Jim Armitage: British Gas bill hike makes Ed Miliband's price cap proposal look very appealing


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The Independent Online

Centrica’s announcement of swingeing British Gas price rises was somewhat like a mugger apologetically offering his victim an icepack after punching him in the face.

“While we’re stinging you for a 9.2 per cent price rise - 11.2 per cent if you’re north of the border – here’s a discount for old folks and the needy. And here’s a bit of advice on how to use less energy.”

Then there was the 'we feel your pain' section, followed by the 'it’s-not-easy-being-us-either' bit (“it has been a difficult decision”).

British householders will find it hard to sympathise. Nor will they feel much for the argument from Ed Davey, the Energy Secretary, that people have a choice thanks to the “competition we’ve introduced to the energy market.”  That would be the competition that means punters can choose between the company charging a 9.2 per cent increase or the one levying an 8.2 per cent one. The differences are tiny and consumers suspect they’ll probably be reversed in a few months’ time. The fact is, competition is singularly failing to provide meaningful choice for a service we have no option about needing.

With prices rising in such extreme increments, it’s little wonder that extreme policy proposals are emerging from the Labour opposition. Faced by yet another big squeeze on bills, who can blame voters for nodding their heads when Ed Miliband talks of bringing in old-school socialist price caps?

The coalition government is instinctively opposed to such interventionism. But it knows it’s popular with voters. Given this, and the energy giants’ refusal to help customers by taking a hit on their own profit margins, the Government is left with little option but to take the knife to its green promises which British Gas says make up 4 per cent of today’s price rise.

Expect that burden to be dramatically scaled back in George Osborne’s December’s mini-Budget.