London - Four of Britain’s “Big Six” energy companies promised yesterday to cut consumer gas and electricity prices, and keep them low until after the next election, after the government pledged to remove some taxes from consumer bills.
The soaring cost of household energy has become a big political issue in Britain since opposition leader Ed Miliband said in September that he would freeze consumer bills for 20 months if his Labour party won the 2015 general election.
In an attempt to regain the initiative, Prime Minister David Cameron said on Sunday that he planned to cut bills by an average of £50 (R831) a year by moving some social charges from household bills to general taxation.
Npower, the British arm of German utility RWE, said it would cut bills in line with the £50 reduction and seek to freeze bills until after the election in 2015, unless wholesale energy costs or network charges increased. Npower had in October announced an average price increase of 10.4 percent – almost four times the rate of inflation – which kicked in on Sunday.
British Gas, owned by Centrica, said it would reduce the cost of the average dual fuel bill by £53 from January 1, while SSE said it would take £50 off its bills before the end of the current financial year.
“We welcome [yesterday’s] announcement as an important step in cutting energy costs for our domestic customers,” RWE npower chief executive Paul Massara said, in response to the government’s proposal.
“As a result of this announcement we will reduce our bills. In addition, in order to give our customers greater certainty with their household budgets we don’t plan to increase energy prices before Spring 2015.”
The issue of high costs for energy and other services has become a focal point in Britain since Labour shifted its attack on Cameron’s government from the long flat-lining economy, which has returned to growth this year, to what it calls a cost of living crisis.
With many families squeezed by weak wage growth, rising bills and government spending cuts, the energy companies have come in for particular criticism.
Centrica, SSE, RWE’s npower, Iberdrola’s Scottish Power, EDF Energy and E.ON supply 98 percent of the country’s homes.
EDF Energy, which had previously announced a price rise of 3.9 percent, said it had already anticipated the government changes and would therefore not be lowering its bills.
A spokesman for E.ON said the company had pledged to pass on any savings from changes in government policy. “We are currently working through the details,” he said.
Scottish Power was not available to comment. - Reuters