Consumers still £53 a year worse off after cut to energy bill levies

npower has become the last of the big six energy suppliers to reveal what action it will be taking to cut prices following the Government’s review of levies on energy bills. It will be cutting prices by £38 on 28th February with a further £12 rebate due to be made on bills later this year.
 
The recent changes to prices will have left many consumers confused, with some suppliers hiking their prices last year, only to partially reverse their hikes this year. In addition, while British Gas has already pushed through its reversal (1st January), SSE customers will have to wait a further three months (24th March), which means they will miss the benefit on their winter bills. 
 
Likewise suppliers have taken different stances over which customers will benefit from reductions, with some cutting prices for all and others excluding customers on fixed price tariffs. And while suppliers have committed to holding prices into 2015, most have caveated this to say that if wholesale prices, or other costs, increase substantially and for a sustained period of time then they could still push prices up again.
 
More importantly the cuts have done little to combat the impact of sharp price rises. Reductions average out at £40 or 3%. This will make the average household energy bill £1,264 a year, still leaving consumers paying £53 or 4.3% more for their energy than in January last year when the average annual bill was £1,212.
 
Even more importantly the cuts pale into insignificance against the back drop of a decade of soaring prices. In 2004 the average household energy bill was £472 a year. In March this year once all the cuts come into effect the average bill will be £1,264 a year – an eye-watering £792 or 168% increase, which has made energy unaffordable for many households today. As a result, growing numbers are being forced to make drastic cutbacks with over eight in ten expected to be rationing their energy use this winter due to cost.
 
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "These cuts are welcome, but simply skim the surface of the hikes that went before them. The fact is that even once the decreases take effect consumers will still be left £53 out of pocket. Even more disappointing is that many won’t even get to feel the benefit this winter while some won’t get to feel the benefit at all.
 
“What is clear is that there is only so much the Government has been able to do to help consumers – it’s now time for consumers to help themselves. There is £274 difference between the cheapest and most expensive tariffs on the market, which means there is significant scope for consumers to give themselves a real price cut by shopping around and particularly looking at what small suppliers have to offer.”