David Prosser: Are our energy bills really the cheapest in Europe?

Outlook British Gas's simplification of its tariffs is an admission that it has in the past been opaque about how it charges for gas and electricity. Still, the company continues to reject criticism of the level of its charges – British energy bills are the cheapest in Europe, it said again yesterday.

It's a claim we hear regularly from the whole of the energy industry, but is it true? Well, yes and no. Independent figures show that Britons do indeed pay less for gas than anyone else in Western Europe, though for electricity, we are only fourth cheapest in a ranking of 15 nations.

Even that, you might say, is vindication for the energy sector. Actually not. For a breakdown of bills across those 15 countries reveals that we pay lessmostly because – believe it or not – taxes on gas and electricity are very low here compared to almost everywhere else. Taxes account for just 9 per cent of a British gas bill – compared to 35 per cent in Sweden and 23 per cent, on average, across Europe.

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