SSE attacked for delaying cuts in household gas price until spring

Consumer groups have also poured scorn on the other five leading energy firms’ price cuts

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The Independent Online

Consumer groups reacted angrily yesterday as energy firm SSE announced it was cutting gas bills by 4.1 per cent cut – but not for another 95 days.

It became the fifth of the “big six” suppliers to cut its gas prices, saying the reduction would save the average family £28 a year. But it was strongly criticised because the cut was not only smaller than that of most of its rivals, but will not be implemented until 30 April.

“The SSE price cut is probably the slowest in history,” said Mark Todd, director of price comparison website Energyhelpline. “It’s the pace of a sleepy snail and the delay means the cut will only kick in after winter and most of the spring has passed.”

E.on’s price reduction – while smaller than SSE’s at 3.5 per cent – took immediate effect when it was announced two weeks ago. The other big six suppliers have announced cuts of at least 4.8 per cent by the end of this month. EDF Energy is the only large provider which has yet to offer price cuts.

“It is disappointing that SSE has not reduced its prices further, or sooner,” said Ann Robinson, director of consumer policy at uSwitch.com. “Is EDF going to be the one [which] does the right thing and announces a price cut that properly reflects the fall in wholesale prices?”

SSE blamed the delay on its own voluntary price freeze – introduced a year ago – which it extended by six months yesterday, until at least July 2016. The company said that this meant it had contracted to buy more of its gas reserves further in advance than usual, to ensure that it could afford to keep prices frozen, even if wholesale costs rose.

“We are the only supplier to freeze prices and we promised we would cut them if we could; now we are delivering on that promise,” said Steve Forbes, director of SSE’s domestic division.

Although SSE has come in for the harshest criticism, consumer groups have also poured scorn on the other five leading energy firms’ price cuts, because they pass on only a small fraction of the recent fall in wholesale gas prices, which are down by more than a fifth since the summer. Furthermore, electricity prices have not been reduced at all.

The major suppliers have defended the relatively small price cuts by arguing that they buy their gas a long time in advance, so they have derived little benefit so far from the fall in wholesale prices.

However, experts said the Labour Party was the real culprit, because Ed Miliband’s pledge to freeze prices for two years if elected was scaring energy firms from making big cuts that they would not be able to rescind if the wholesale market rebounded.

The big six suppliers have denied that the relatively small scale of their price reductions is influenced by Labour policy – with the exception of Npower.

When it unveiled its 5.1 per cent price cut on Friday, a spokesman said: “Political factors have become increasingly significant when calculating changes to prices. Any changes we make to prices today we possibly have to live with for the next two years. This represents a significant risk to our business.”

The failure of the big six to pass on the full reduction in wholesale costs caused further damage to their reputations, which were already under strain, according to a survey last week by the consumer group Which?. It found that the major suppliers scored far worse for customer satisfaction and value for money than smaller providers – with Npower voted the least popular of all.

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