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UK power firms accused of scam

Thursday, January 02 14:22:27

Britain's opposition Labour party accused the country's big six energy suppliers of overcharging consumers by almost 4 billion pounds as it sought to keep living standards at the heart of the political debate before a parliamentary election next year.

Labour, which is ahead of Prime Minister David Cameron's Conservative party in opinion polls by around 6 points, dominated the agenda towards the end of last year with a popular promise to freeze energy prices for 20 months if elected.

Though the economy is staging a strong recovery after years of stagnating, inflation, while falling, has outstripped wages meaning many voters have yet to feel the upturn's benefits, an anomaly that Labour has used to criticise Cameron's party.

The big six energy firms - British Gas-owner Centrica , SSE, RWE's npower, Iberdrola's Scottish Power, E.ON and EDF Energy - supply 98 percent of homes. They angered the public by unveiling above inflation price rises at the end of last year.

On Thursday, Labour said its analysis of comparative energy market price data suggested that the six companies had overcharged consumers to the tune of over 3.8 billion pounds in the past three years by artificially inflating the cost of wholesale power that they purchased from power stations.

That amounted to households being overcharged by, on average, nearly 48 pounds each year, Labour said.

"These figures reveal the full extent of the way consumers have been overcharged for their electricity," Caroline Flint, Labour's energy spokeswoman, said in a statement.

"Energy companies always blame wholesale costs when they put up bills, but it now looks like they've deliberately inflated prices to boost profits from their power stations."

Labour reached its conclusion by comparing the price paid for electricity by the energy giants with the average market price a year ahead provided to them by First Utility, Britain's biggest independent energy supplier. (Reuters)