David Cameron today urged British Gas customers to ditch the energy giant after they announced eye-watering near double-digit price rises of 9.2 per cent.

The supplier – who have 7.8million customers – will ramp up prices from next month costing households an average of an extra £123 a year.

Some customers will be hit with much larger rises, with homeowners in Scotland facing an increase of 11.2 per cent.

The company face a backlash from customers after Ian Peters, head of residential energy, said the company ‘understand the frustration’ – but said the best way to keep bills down is to ‘use less’.

 
David Cameron today urged homeowners to ditch British Gas
Switch suppliers: Energy Secretary Ed Davey today urged British Gas customers to ditch the company for cheaper energy suppliers following their latest round of price rises
 

Switch suppliers: Prime Minister David Cameron and Energy Secretary Ed Davey today both branded the price rises disappointing and urged consumers to ditch British Gas

As they announced the price rises, he said: ‘The amount you pay depends not on the price, but on how much gas and electricity you use.’

The huge increase in prices comes just days after Scottish Southern Electric announced they will raise tariffs by 8.2 per cent from November 15.

David Cameron today said the increase was ‘disappointing’ – but urged homeowners to switch suppliers.

‘I think it is a very disappointing announcement by British Gas,’ he told BBC Radio Sussex. ‘I think there are things we can do.

‘We are intervening because we are legislating to say these companies have to put their customers on to the lowest tariff. I think a lot of customers find it utterly baffling how many tariffs they have.

‘But there is something everyone can do, which is look to switch their electricity or gas bill from one supplier to another.

‘On average, this can help people save sometimes as much as £200 on their bill.

 
Price surge: British Gas said today that tariffs will rise by 10.4 per cent for electricity and 8.4 per cent for gas from next month

Price surge: British Gas said today that tariffs will rise by 10.4 per cent for electricity and 8.4 per cent for gas from next month

 
 

 

‘So I would encourage customers who are not happy with the service they’re getting, are not happy with the prices, to go to the switching sites online and see whether they can get a better deal.’

Pressed on whether the Government could do more to tackle the underlying issues, Mr Cameron said: ‘What we can do, which is what we are doing, is to try to get new suppliers into the market.’

‘We are pushing competition and I would urge customers of British Gas who are unhappy to change their supplier.’

Energy Secretary Ed Davey added: ‘It’s extremely disappointing news for British Gas customers. British Gas will need to justify their decision openly and transparently to bill payers.

‘British Gas was the only company not to meet its targets under the previous obligation to make its customers’ homes more energy efficient. That left more homes cold and their customers paying over the odds.’

Several of the four remaining members of the Big Six who have not yet raised prices are likely to follow suit in the coming weeks.

British Gas – who are owned by Centrica – said today that electricity prices will rise by 10.4 per cent while gas tariffs will be ramped up by 8.4 per cent.

The increases will take average dual-fuel bills to £1,444 after the hike comes into effect on November 23.

Regional variations mean some Scottish customers will see prices rise on average by as much as 11.2 per cent, while those in London will suffer a 10.6 per cent increase and households in Yorkshire will have a 10.5 per cent lift.

 
Price rises: British Gas bills will hit an average of £1,465, according to research by uSwitch. The rise comes days after SSE (bottom) also announced large price increases coming into effect this month

Price rises: British Gas bills will hit an average of £1,465, according to research by uSwitch. The rise comes days after SSE (bottom) also announced large price increases coming into effect this month

BRITISH GAS PRICES TO RISE BY AS MUCH AS 11.2 PER CENT

British Gas today announced near double-digit price rises of 9.2 per cent.

But in some regions households will see their bills go up by by more than 10 per cent.

Customers in Scotland will see price rises of 11.2 per cent, they will go up by 10.6 per cent in London and will increase by 10.5 per cent in Yorkshire.

 

British Gas price rises will add up to 11.2 per cent to bills in some areas

The move comes despite a pledge by British Gas earlier this year to use an annual earnings windfall from the cold weather to keep a lid on tariffs.

They hiked tariffs by 6 per cent last November ahead of a bitterly cold period when gas consumption rose 18 per cent in the first four months of this year compared to 2012.

The company said in May that because of the economic pressures facing many customers, the board had decided that any benefit from the exceptionally cold weather would be used to maintain ‘price competitiveness’.

Today it blamed the hike on the increasing cost of wholesale energy prices, Government energy initiatives and higher network charges for delivering power to customers’ homes.

The group is also introducing a new fixed standard charge of 26p a day for all customers – which will impact another 6.1 million – and a single variable unit rate, depending on usage and tariff.

Labour today repeated their pledge to ‘take action’ against energy companies and freeze prices if they win the next election.

However shadow energy secretary Caroline Flint did not say what form the intervention would take, leaving the party open to claims by the Government that it was raising the prospect of full price regulation.

Speaking during Energy Questions in the Commons, Ms Flint said: ‘If elected, Labour’s price freeze will happen. And if companies collude to increase prices beforehand we will take action.’

 
Fury: British Gas said they 'understand the frustration' of customers - and urged them to insulate their homes to save money

Fury: British Gas said they ‘understand the frustration’ of customers – and urged them to insulate their homes to save money

 

 

Turning to her counterpart in the coalition, Energy Secretary Ed Davey, she said: ‘But you’re the one in Government, so if companies do try to hike up their prices beyond anything that can be justified before 2015, will you stop them? Yes or no?’

Mr Davey replied: ‘We will help customers get the best deals, you know that. You know that on the market at the moment, customers can get much better deals than those offered by the big six. You know that the small suppliers have increased. You know that in 2011 there were no independent suppliers with more than 50,000 customers.

‘Thanks to our policies there are now three with more than 100,000 and a further seven companies have entered the market in the last two years. That is the choice that is the solution and people can cut their bills significantly by changing supplier.’

Ms Flint rubbished the notion that energy bills were lower under the coalition.

She said: ‘Every single time this Government puts energy companies before consumers. According to figures in the House of Commons library, energy prices are rising three times faster under this Government than under the last Labour government.’

ENERGY PRICES HAVE ALMOST DOUBLED SINCE THE MILLENNIUM

Since the turn of the century, householders have seen their energy bills almost double.

Research published last month showed the average cost for gas and electricity last year altogether was £1,339, which was 85 per cent more than the £710 paid in 2000.

The figures – adjusted to 2012 prices to take inflation into account – show that gas bills went up by 119 per cent and electricity bills by 47 per cent between 2000 and last year.

In the past two years alone, gas bills surged by 19 per cent and electricity by 11 per cent.

According to the study by the House of Commons Library, the worst offenders were British Gas and the former regional electricity monopolies.

All the prices in the Commons research were converted to 2012 prices so they could be compared without being skewed by inflation.

It shows that in 2000, the average domestic gas bill was £383, when adjusted to 2012 prices, more than doubling to £839 in 2012.

It was a similar story for electricity bills, which were £341 in 2000, soaring by a half to £500 in 2012.

British Gas queried the report, saying it was based on figures from the energy watchdog Ofgem that do not take into account its customers’ lower-than-average energy usage.

A spokesman added: ‘Our customers’ energy consumption is much lower than that of the  average energy customer due to the steps we’ve taken to make our customers’ homes more energy efficient and help them manage their energy usage.’

Defending Labour’s pledge to freeze energy prices, she added: ‘Our price freeze will save money for 27 million households and 2.4 businesses while we reset the market.

‘It’s your policy that’s a con. You say everyone will be put on the cheapest tariff, but I say to you isn’t it a fact that 90 per cent of people will see no benefit from your policy at all?’

Ann Robinson, Director of Consumer Policy at uSwitch.com, said that more families will have to cut back on their heating this winter.

‘“This is a crippling blow for consumers, who are still reeling from last winter’s price hike. It’s the final nail in the coffin for affordable energy

‘Of course the danger now is that the other Big Six suppliers will follow suit. This raises the spectre of yet more households forced to cut back on their heating.

‘Last winter almost seven in ten households went without heating at some point to keep their energy costs down, while over a third said that cutting back on energy usage was affecting their quality of life or health. This is the grim reality we face as the cost of energy spirals ever higher.’

Dave Prentis, General Secretary of Unison, said: ‘This latest round of price rises from energy companies, delivers a hammer blow to family finances at the worst possible time of year.

‘Winter is fast approaching and millions of customers are already struggling to pay their bills. With price rises across the economy outstripping wages many will face the dilemma of putting on the fire or putting food on the table. 

‘This is a crisis in the making and the Government needs to tackle fuel poverty head-on or we will see the number of deaths from cold rising over the winter.’

Ian Peters, managing director of British Gas Residential Energy, said they had agonised over the decision – before opting for an inflation-busting 9.2 per cent price rise.

‘I know these are difficult times for many customers and totally understand the frustration that so many household costs keep on rising when incomes aren’t keeping pace,’ he said.

‘We haven’t taken this decision lightly, but what’s pushing up energy prices at the moment are costs that are not all directly under our control, such as the global price of energy, charges that we have to pay for using the national grid that delivers energy to the home, and the cost of the Government’s social and environmental programmes.

‘Energy efficiency is the best way to keep bills down.’

 
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