Power firm falls in line with price hike

The controversial decision by Scottish and Southern Energy (SSE) to increase electricity bills by an average of 11 per cent, and domestic gas bills by about 18 per cent from 14 September, comes after two other major suppliers in Scotland announced similar rises.

SSE supplies gas to one million customers north of the Border, which means one in five Scots will be affected by the soaring prices announced by the company yesterday.

The move sparked an intervention from Scotland's finance secretary, John Swinney, who said he had asked SSE executives to explain the sharp increases.

Mr Swinney also said fuel price increases were "driving up levels of fuel poverty" after ScottishPower and British Gas announced increases in fuel bills of almost 20 per cent, which will hit households later this year.

Groups representing Scottish consumers also warned that the move by SSE "heaps more pressure onto households", as MSPs from all parties condemned the increase.

Mr Swinney said: "These latest fuel price rises by SSE come on top of similar high price rises announced by Scottish Power and Scottish Gas recently.

"Power companies must do all they can to mitigate the impact on the most vulnerable people in our society, and we support the work of Ofgem to protect consumers, deliver transparency on energy prices, and ensure that companies treat their customers fairly.

"These swingeing price rises are driving up levels of fuel poverty, which is a disgrace in energy-rich Scotland.

"I will be meeting with SSE shortly to discuss the justification for these price rises and how actions under its energy efficiency obligations can be best targeted at those most in need in Scotland."

Trisha McAuley, depute director of Consumer Focus Scotland, urged the energy industry regulator Ofgem and the Competition Commission to intervene.

"Knowing another price rise was round the corner will not soften its impact for customers," she said.

"This massive increase heaps more pressure onto households and will tip thousands more people in Scotland into fuel poverty.

"We know suppliers point to rising wholesale costs, however, we also know that although wholesale prices have risen recently they remain around a third lower than their 2008 peak.

'Ofgem must get to the heart of whether prices are fair. If the regulator can't do that, it must refer the market to the Competition Commission, who can use its forensic skills and experience to find remedies for complex markets such as this."

Scottish Labour's deputy finance spokeswoman, Rhoda Grant, claimed that soaring energy prices increase meant that one in three Scots are "now struggling to heat their home".

"With energy company after energy company announcing price hikes like this, it is our duty to help the poorest and most vulnerable in our society, who will be hit hardest by soaring bills in these already tough times," she said.

SSE defended its plans, pointing to soaring wholesale energy prices.

Ian Marchant, chief executive, said: "I am sorry that we have had to announce an increase in household energy prices at a time when many people's budgets are under strain, but the upward pressures on prices have become too great."

Jo Swinson MP, deputy leader of the Scottish Liberal Democrats, said customers would be "unconvinced about the reasons" given.

"Ensuring measures are put in place to help vulnerable individuals and households must be a priority for Scottish ministers."