Gas Prices up - Urgent Action Needed

11.01.00pm UTC (GMT +0000) Wed 30th Jul 2008

British Gas has today confirmed that it has increased gas prices by 35% and electricity prices by 9% with immediate effect. The increase will see average bills for people living in and around Devon rise to more than £1,250. Cllr Sally Morgan, the Liberal Democrat Parliamentary Candidate for Central Devon, has said that energy companies should be compelled to use the money from a £9 billion European windfall to help protect some of the most vulnerable people from the effects of fuel poverty.

The energy firms received the multi-billion-pound windfall thanks to the giveaway of free permits to emit Carbon Dioxide under the European Union's Emissions Trading Scheme. Previous estimates have put the proceeds of that windfall at £9bn, although OFGEN estimates the true figure could be even higher.

Sally commented: "Many local people will wonder how energy companies can enjoy a massive subsidy at a time when many families are facing an increasingly desperate struggle to pay their energy bills.

"This multi-billion pound windfall should be used to protect the most vulnerable people from the effects of fuel poverty. If action is not taken now then many families are going to face an increasingly tough time paying their bills this winter.

"Everyone I meet is worried about rising prices. There is also a lot of fear about job losses and the threat of repossessions as house prices fall. People want to see action from Gordon Brown, but nothing seems to be happening.

"Gordon Brown and Labour are simply out of touch with real life in Devon and elsewhere."

The increase in prices by British Gas comes just a few days after EDF Energy put up gas prices by 22% and electricity prices by 17%, with other firms expected to follow suit.

Consumer watchdog Energywatch said it believed the 35% gas bill rise was the biggest single increase in the price of a utility seen to date.