British Gas and Npower to raise prices fuelling fears of a 'long, cold winter' for more households

Both companies blamed rising costs largely outside their control

Fears that more households will be plunged into a “long, cold winter” were fuelled today after two major energy companies hiked their prices.

British Gas put an extra £80 on to its typical annual dual fuel bill after an average increase of 6% affecting 8.5 million customers from November 16.

Rival Npower followed with an average rise of 8.8% for gas and 9.1% for electricity.

Both companies blamed rising costs largely outside their control, but with food and some mortgage costs also on an upward path there were fears about how the elderly and hard-up will cope with the latest rises.

The pre-winter move from British Gas comes months after parent Centrica posted a 23% rise in half-year profits at its residential arm to £345 million.

Unions and consumer groups attacked British Gas and called on the Government to take urgent action to tackle rising fuel prices.

Unite general secretary Len McCluskey said: “With winter approaching, low-waged people will now be terrified about how they are going to find another £80.

”Money from the poor is going to the pockets of Centrica shareholders. This is further shameful abuse by out-of-control, greedy fuel companies, sitting on piles of profit.“

Consumer Focus recently said six million households in England were planning to cut back on their heating this winter because of cost worries.

It has encouraged customers ”to do what they can“ to cut their bills by switching tariff, payment method and supplier.

Its director of energy Audrey Gallacher said no-one has managed to convince consumers of the necessity for price rises in the context of wholesale prices and company profits.

She added: ”We need much more focus on the big steps that Government and the regulator can take to insulate consumers from the effects of growingenergy costs.“

Consumer Focus said today's price rise from British Gas will see the company's average annual energy bills reach almost £1,265 for direct debit customers and £1,347 for cash and cheque customers.

The rise from npower comes into force on November 26 and according to Consumer Focus will result in a typical dual fuel customer paying £1,252 by monthly direct debit. The figure for cash or cheque is £1,357.

The supplier has 6.5 million residential gas and electricity accounts.

SSE, which trades as Southern Electric, Swalec and Scottish Hydro, has already said it will increase tariffs by 9% on average on Monday, hitting about five million electricity customers and 3.4 million gas customers.

Mike Jeram, of Unison, said: ”It will be a long, cold winter for many pensioners, the unemployed and for low paid workers and their families.

“Just days ago we learned that the cost of fruit and vegetables have gone up by a massive 50% in the last year. Any increase in energy prices is likely to tip more families into debt and into the hands of unscrupulous pay-day loan companies.”

British Gas put gas and electricity tariffs up by 18% and 16% respectively in August 2011, blaming higher wholesale costs, but this was followed by a drop of 5% in electricity tariffs in January when prices eased.

British Gas managing director Phil Bentley said: “Britain's North Sea gas supplies are running out, and British Gas has to pay the going rate for gas in a competitive global marketplace.

”Furthermore, the investment needed to maintain and upgrade the national grid to deliver energy to our customers' homes, and the costs of the Government's policies for a clean, energy-efficient Britain, are all going up.“

Centrica said prices in the wholesale market for gas this winter are around 13% higher than those paid for the same period last year.

Assuming normal weather conditions and despite today's price rise, Centrica said British Gas Residential profits for the second half of 2012 are expected to be around 15% lower than for the same period of 2011.

Centrica estimates its residential margins after tax in 2012 will be 5p in the pound - a similar level to last year and lower than the prior year.

Mr Bentley said: ”Unfortunately, we cannot run our business sustainably on lower margins and still make the investments in jobs and future energy sources that Britain needs, especially if the country is to grow its way out of recession.“

Attention will now switch to the other big suppliers - EDF and Scottish Power - while E.ON has guaranteed a price freeze for 2012.

Further utility bill increases will play havoc with the Bank of England's inflation forecasts, which predicted a gradual slide in the consumer price index rate towards the end of the year and into 2013.

While inflation has fallen from 5.2% in September last year to 2.5% in August this year, many economists expect the rate to rise again as droughts in the United States and poor summer weather in the UK have meant higher food prices.

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness