British Gas And Npower Confirm Big Bill Rises

Npower has become the third of the so-called 'big six' energy firms to confirm big rises in its gas and electricity bills ahead of winter.

Bills will increase by an average 8.8% for gas and 9.1% for electricity from November 26th, the company said, just hours after British Gas confirmed its average dual fuel tariff would rise by 6% - or £80 annually - from November 16.

Npower's 6.5 million residential customers will have to endure their steeper increases 10 days later.

Both companies blamed rising costs largely outside their control.

Rival SSE is due to increase its tariffs by 9% on average from Monday.

Of the other 'big six' firms only E.ON has pledged not to raise prices for the remainder of 2012.

EDF Energy and Scottish Power have not made any promise that they will not increase prices by the end of the year.

The companies have long been accused of being quick to raise prices but slow to bring them down again as they protect profits at a time of rising investment costs.

There was outrage in July after British Gas announced a 23% surge in profits. The company admitted that price rises the previous year helped it rack up operating profit of £345m in the first half of 2012.

It has claimed that the impact of steep rises in bills over the past three years has resulted in consumer costs rising in line with inflation only for those who have taken advantage of a range of energy efficiency measures.

The company said it had helped such customers' gas costs fall by as much as 40%. It has announced further measures, including free loft and wall cavity insulation.

It also launched a new tariff that fixes prices for a year at its new levels but guarantees that should standard prices fall, customers' prices will fall by the same amount.

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British Gas managing director Phil Bentley said: "Unfortunately, we cannot run our business sustainably on lower margins and still make the investments in jobs and future energy sources that Britain needs, especially if the country is to grow its way out of recession."

But its arguments were largely dismissed by consumer groups.

Ann Robinson, director of consumer policy at uSwitch, said the increase would leave many households facing a winter where they are "scared to turn on heating for fear of the cost."

Unite general secretary Len McCluskey said: "With winter approaching, low-waged people will now be terrified."

Energy and Climate Change Minister Greg Barker told Sky News that this winter's Energy Bill will be the biggest shake-up of the industry since privatisation and give extra teeth for regulator Ofgem to improve energy markets.

He added: "We are also rolling out the Green Deal this winter. This is the biggest ever energy efficiency programme, that will help millions improve their homes so they are better insulated. We have also brought in the Warm Home Discount, which will provide an extra £130 for two million of the most vulnerable households this winter."

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