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Energy bills rocket by up to £250 but Brown pledges housing help
Jonathan Prynn and Paul Waugh, Evening Standard29 Aug 2008
More than 600,000 families in London and the South-East were hit by energy bill increases of up to 34 per cent today.
Tens of thousands face paying more than £250 extra a year.
Moves by npower and Scottish Power to increase their gas and electricity tariffs mean all of the "Big Six" suppliers have now pushed through big rises this summer.
The news came amid warnings that house prices could fall by up to 30 per cent and as news emerged of Gordon Brown's economic recovery plan.
Both npower and Scottish Power said they had made the decision to increase prices "reluctantly" but had been given no choice because of "massive increases in wholesale costs".
German-owned npower, which has around 200,000 customers in London and 300,000 elsewhere in the South-East, said its electricity was going up by 14 per cent and gas by 26 per cent.
For dual-fuel customers that will add £214.55, or 22 per cent, to a typical bill taking it to £1,186.31 a year.
Scottish Power, which is thought to have at least 100,000 customers in the region, is increasing its electricity price by nine per cent and gas by 34 per cent.
Its dual fuel customers will face an average £259 increase, taking their bills to £1,299 a year.
Giuseppe Di Vita, managing director of npower, said: "We've made this decision extremely reluctantly. Npower is investing heavily in new, cleaner generation. Britain needs 20 new power stations by 2020 and that's why, each and every year, for the next 10 years, we plan to spend more than we earn to ensure the lights stay on."
The increases are a blow to householders and the Prime Minister whose recovery plan, to be unveiled next week, will include emergency moves to help struggling home owners and first-time buyers.
Housing minister Caroline Flint is preparing to launch proposals that would allow councils to buy repossessed and unsold properties.
The key measure would be a selective mortgage-to-rent scheme that would allow residents to stay put in their own home if they defaulted on their mortgage.
However, Chancellor Alistair Darling remains unconvinced about a more radical plan to allow councils to compete as mortgage lenders with access to a £2billion pot of government borrowing.
Town hall chiefs welcomed some of the proposals but warned that more help was needed.
Tory Paul Bettison, the Local Government Association's spokesman on housing, said: "The amount of money made available may not be enough to make a significant difference."
Labour's fears of a full-blown recession were underlined by a startling warning from one of the Bank of England's senior policymakers.
Professor David Blanchflower, who as a member of the Monetary Policy Committee votes on the interest rate the Bank sets, said that two million Britons may be out of work by Christmas and big cuts in interest rates are needed now to stop the economy heading into a deep and prolonged slump.
Hewarned that things could get even worse, with 30 per cent falls in house prices and described the Bank's forecast this month of the economy standing still over the next year as "wishful thinking".
• Calls for corporation tax cuts were redoubled today after it emerged that two more big British businesses - engineering firm Charter and investment managers Henderson Group - were relocating their headquarters to Ireland because of its lower taxes.
Shadow chancellor George Osborne wrote to Alistair Darling to urge the Chancellor to adopt Tory plans to cut corporation tax and simplify business taxes.
"As you demonstrated in last year's pre-Budget report, you are capable of adopting Conservative proposals," Mr Osborne wrote.
"With companies leaving Britain, weakening an already ailing British economy, I urge you to adopt our proposals in order to restore our competitiveness and help prevent any more companies from deciding to leave the UK."
Reader views (6)
Brown is not interested in helping anyone, he is deluding himself into thinking the electorate might be bribed into voting for his crackpot party.
- Albert Hall, kettering, 29/08/2008 14:08
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Gordon, in the name of God just go away.
- Mikko Takala, Drumnadrochit, Scotland, 29/08/2008 14:03
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The warning signs have been there for too long, and all this Govt has done is brushed them off.
With Hendersons relocating to Ireland, the rest of the financial institutions will be watching closely and most likely, will follow suit.
If Merrill's pull off offsetting their sub-prime losses to their UK arm, they too won't pay any UK Corporation tax for the next 50+ yrs.
I'm sorry, but it's time the politicians that WE elected to represent us, put our interests first, and not our so-called European 'partners'. For the UK to survive we need tax-cuts. That will mean a cut in public spending and a vast reduction in the billions we hand over to the EU each yr.
It's now or never, but I can't help but feel it's already too late.
- Scott, London, 29/08/2008 13:46
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Completely agree with the economic prognosis. Things are going to get much worse before they get better, we need tax and interest rate cuts now to limit the damage. Unfortunately Brown has run up a massive budget deficit through waste and bureaucracy, so he has limited room for manoeuvre. We are reaping what he sowed as Chancellor.
- Michael, Bournemouth, 29/08/2008 13:40
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So what, all these stupid 1/2 bedroom mini flats were at least 30/40 over valued. Nu-Labours assault on the south east was only to build holiday second homes for Eastern Europeans and asylum seekers. Not real and born out of non-jobs and over inflated wages and benefits. Any one seen the IMF recently because this is just history repeating itself. Expect pound to collapse and 5 million unemployed. Only a guess but a lot closer then the idiots who said house prices would not fall because it was different this time. No money means no money what part does wee Gordy not understand.
- Mike, London, 29/08/2008 12:00
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Where is our dithering PM, by the way? He seems to have disappeared off the radar since his holiday. Too much to expect him to show some leadership at a time like this, I guess?
- Mark, London, 29/08/2008 11:09
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