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Scottish Power and E.On Announce Price Cuts

Scottish Power and E.On have joined Britain’s leading energy suppliers in announcing price cuts for domestic tariffs.

After British Gas, Scottish & Southern Energy, npower and EDF Energy made public their intention to reduce gas or electricity tariffs for domestic customers, E.On and Scottish Power followed suit by announcing a 6 per cent drop in electricity prices and a 5 per cent reduction in gas prices respectively.

So far this year, only Scottish Power and British Gas have reduced gas prices, whilst the four other leading suppliers sought to lower electricity tariffs as the country emerges from what has proved a relatively mild winter.

Critics have been quick to blame energy suppliers for taking advantage of consumers over the winter period; indeed, the big six suppliers in the UK have long courted criticism for failing to pass on savings in wholesale fuel costs to end users – a strategy that has undoubtedly contributed to Britain’s appalling fuel poverty record. Have energy suppliers finally turned the corner?

Perhaps not. Each of the big six suppliers introduced price hikes late last year.

Both E.On and Scottish & Southern Energy increased gas tariffs by 18 per cent and electricity tariffs by 11 per cent in September 2011, meaning that consumers are still paying far more for energy than they were this time last year (in fact, E.On twice raised tariffs last year, when a 3 per cent gas and 9 per cent electricity price hike was imposed in February). Few people would regard a 20 per cent increase and 6 per cent drop over 12 months as a good deal, yet the suppliers appear keen to stress the value and fragility of the cuts.

Dr Tony Cocker, Chief Executive of E.On, warned: “Whilst we’re pleased to pass on this recent slight fall in wholesale prices, most experts agree that global energy prices will continue their long-term rise”.

Households in England and Wales can help to reduce their dependence on gas central heating by implementing energy saving measures such as loft insulation and cavity wall insulation. Double glazing also ensures a more environmentally friendly home, whilst solar panels can be installed at a cost to further reduce fuel bills.

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