British Gas to push thousands into fuel poverty with huge price hike

Nine million customers will see their gas bills rise by an average of 18 per cent next month, after British Gas announced massive increases in its energy prices.

Some customers face a 24 per cent rise in their gas costs, depending on where they live and how they are charged. An additional 16 per cent average rise in electricity bills will add £190 to the typical yearly dual fuel bill.

After Scottish Power announced similar rises last month, British Gas warned customers there may be little point in attempting to change supplier as the move looks set to be repeated throughout the industry, due to wholesale prices having risen by almost a third since the winter.

"Rising wholesale costs is an issue facing all energy suppliers," said British Gas managing director Phil Bentley. "Our advice to customers is to wait and see what happens in the energy retail market before making any decisions about switching supplier."

This latest rise, which comes on top of a 7 per cent increase in December, was announced only two days after a study by uSwitch.com showed that 6.3 million households in the UK are classed as being in fuel poverty, for spending at least 10 per cent of their income on energy bills.

Consumer Focus condemned the rise, saying that consumer bills were now at a historical high despite wholesale prices still being a third lower than the peak they hit in 2008.

"This price rise will send a shockwave across the country," said the organisation's chief executive, Mike O'Connor. "The impact on customers will be severe, piling more pressure on severely stretched household budgets and pushing hundreds of thousands more households into fuel poverty. Consumers simply don't trust that energy companies have customers' interests at heart and rightly question whether prices are fair."

He added that the industry regulator, Ofgem, had "declared that energy firms are guilty of greedy and lazy behaviour, bamboozling customers and exploiting structural weaknesses in the market," and that customers should be treated more fairly. But British Gas defended the rise, and said it could not continue to make a loss on the energy it sold because it needed to invest in future energy sources.

The Energy and Climate Change Secretary, Chris Huhne, said Britain's reliance on gas and old-fashioned forms of electricity generation, which are particularly sensitive to market fluctuations, was partly to blame.

"The UK electricity market has to change, so that we escape the cycle of fossil fuel addiction," he said.

"Alternatives like renewables and nuclear power must be allowed to become the dominant component of our energy mix."

Meanwhile, another energy firm, Scottish and Southern Energy, announced the immediate suspension of its door-to-door sales, resulting in the loss of 900 jobs.

The company said it had taken the decision because public confidence had been lost in doorstep salespeople, two months after it was found guilty of using them in misleading selling practices in a case brought against it by Surrey County Council. It is currently appealing against the verdict.

Gas price rises

19% Scottish Power, effective from August 2011 (electricity prices will also rise by 10% at the same time)

18% British Gas, August 2011(electricity 16%)

9.4% Scottish & Southern, December 2010

6.5% EDF, March 2011(electricity 7.5%)

5.1% NPower, January 2011 (electricity 5.1%)

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
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 General

Tradewind Recruitment: SEN Teacher

Negotiable: Tradewind Recruitment: SEN Teacher We have a fantastic special n...

Tradewind Recruitment: History Teacher

Negotiable: Tradewind Recruitment: My client is an 11-18 all ability co-educat...

Tradewind Recruitment: Year 6 Teacher

£100 - £150 per day: Tradewind Recruitment: Year 6 Teacher Birmingham Jan 2015...

Recruitment Genius: Transport Administrator / Planner

£20000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
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