Under-pressure energy giants have started announcing plans to pass on savings to customers after the UK Government unveiled a package of measures to cut bills.
Scottish Gas said it would reduce bills by £53 in January, while SSE promised to pass on savings of about £50, and Npower revealed it was planning a conditional price freeze until 2015.
The move follows a deal with the government, and comes amid public anger at recent price increases and a political row that has dominated Westminster for the last two months.
During his trade mission to China, Prime Minister David Cameron hailed his government’s efforts to ease pressure on consumers.
He said: “I said we would roll back the costs of green levies and charges and I said we would introduce more competition into the market to help get customers’ bills down and that is exactly what is going to happen.
“All customers in Britain are going to see an average of £50 coming off their bills. That’s good news for British families, good news for the cost of living and I think that should be welcomed.”
The agreement followed negotiations between the Westminster coalition parties and energy companies, described by one insider as “particularly fraught”.
Energy prices have been at the heart of the political debate since Labour leader Ed Miliband pledged in October to deliver a 20-month bill freeze if he wins the 2015 UK general election.
Mr Miliband accused the government yesterday of a “smoke and mirrors” ploy, and shadow energy secretary Caroline Flint said only a price freeze would guarantee protection for customers.
She added that the “sum total” of spending £600million of taxpayers’ money and weakening the obligation on power firms to fund efficiency measures was that “the energy companies will still be allowed to put up people’s bills this winter”.
The government said that from early next year it would cut the cost of the energy company obligation, an insulation scheme delivered by major energy suppliers, in a move that should shave £30-£35 off bills, on average, next year.
There will be a taxpayer-funded £600million rebate on the warm homes discount, which helps those in fuel poverty. This will save the average customer £12 on their bill for the next two years.
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