POLITICS
10/10/2013 05:54 BST | Updated 10/10/2013 05:59 BST

Energy Firm SSE First To Increase Prices After Ed Miliband's Freeze Pledge

Scottish and Southern Energy signage on a van in Perth after the energy firm announced price increases.
PA
Scottish and Southern Energy signage on a van in Perth after the energy firm announced price increases.

Energy firm SSE has announced it will increase gas and electricity prices by an average of 8.2%, the first of the big six suppliers to do so after Ed Miliband's pledge to freeze bills until 2017 if Labour is re-elected.

"We're sorry we have to do this," Will Morris, SSE's group managing director of retail, said. The announcement led to SSE's shares on the FTSE 100 increasing by 1%.

"We know we will come in for a great deal of criticism for this decision and politicians will no doubt be lining up to condemn us," Morris added.

"We've done as much as we could to keep prices down, but the reality is that buying wholesale energy in global markets, delivering it to customers' homes, and government-imposed levies collected through bills - endorsed by all the major parties - all cost more than they did last year."

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SSE's latest increase, which is three times the rate of inflation, would come into effect from November 15, equivalent to an average of £2 a week for a typical dual fuel customer.

The energy supplier last put up bills a year ago, at 9%. Its retail operation serving household customers saw profits increase 28% to £410.1 million in the year to March as gas consumption increased by a fifth during a period that included a bitter winter. Overall pre-tax profits were up from £1.34 billion to £1.41 billion.

Energy minister Michael Fallon told Sky News: "It is disappointing news. It is for the company to justify a big increase of that kind."

Labour leader Ed Miliband pledged last month to freeze tariffs until 2017 if elected Prime Minister. This announcement drew criticism from energy firms as they warned that it could deter investment in the energy sector.

In response to SSE's price hike, Miliband tweeted: "New electricity and gas price rises announced today show the need to freeze bills. We need an energy market which works for ordinary families and businesses."

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