Europe

UK households overcharged for electricity: Labour

343245_UK-electricity-overchargeBritain’s main opposition Labour says that energy firms paid nearly £4 billion more than the average market rate for electricity over a three-year period and passed the costs onto the consumers.

The Labour party, which analyzed official figures, said the households in Britain may have paid around £150 over the odds for their electricity during the last three years, The Guardian reported on Wednesday.

The opposition party said that the ‘Big Six’ energy suppliers appear either to be inflating their prices to make extra profits for their energy firms, or striking very expensive deals at the expense of consumers.

Caroline Flint, the shadow energy secretary, said that the figures revealed the “full extent of the way consumers have been overcharged for their electricity.”

“Energy companies always blame wholesale costs when they put up bills, but it now looks like they could have deliberately inflated prices to boost profits from their power stations,” Flint claimed.

“The time has come for a complete overhaul of our energy market. Labour will break up the big energy companies, put an end to the secret deals and force them to do all of their trading on the open market,” she added.

The Labour party says it will freeze prices for 20 months if it wins the general election in 2015.

The party said it obtained the figures by comparing the price paid for electricity by the energy giants with the average market price a year ahead.

However, Energy UK, which represents the Big Six — SSE, E.ON, EDF, npower, Scottish Power and British Gas — said these figures were “totally different” and could not be compared because they cover more than just the wholesale cost of energy.

“It is also worth pointing out that there isn’t a single ‘wholesale’ price. Different companies buy at different times, from different people, for different prices depending on demand, forecasts and a whole host of other factors,” a spokesman said.

“These different business practices mean that each energy company will be paying a different amount for its wholesale energy,” he pointed out.

Labour disputed the Energy UK’s claims, saying it did not believe these extra costs could account for the large price differential.

Flint said the public were fed up with the “same old excuses” from the energy industry.

The party’s analysis is likely to add to pressure on UK Prime Minister David Cameron to address the soaring cost of fuel, which now stands at a record high of more than £1,400 per household.

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