EU 'adds £1bn to British fuel bills'

Centrica chief blames European market for price hikes this winter

Sir Roy Gardner, chief executive of British Gas group Centrica, has accused the European energy market of adding millions of pounds to UK fuel bills this winter.

Speaking after a proposed merger was announced between French energy groups Gaz de France and Suez, Sir Roy told The Independent on Sunday that if the European Union was going to compete with such burgeoning economies as China, "the politically motivated creation of national champions, with little economic rationale, is not the way forward".

He added: "UK consumers and businesses understand this issue only too well because they are currently paying the price for monopolistic practices across the Continent." Research showed that £1bn had been added to consumer bills this winter because the closely controlled European energy market was driving up the cost of gas in the UK.

Sir Roy has talked to the EU about his concerns, and said political and business leaders should "stop looking within their borders for national champions. Instead, they should start to champion Europe's competitiveness by opening their energy markets to full and fair competition."

British Gas announced last month that it would be raising prices by 22 per cent due to the soaring cost of wholesale gas.

However, it came in for criticism for the move from consumer body Energywatch. A spokesman said the increases made British Gas "the most expensive in the country. We just encourage consumers to switch away and early indications suggest that they are in their droves." He added that British Gas could see its market share fall below 50 per cent for the first time in its history.

French utility group Suez is hoping to see off a hostile approach by Italian rival Enel by merging with Gaz de France in a €70bn (£47bn) deal. The solution is backed by French Prime Minister Dominique de Villepin, but has angered both the Italian authorities and other EU member states.