Scottish Power Sends Energy Prices Soaring

Energy companies will plunge half a million households into fuel poverty if they follow Scottish Power's decision to dramatically hike gas and electricity bills.

That is according to Consumer Focus, in the wake of confirmation by the firm that it is to raise its gas bills by 19% and electricity bills by 10% from August 1.

The gas bill increase is almost four times the rate of inflation.

It is the first of the major energy suppliers to confirm price rises since the winter period ended.

The Bank of England's Quaterly Inflation Report warned last month utility bills would rise by at least 15% before this winter begins.

Speaking on the Jeff Randall show, John Robertson, MP for Glasgow North West and member of the Energy and Climate Change Committee, lashed out at Scottish Power.

He said: "I think it's an absolute disgace.

"People are having their money withdrawn from their winter fuel allowance, and those who will suffer the most are the poor and the elderly."

Mr Robertson also said that the big six energy companies are "working as a cartel" and that a lack of competition is helping them put up prices as they wish.

He said: "It is very naive of Ofgem to not think these companies are working as a cartel. As one company puts its prices up, another one follows."

Energy providers have been hinting at bill increases as a result of higher wholesale prices they are facing for delivery by the year's end.

Scottish Power, which says its purchase costs have risen 30% since November, also blames the rising cost of meeting Government's environmental and social programmes and of distributing electricity via the National Grid.

The company has five million UK customers but says it will affect just under half that number of households because the remainder are on fixed rate tariffs.

It last put its prices up in November when gas prices rose 2% and electricity bills by 8.9%.

It says households on a dual fuel tariff paying monthly by direct debit will see their bills increase by an average of £175 a year following the latest increase.

Raymond Jack, Scottish Power's UK retail director, said: "We understand times are difficult for many people, and we have done what we can to absorb these additional costs for as long as possible to minimise the impact on our customers."