British Gas was accused of delivering the “ultimate slap in the face” to millions of families today as bosses ordered a huge hike in electricity prices.
The 12.5 per cent rise will add £76 pounds to the typical bill of its three million electricity customers and will come into effect on the 15th September.
The supplier - owned by the energy giant Centrica - said it had been forced into the “difficult decision” by rising costs and was its first for more than three years.
But the “unjustifiable” move sparked a wave of anger from customers and raised fears that other suppliers could follow suit at a time when household budgets are already been squeezed by rising prices triggered by Brexit.
Tariff switching firm the Big Deal said its own research suggested British Gas should be cutting bills as the overall costs for energy companies - including wholesale, network and policy costs - have fallen by nine per cent since December 2016.
Co-founder Will Hodson said: “British Gas announcing a price rise as they make half a billion in profit is the ultimate slap in the face for families. Their standard tariff now costs £286 a year more than the cheapest deal on the market.
“We know that keeping energy prices as low as possible is vital, and our new standard tariff price has again been set at a level lower than most of the top ten suppliers. We are able to do this because we have managed our own cost base tightly.”
Big Switch said Centrica made £489 million in profits on its domestic customers during the first half of 2017 and Mr Conn received a 40 per cent pay rise in 2016 making his total remuneration package worth £4.15 million.
Government sources reiterated Theresa May’s threat to hit the industry with price capping if charges kept on being hiked.
“We rule nothing out,” one told the Standard. “We have gone to Ofgem and said we want action to safeguard tarrifs. The threat of legislation is stil there.”
But Labour’s shadow energy minister Alan Whitehead said the “whopping price increase” was unjustified – and accused the Conservatives of breaking a manifesto pledge to impose a cap.
“On the face of it, it does not appear to be justifiable at all from where the market is going,” he said.
“What we need – and what the Government should have done, because there was an agreement going into the election - is a price cap.
“Unfortunately the Government has decided, despite having that in their manifesto, that they are not going to do that now.”
The Conservative manifesto pledged a wide-ranging cap to protect 17 million customers from excessive rises, saving people an estimated £100 a year.
It stated: “We will go further. We will introduce a safeguard tariff cap that will extend the price protection currently in place for some vulnerable customers to more customers on the poorest value tariffs … the safeguard tariff cap will protect customers who do not switch against abusive price increases.”
After the election the plan did not appear in the Queen’s Speech and ministers said they were “considering the best way” to protect people on poor-value tariffs.
Martin Lewis founder of consumer websitecheapenergyclub.com, which has over two million members, said: “This is British Gas’ catch-up price hike.
"It was the only one of the big 6 firms not to raise prices at the start of the year, and now, as predicted, it’ll do it from September.