Boycott greedy energy firm, urges minister: But defiant SSE blames its £111-a-year tariff increase on Labour’s green taxes
A Tory energy minister last night called for a boycott of Britain’s second biggest energy firm after it put up bills by an average of £111 a year.
As a winter chill swept across the country, SSE said tariffs will rise by an inflation-busting 8.2 per cent for its 7.3million customers. The increase will take their annual bill close to £1,500, leaving millions facing a nightmare choice between heating and eating.
Energy and business minister Michael Fallon condemned the increase and advised SSE customers to switch to a cheaper rival.
The firm hit back, blaming government green taxes and associated measures for pushing up bills. It said ministers should shift the cost of subsidising green energy, such as building wind farms, away from bills to general taxation.
Labour leader Ed Miliband seized on the news to justify his promise to impose a 20-month freeze on energy prices if he is elected in 2015. However, Mr Miliband is vulnerable on the issue after he championed green taxes when he was Energy Secretary in the last Labour government.
The SSE price rise comes into effect on November 15. Other major suppliers, such as British Gas, E.on, Npower and Scottish Power, are expected to announce large increases within days.
Mr Fallon said: ‘I would encourage all customers to look again at their tariffs and see if they can switch to a cheaper tariff. It is important that consumers have the power and information to be able to switch accounts. We are encouraging that by simplifying the tariff structure.’
The wholesale price of energy, which makes up half the bill, is up by 4 per cent compared to a year ago. In theory, this should put bills up by only 2 per cent.
SSE said it was increasing prices by 8.2 per cent because green taxes, which make up 10 per cent of the bill, have jumped by 13 per cent in a year.
Secondly, the amount companies are charged to maintain and improve the national grid of cables and pipes, which equates to 25 per cent of the bill, is up 10 per cent in a year. Much of this work is associated with green energy.
The company said removing the green tax element from bills and transferring the cost to general taxation would reduce the annual figure by £110.
SSE group managing director Will Morris apologised to customers but accused politicians of pushing up costs.
‘We know we will come in for a great deal of criticism for this decision and politicians will no doubt be lining up to condemn us,’ he said.
‘But over many years policy-makers themselves have failed to highlight adequately the cost to consumers of the policies they have pursued in government.
‘They 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.’
Mr Miliband ran the Department for Energy & Climate Change in the last government and was behind the green taxes driving up bills. Now, he is trying to win over voters by promising a price freeze.
Yesterday, he said: ‘This latest scandal shows why the Government needs to act. The companies are trying to blame everyone else, the Government is trying to blame everyone else. They’re responsible, they’re not getting a grip.’
Yesterday, David Cameron dismissed the Labour leader’s price freeze promise as a ‘con’. ‘He is not in control of the worldwide price of gas and so he can’t guarantee keeping that promise,’ he said.
‘What we need to do is make changes to the energy market to make sure we can have low prices and hopefully keep those low prices for as long possible.
‘We’ve got to address the causes of prices rather than just come up with what is effectively a con.’
Consumer bodies slammed SSE’s price rise. Consumer Futures director Adam Scorer said: ‘SSE and others who follow need to demonstrate why this rise is justified.
‘But the Government also has to acknowledge that energy policy costs are adding to consumer bills and carbon taxes will make that burden heavier still.’
Executive director at Which?, Richard Lloyd, added: ‘We want the Government to intervene to make sure everything possible is done to keep prices in check. We need simpler pricing, we need to break the stranglehold of the biggest energy companies . . . and the Government must make sure that its own policies are not adding unnecessary costs to consumers’ bills.’
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