Energy price rise '˜a slap in face for families' across Yorkshire

British Gas yesterday became the latest of the Big Six energy suppliers to announce an increase in fees, blaming “significant cost pressure” for a 12.5 per cent rise in electricity bills.

The Government expressed “concern” about the decision, warning of the impact on consumers and urging the energy regulator Ofgem to press ahead with plans for market reform.

But critics have hit back at Ministers, pointing to a decision to row back on a Conservative manifesto pledge to introduce a price cap as a missed opportunity to crack down on “extortionate” prices.

“British Gas’ decision to introduce an eye-watering 12.5 percent price hike this September is a sign of their contempt for their consumer,” said Labour shadow Business Minister, Gill Furniss. “Already, each household in my constituency of Brightside and Hillsborough is overpaying for energy by £229 and today’s news exacerbates the lack of consumer confidence in the energy markets which appear to run like a cartel.

“It is absolutely disgraceful that at a time when my constituents are finding it hard to make ends meet, British Gas is choosing to bring about these astronomical price increases.

“The Tories have shelved their manifesto pledge to cap energy prices and as such are complicit in allowing residents up and down Yorkshire to suffer further price increases.”

Explaining the British Gas decision, parent company Centrica said “significant cost pressure” on the transmission and distribution of electricity, as well as costs associated with government policy, means it is currently selling “at a loss”. It said the changes would mean the average annual dual fuel bill for a typical household tariff will rise by £76 to £1,120 – a 7.3 per cent increase.

Responding to the announcement, a spokesman for the Department for Business, Energy and Industrial Strategy (BEIS) said the Government was “concerned” the price rise will hit many people already on poor-value contracts.

They added that Ofgem has already committed to “taking prompt action” as part of a consultation which will look into possible safeguard tariffs.

However, consumer rights groups were quick to criticise the Government response, pointing out that it falls well short of the cap that customers were expecting in the wake of the election.

Will Hodson, co-founder of consumer collective The Big Deal, said the British Gas increase the “ultimate slap in the face for families” and “unjustifiable”.

While Alex Neill, of consumer group Which? said: “Hard-pressed consumers waiting to see how the Government will tackle costly standard variable tariffs will be disappointed to see prices rising.”