Firms rein in price hikes after green deal

FOUR of the big six energy suppliers pledged to reduce their price hikes yesterday, after the government said it would shift green levies away from energy bills and into general taxation. The move is expected to cut the average customer bill by £50 per year.

Energy supplier E.On – the only one of the big six that is yet to announce a price rise – is now understood to be close to unveiling an increase similar to peer EDF at 3.9 per cent.

British Gas owner Centrica and fellow FTSE 100 component SSE yesterday confirmed they would pass the full savings on to consumers, as did Scottish Power and RWE Npower.

The four firms had unveiled price rises ranging between 8.2 and 10.2 per cent in the past two months, but yesterday’s changes will bring those figures down by somewhere in the region of four per cent.

EDF put pressure on the government to change its policy in November when it said it would raise prices by less than its competitors in anticipation of green levies being cut. Yesterday, the French firm said the government’s policy change “validated” its decision to rein in its price increase.

But the news was not universally welcomed, with Labour leader Ed Miliband accusing David Cameron of making a “cosy deal” with energy companies that will see bills continue to rise in coming months.

Minister for business and energy Michael Fallon told a Spectator event that government should not try to control the market by fixing prices. He added that subsidies for onshore and solar farms should be ended “as quickly as possible”.