Energy giants set to cut costs following Government announcement

2nd December 2013

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The UK’s energy giants are rolling out plans to cut electricity and gas bills for customers following the implementation of new tax cuts from the government.

The reductions come on the back of Government announcements to cut the costs associated with green levies, and as a result the UK energy firms have pledged to pass on the benefit to customers, by around £50 per year.

However in general, costs are increasing this winter for most energy customers, for example 2.2m Scottish Power customers will see their bills rise by 8.6% from Friday.

Jeremy Cryer, energy spokesperson at Gocompare.com, says “While any reduction in people’s energy bills is a good thing, today’s announcement is merely a tiny step in the right direction and there is still much more that needs to be done. Shaving £50 a year, or 96p a week, off people’s bills when prices have already increased by £105.50, still amounts to bills that are £55 a year more expensive, on average, than they were pre-winter 2013.”

Clare Francis, editor-in-chief at price comparison site, MoneySuperMarket.com is urging the UK’s energy giants to make sure the cuts apply to all customers, regardless of the tariff type or how they pay for their energy.

She says: “The price cuts also need to be passed on as soon as possible and it is worrying that some energy companies have already suggested there will be a delay in this cut being applied. Providers shouldn’t be taking advantage of the fact that we are now entering the coldest time of year when energy usage is at its highest.

“This move to reduce the cost of energy is by no means a cue for bill-payers to sit back and do nothing. Annual energy costs should fall by around £50 but this won’t be enough to offset the recent price hikes average £111 so it is still really important that people make sure they are on the cheapest tariff available as there are still savings to be made.”

According to Reuters, Npower,  said it would cut bills in line with the £50 reduction. However, Npower in October unveiled an average price increase of more than 10%, almost four times the rate of inflation. In addition, British Gas, said it would reduce the cost of the average dual fuel bill by £53 from the start of 2014 while SSE said it would make reduction before the end of the current financial year. Scottish Power and E.ON said they would also pass on the savings while EDF Energy, said it had expected the government changes and would therefore not need to lower bills.

Friends of the Earth Energy Campaigner Sophie Neuburg adds:
 
”This is a cynical attempt by the big energy firms to fool the public into thinking that recent price hikes were caused by social and environmental programmes, rather than rocketing gas prices and their own soaring profits. Energy efficiency is not in the Big Six’s business interests, as it reduces the amount of fuel their customers have to buy from them.”

1 thought on “Energy giants set to cut costs following Government announcement”

  1. Anonymous says:

    it’s too little too late. Even with these price reductions the last round of increases were all well above the rate of inflation. I switched long ago with http://www.yoursuresave.com , left the Big Six and moved to a non-profit energy supplier.

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