Top UK energy firms under fire for unexplainable price hikes

Britain’s biggest energy suppliers would be able to cut their bills “pound for pound” if the government removed green levies from energy bills and moved the tax into general taxation, MPs heard yesterday.

The energy firms said that they could cut bills by £40 - £60 instantly if the government got rid of the Energy Companies Obligation (ECO) charge, a scheme designed to help poorer households cut their energy usage.

However, at the parliamentary hearing, the big firms came under fire from Stephen Fitzpatrick, the chief executive of small supplier Ovo Energy, who railed against the larger firms saying that they were “the best filibusters in the business”, adding: “It looks to me like a lot of energy companies are charging the maximum price they feel they can get away with.”

British Gas, nPower, SSE and Scottish Power are the four companies which have raised their prices by as much as 10% in recent weeks. Fitzpatrick said he “cannot explain any of these price rises” and said that his company is buying gas for 7% less than it was two years ago.

Extra pressure was piled onto the energy companies to explain their steep increases by the industry regulator Ofgem, which said that network costs have risen by just £15 since last year, wholesale costs by £10 and green costs by £10.

But the big energy firms’ focus was squarely on reducing green levies, with E.On chief executive Tony Cocker describing the costs as a “regressive poll tax” and a “stealth tax”.

Representatives from SSE, npower and E.On all said that any savings made by a reduction in green levies would be passed directly to customers.

The firms’ comments follow remarks by David Cameron and Nick Clegg who have proposed to “roll back” green levies and instead move the cost to general taxation.


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