Friday, March 28, 2014

Energy giant SSE promises to freeze gas and electricity bills

  • SSE to axe 500 jobs and slash spending on wind farms to fund freeze
  • Comes after it warned that Miliband's proposed freeze was 'dangerous'
  • Move now heaps pressure on other major players to follow suit

By Martin Robinson and Matt Chorley and Sean Poulter

Britain's second-biggest energy firm has announced it will axe hundreds of jobs and slash spending on wind farms to fund a freeze on gas and electricity bills.

However, there are already many cheaper deals available which last for even longer - including one from SSE itself.

The decision by SSE means the average standard tariff dual-fuel bill for those paying by cheque or cash will be held at £1,266 until January 2016.

It represents a remarkable U-turn for the company, which had argued that a Promotional Code freeze would be dangerous when the idea was put forward by Labour leader Ed Miliband last autumn.

The move also heaps pressure on the other major players to follow suit. British Gas, EDF, Eon, Npower and Scottish Power have also argued against price freezes.

The news triggered a heated row at Prime Minister's Questions as David Cameron and the Labour leader squabbled over who should take credit.

For months, the Prime Minister ridiculed Labour's pledge to freeze energy prices if it wins the next election as a 'price con' that was impossible to deliver because of fluctuating global prices.

But Mr Miliband insisted the decision by SSE meant Mr Cameron's argument had been 'totally demolished'.


SSE said the freeze is possible as it plans to cut costs by £100million, axe 500 jobs and cancel spending on new wind farms.

Six months ago, SSE chief executive Alistair Phillips-Davies dismissed Labour's price freeze plan as 'unsustainable'.

Yesterday he said: 'We're responding to questions that have been asked of us with a positive agenda for customers, including the longest ever unconditional energy price freeze.'

However, the firm's new deal is still more expensive than others available.

And even SSE itself has a tariff that holds prices until March 2017 and comes in at an annual average of £1,186, a saving of around £80 a year, although it has to be paid monthly by direct debit.

Clare Francis, of price comparison website MoneySuperMarket, said: 'Those paying the provider's standard prices could still save money by switching to a cheaper tariff.

'There are seven tariffs where the price is fixed until 2016 and five fixed until 2017.'

Adam Scorer, of customer watchdog Consumer Futures, said: 'A freeze at current electricity prices will provide security and reassurance for millions of consumers, even if it will not reduce the burden on households struggling to afford to keep their homes warm.'

Number switching energy supplier lower now than a decade ago

The number of people switching energy supplier is lower now than a decade ago, a study shows.

In 2003 a total of 7.26million switched gas and electricity supplier, compared to only 5.88million in 2013.

The numbers peaked in 2008 at 9.58million and have been falling ever since.

The research was carried out by The Big Deal which is arranging collective switching so a large group of customers can secure a better deal.

It found that despite what Energy UK and the Big Six claim the amount of switching is lower now than it was ten years ago.

Henry de Zoete, co-founder of The Big Deal, said: 'Energy UK and the Big Six claim that the market is working because more and more people are switching.

'The truth is the opposite. There are less switches now than ten years ago. Investigating the Big Six is long overdue but people need help with their bills now.

' A review will take years to complete and even longer to implement. People can rightly ask how many more winters will go by before bills come down? The Big Deal will deliver cheaper energy now by harnessing people power to get a better deal.'


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