Scottish Power hikes bills as green tax debate rages

Suzie Neuwirth
SCOTTISH Power yesterday became the fourth of the big six suppliers to raise its energy prices, adding £113 – or 8.6 per cent – on to the average annual dual fuel bill.

Like many of its peers, Scottish Power maintains that high profit margins are not to blame for the bill increase, instead blaming wholesale prices and green taxes for the hike. The firm posted an operating loss of £23m in its combined retail and generation business for the first nine months of 2013.

According to government figures, green taxes add £112 on to the annual household bill, and have been repeatedly blamed by energy firms as the key driver of increased prices.

“The cost of purchasing and delivering energy to homes across Britain has risen significantly this year,” said Neil Clitheroe, Scottish Power’s chief executive of its energy retail and generation division. “With an increase in costs for delivering compulsory schemes to reduce carbon emissions and improving energy efficiency in homes, we unfortunately have no other option than to pass these on by increasing our prices for customers.”

The energy debate was fuelled further this week, after Conservative Prime Minister David Cameron pledged to “roll back” the green energy levies strongly supported by his Coalition partner, the Liberal Democrats. Yesterday the Liberal Democrat Deputy Prime Minister Nick Clegg suggested that the levies could be switched from bills to taxes, as a way of mending the rift between the Coalition.

Scottish Power agreed to pay back £8.5m to consumers earlier this week, after an investigation by the regulator Ofgem found its doorstep and telesales agents guilty of mis-selling.

Energy policy has been in the spotlight ever since Labour leader Ed Miliband pledged to freeze consumers’ bills last month. Former Conservative Prime Minister called for a one-off windfall tax on energy firms’ profits this week and said that recent price rises were unacceptable.