British Gas 5% price cut branded as ‘measly’ by Labour

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The Big Six energy providers have come under fire for failing to pass on the full savings they are making from plummeting wholesale gas and electricity prices.

Critics said the price cuts announced so far – by E.ON last week and by British Gas today – were “measly” and expressed anger that the other four major suppliers have yet to reduce bills at all.

British Gas announced yesterday that it will cut bills – but only by 5 per cent, and not until the end of next month, when the coldest weather is likely to be over. The price reduction will apply only to gas, with electricity rates staying the same.

The energy provider, which supplies 6.8 million UK households, insisted the price cut was the biggest it could manage and would save customers £37 a year each on average.

British Gas said that it was passing as much of the falling wholesale costs on to its consumers as it could but said that most of the gas currently being used in customers’ homes had been bought at higher prices a long time in advance.

But consumer groups said the discount was nowhere near big enough given that wholesale gas prices have tumbled by about 30 per cent in the past year. They also criticised the decision to postpone the reduction until 27 February.

Consumer campaigners said British Gas should be cutting electricity prices as well, since wholesale costs have fallen by about 15 per cent in the past 12 months.

The Labour leader, Ed Miliband, said: “A 5 per cent fall is too little and it is too late. It is not nearly good enough.”

Caroline Flint, Labour’s shadow Energy Secretary, said the cuts made by the Big Six so far had been “measly”.

The executive director of Which?, Richard Lloyd, said: “This is another modest price cut for consumers in response to a significant shift in wholesale prices,” adding that the ongoing competition investigation into the Big Six “must look at whether falling wholesale energy costs are passed on fairly, or whether a lack of competition leaves us all out of pocket”.

Ann Robinson, of the uSwitch price-comparison website, said British Gas and the other Big Six companies should be knocking at least a tenth of the price off both gas and electricity, saving customers more than £120 a year on average.

“Customers have a right to feel disappointed at these price cuts. They should have cut electricity as well. And I don’t buy the idea that it’s all down to buying the gas in advance,” she said.

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SSE attacked for delaying cuts in household gas price until spring

Consumer groups reacted angrily yesterday as energy firm SSE announced it was cutting gas bills by 4.1 per cent cut – but not for another 95 days.

It became the fifth of the “big six” suppliers to cut its gas prices, saying the reduction would save the average family £28 a year. But it was strongly criticised because the cut was not only smaller than that of most of its rivals, but will not be implemented until 30 April.

“The SSE price cut is probably the slowest in history,” said Mark Todd, director of price comparison website Energyhelpline. “It’s the pace of a sleepy snail and the delay means the cut will only kick in after winter and most of the spring has passed.”

E.on’s price reduction – while smaller than SSE’s at 3.5 per cent – took immediate effect when it was announced two weeks ago. The other big six suppliers have announced cuts of at least 4.8 per cent by the end of this month. EDF Energy is the only large provider which has yet to offer price cuts.

“It is disappointing that SSE has not reduced its prices further, or sooner,” said Ann Robinson, director of consumer policy at uSwitch.com. “Is EDF going to be the one [which] does the right thing and announces a price cut that properly reflects the fall in wholesale prices?”

The failure of the big six to pass on the full reduction in wholesale costs caused further damage to their reputations, which were already under strain, according to a survey last week by the consumer group Which?. It found that the major suppliers scored far worse for customer satisfaction and value for money than smaller providers – with Npower voted the least popular of all.

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British Gas recently put my direct debit up by £5 a month without having made any attempt to read the meter, I can't even remember when a meter reader last called?

After phoning in a reading of my own they sent me a new statement which instead reduced my payments by £5 a month compared to what I was paying previously.