MPs' committee warns of energy bill hikes

28/07/2008

Millions of British households are to be hit by increases to the cost of gas and electricity, MPs have warned.

In a new report, the Business and Enterprise Select Committee also said that the energy markets in the UK were "not functioning as efficiently as they should", and that high fuel costs for industry could lead to the loss of manufacturing jobs.

However, the MPs also found that there was no evidence that Britain's "big six" energy providers - including market leader British Gas - operated as a closed cabal to keep prices high.

"The UK's energy markets are not functioning as efficiently as they should [and] industrial consumers now face prices above European levels…if these price differentials are sustained, they will affect the competitiveness of the UK economy," the report claimed.

Reacting to the report, EuroDebt director Kevin Still said: "We have been monitoring the impact of rising household expenditure over the last five months and over 25 per cent of our new clients cite spiraling debts as the main reason why they entered a Debt Management Plan, mainly caused by significantly reduced disposable income.

"Loss of income or redundancy account for around 11 per cent of new clients where their employer may be downsizing."

The MPs' report comes as EDF, one of Britain's "big six" providers, announced price rises to customer energy tariffs of 22 percent for gas and 17 percent for electricity.

This move is expected to be mirrored by other "big six" energy suppliers in weeks to come.

Tags; Current UK Economy,

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