The heat is on: Sparks fly as Brits race to cap energy bills

01 August 2008 / by Rebecca Sargent
While consumers struggle to pay the bills, energy companies continue to sit on profits of almost £1billion as a result of raising their prices.

As the credit crisis worsens in the UK, energy companies have been priming Brits ahead of the price rises for weeks, claiming they were always imminent as the wholesale price of gas and electricity has almost doubled.

Ofgem and the Government's Select Committee have recently launched inquiries into the retail gas and electricity markets whereby the 'big six' are suspected of colluding to keep prices unnecessarily high.

Consequently, it has been reported that the Treasury is contemplating imposing a 'windfall tax' on energy companies as they continue to outrage struggling consumers with reports of excessive profits.

A 'windfall tax' was last imposed in 1997 as a means of taxing 'grotesque' profits and using the money to help those who are really struggling and for whom winter looks bleak.

However, according to reports, opinion is split on its re-introduction as it could come back to haunt the Treasury in the form of retaliation from energy companies that persist with increasing prices. Alternatively, the Government knows that anger at the rising costs is at the centre of poor confidence in Labour and that the issue needs to be resolved.

Speaking of the potential 'windfall tax' and relief it would bring, energy spokesperson at leading financial comparison site Fairinvestment.co.uk, Steve Wagner said: "I agree with the Government that something needs to be done. The recent increases are going to start hitting households just in time for the winter months and with millions of people already in fuel poverty this is only set to get worse.

"Last week, EDF hiked their gas prices by 22 per cent and their electricity by 17 per cent. On Wednesday British Gas raised their tariffs for the second time in six months, putting their gas prices up by 35 per cent and electricity by nine per cent, making them the most expensive energy tariff on the market.

We expect the other big energy providers to follow suit and raise their prices too, which is why our advice is to cap while you still can!

"There are currently only a few fixed energy tariffs remaining in the market and these are disappearing fast. Ironically British Gas is one of the few remaining companies that are offering a capped rate, albeit an expensive one, but with energy prices set to hit new highs in the coming months, it could still be worth capping at the top end price.

"Comparison sites like Fairinvestment.co.uk prove invaluable when it comes to comparing gas and electricity tariffs. Our service searches all the available rates in your area and then if you want to fix, you can filter the results to display only capped energy prices.

"If your main concern is how green your energy tariff is, our comparison service can also filter green energy deals, saving you time and effort whilst finding the best available deals. Whatever you want from your energy tariff, we can make the process quick and easy."

Compare Gas and Electricity Quotes.

© Fair Investment Company Ltd