on the savings and try to keep prices low until the next election.

This gives some relief to Prime Minister David Cameron’s government on an issue that has angered voters and given the opposition a popular line of attack before the 2015 election.
Soaring energy costs have become a political issue in Britain since Labour leader Ed Miliband said in September he would freeze consumer bills for 20 months if he wins power.

Energy Secretary Ed Davey said the changes to electricity and gas bills, which will form part of the government's twice-yearly budget update to parliament on December 5, would save the average household£50  50 pounds a year.

The energy companies blame the price rises on wholesale prices, the cost of the supply network, and the government's environmental and social programmes. Environmental taxes and social charges contribute nearly 10% to domestic energy bills.

The commitment came from RWE Npower, British Gas/Centrica, SSE, Scottish Power and E.ON.
EDF Energy, which had previously announced a smaller increase in charges than the other utilities, said it had already anticipated the government changes and would therefore not need to lower bills.

They all said they would seek to freeze bills until after the next election, unless wholesale energy costs or network charges increase. The six utilities supply 98% of the country's homes.

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