Belfast Telegraph

Labour pledge to legislate to limit price hikes by energy firms

A Labour government will legislate to limit future price hikes by the energy companies after one of the so-called Big Six announced it was putting up charges by almost 10%, shadow chancellor John McDonnell has said.

Npower has come under fire from the Government and energy regulator after setting out plans to hike gas and electricity prices by 9.8% - a move that will add £109 to the annual dual fuel bills.

With other providers expected to follow with large increases, Mr McDonnell said a future Labour government would bring in statutory price controls.

"We would control them. We would legislate to control them. We can't allow this to keep going on," he told BBC1's Breakfast.

"You would introduce legislation in Parliament. You would limit the amount they can increase their prices by."

Npower said the rise - which comes in the face of rising wholesale costs - had been a "hugely difficult decision".

It was rebuked by regulator Ofgem, which said it did not see "any case" for significant price increases where suppliers have bought energy in advance.

Mr McDonnell said Labour would seek to encourage more local suppliers as had happened in Germany.

"They used to have a big six companies. What they've done is they've invested at a local level where local communities are providing their own energy, largely renewable energy, and those profits have gone back into those communities," he said.

"In Germany now the big companies no longer control the energy supply. We have got to invest in the lifetime of the parliament to enable that to happen."

Ed Molyneux, head of research for consumer group, said 1.74 million customers would be affected by npower's "outrageous" price rise at a total of £190 million.

"When wholesale prices fell people never saw cuts in their prices as big as this rise. Once again the Big Six are putting their profits before their customers," he said.

"The announcement shows that if you're not on a fixed deal you simply have no control over the price you pay for your energy.

"More Big Six price rises are on the cards. If you're on a Big Six standard tariff you need to switch as soon as possible."

Npower's price hike on typical dual fuel annual energy bills is made up of an average increase of 4.8% on gas and 15% on electricity.

The firm said another 1.4 million fixed rate and pre-payment customers will not be affected by the increase.

The Department for Business, Energy and Industrial Strategy said it was "concerned" about the planned price hike by npower.

"Suppliers are protected from recent fluctuations in the price of wholesale energy, which they buy up to two years in advance, and prices remain significantly lower than in 2014," a spokesman said.

"We expect energy companies to treat all their customers fairly and have been clear that, wherever markets are not working for consumers, we are prepared to act."

However, Lawrence Slade, chief executive of Energy UK representing suppliers, said increased switching by customers meant firms had to keep prices competitive.

"There are many components which make up an average energy bill - the majority of which are outside of suppliers' control and in some cases these are rising, putting pressure on bills," he said.

"The energy industry has only recently undergone an extensive two-year investigation by the Competition and Markets Authority. Their recommendations must be allowed to be introduced."