Energy firms told to slash bills

June 4, 2015

Lucy_2 (Custom)

 

 

 

By Lucy Palmer-Richeson

 

The UK’s top energy firms are under pressure from the new government to cut their bills.

Energy Secretary Amber Rudd has contacted the “Big Six” — British Gas, npower, EDF, E.on, Scottish Power and SSE – asking them whether or not their prices are reflecting firms’ costs and urging them to ease the pressure on UK households.

Despite the feedback from analysts that there is room to cut bills by more than £100 a year, the top six energy firms insist that they are in a competitive market and are unable to drop prices. Before the recent election, when Labour threatened to impose a freeze on energy bills, companies were wary about dropping prices in case they were forced to remain at the new lower level, but, Rudd insists, this is no longer the case and the top companies should do the right thing and drop their prices.

Rudd said, “My focus is to get the best deal for consumers and the Department is working hard to keep energy bills as low as possible.

“That is why I have written to energy companies asking them what their plans are to lower bills for hardworking British bill payers.”

According to industry regulator Ofgem, energy companies’ average profits have increased by 32% over a year to an average of £120 per household.

Gillian Guy from the charity Citizens Advice told the Daily Mail: “Energy suppliers can no longer make excuses about prices being high due to the prospect of a price freeze.

“Firms need to make sure consumers get the benefit of a drop in wholesale prices by passing on savings to customers.

“We’ve been calling on energy companies to pass on the savings from the drop in wholesale prices so it is good to see the Government putting extra pressure on suppliers.”

Last month, SSE, the UK’s second biggest energy supplier, reported a 39% increase in profits, despite losing more than 500,000 customers in the last year.

Rudd said that she would continue to insist that the top six drop their prices, telling the BBC this week: “In light of the greater regulatory stability we are providing and continued stability in wholesale gas prices, I believe that energy suppliers should be seeking to regain the trust of consumers by reflecting this in their pricing decisions.”