FORMER LABOUR MP Alan Simpson accused the so-called Big Six energy companies of rigging the market yesterday after new figures revealed that households have forked out an unnecessary £7.3 billion on bills in the last five years.
Families supplied by British Gas, EDF, Npower, SSE, E.ON and Scottish Power have been paying out an average of £853 more a year than they needed to in that time, Ofgem data shows.
Energy provider Bulb looked at Ofgem figures and found that Big Six firms generally attract new customers by initially offering cheaper fixed tariffs.
But those tariffs tend to expire within one to two years, at which point customers are usually transferred to standard variable tariffs costing up to 30 per cent more.
A recent poll by uSwitch found that a third of British people are already concerned about paying their energy bills this winter, while more than half are struggling with their household finances.
Despite falling wholesale prices, British Gas became the latest Big Six energy supplier to raise its prices at the start of this month, ramping up the cost of electricity by 12.5 per cent for some 3.1 million customers.
Scottish Power, E.ON and EDF all imposed increases earlier this year, while SSE followed suit in April. Price hikes have added £109 a year to dual fuel bills for Npower customers.
Bulb co-founder Hayden Wood said: “Loyalty towards a brand is often rewarded, yet households who’ve put their trust for years in a single energy company are being forced to subsidise others who switch every 12 months.
“These latest numbers show that so-called standard tariffs no longer have the customers’ best interests at heart. The Big Six need to show that they’re putting customers first, instead of profits.”
Mr Simpson, an energy and climate change campaigner, told the Star: “Britain’s energy market is a rigged game.
“It’s designed to feed the Big Six, not warm the 60 million.”
Theresa May has quietly backed out of her promise to put a cap on energy prices that she had said would benefit 17m people.
Her backsliding led to 53 Conservative MPs signing a letter to the Prime Minister demanding action to protect millions of households “who continue to be preyed on by the Big Six.”
The Competition and Markets Authority has warned that customers are overcharged to the tune of £2bn every year, in the face of increases in prices of between 8 and 15 per cent by the Big Six.
Ms May’s U-turn was branded a betrayal of millions of families by Labour, which said its own price-cap policy would have saved households an average of £1,149 since 2010, equating to £142 annually.
In May, the government said it had made it “quicker and easier” to switch supplier so that consumers can find the best deal.
But then energy minister Greg Clark admitted that even he did not switch as “it is quite a hassle to do so,” adding: “In my view, it shouldn’t be necessary to have to switch, to have to go through the fuss, simply to avoid being ripped off.”