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An energy giant’s plan to cut bills for north and north-east
households was branded a “token gesture” last night after figures
revealed customers will still be paying one third more than in 2008.|
Scottish and Southern Energy (SSE) has announced an average 4%
reduction in standard gas bills from the end of the month.
But energy experts said the timing of the move, after the worst
winter for decades, showed that companies cared more about their
shareholders than their customers.
Wholesale gas prices have plunged, leading to accusations that the
big six providers have failed to pass on cuts quickly enough to
Despite SSE’s latest cut, which will come into effect on March 29,
its customers are still paying £287 – or 33% – more than they were
at the start of 2008.
The company, which operates as Scottish Hydro Electric north of the
border, has 3.5million gas customers but nearly 10million customers
across the UK who use gas or electricity or both. Electricity prices
will remain unchanged.
SSE said the bills for the average customer would reduce by 4%, or
Pre-payment gas customers will benefit from an average reduction of
9%, or £70, although typical pre-payment bills in Scotland will go
down by 11%.
The company has also removed the extra charges levied for “single”
fuel gas customers that will see their bills drop by an average of
7%, or £56.
The announcement comes after British Gas cut its standard gas bills
by 10% last month – the first of the “big six” energy groups to
reduce tariffs since last year.
There have been calls for widespread energy cuts after bumper annual
profits revealed by major players in recent weeks.
Centrica said its residential British Gas arm notched up a 58% leap
in profits last year, while Scottish Power’s earnings rose by 7.9%.
SSE said its changes would see the fixed amount charged for the
first 1,143kWh of gas used rise from £53 to £98, including VAT.
Gas used beyond this level will be reduced by at least 11%, giving a
net effect of a 4% reduction in the typical bill, according to SSE.
After these changes, the average “dual fuel” standard credit bill
will be £1,162 a year, it added.
Alistair Phillips-Davies, energy supply director of SSE, said: “We
believe this is a responsible package of measures which confirms
that SSE is one of the country’s most competitive energy suppliers.”
Energy consultancy McKinnon & Clarke, one of the largest purchasers
of energy in the UK, described the cut as “a token gesture”.
David Hunter, the firm’s energy analyst, believes gas and
electricity prices should have been cut by 10% to match falling
He added: “This 4% on gas alone is well short of a fair deal for
“We are very disappointed, but not slightly surprised, that the cut
comes in from the end of March once the peak heating season is over
– demonstrating once again the priority of shareholder dividends
over customers struggling to pay heating bills.
“The big six energy companies need to make a profit, but this is
Price comparison firm Energyhelpline said the cuts were a “drop in
Director Mark Todd said: “Most SSE customers will save either £30 a
year or nothing because they are dual fuel users or electricity-only
“The reduction also doesn’t come in until the end of March – unlike
the recent British Gas cut which was immediate.
“There should be plenty more gas in the tank at SSE for further
falls and we would urge them to make more meaningful price cuts.”
Uswitch said consumers still faced a battle to get a good deal.
A spokeswoman said: “Although these reductions are welcome it’s
important that consumers don’t become complacent.
“Energy prices are still far higher than just a couple of years ago
and the price cuts we’ve seen to date are not going to make up this
“Prices increased by 42% or £381 in 2008 and suppliers cut prices by
4% or £54 last year.
“Even taking into account cuts this year, we still expect household
energy bills to end up around £300 higher than two years ago,
putting even more emphasis on the need for consumers to start
managing their energy costs.”
Robert Hammond, energy expert at Consumer Focus, welcomed the price
He said: “This is good news and hopefully will spark the price war
that has been conspicuous by its absence since British Gas cut its
gas bills last month.
“Wholesale gas and electricity prices have been falling for months
and we believe price cuts for both should have been passed on before
the winter started.”
Norman Kerr, director of fuel poverty charity Energy Action
Scotland, said: “Any reductions in costs, whether in gas or
electricity, is good news for consumers in Scotland.
“We have a much harsher climate than the rest of the UK, so it is
fair that the reduction is larger here.”