Labour Claims Energy Firms Paid £4bn over Market RateIBTimes UK

British politics heated up after freezing energy prices became a central part of the Labour party's campaign.

As winter approached, Labour leader Ed Miliband shifted the goal-posts dramatically by stating he would freeze energy prices for two years if Labour was elected in 2015.

Catching the coalition on the back foot, Miliband's comments seemed to ignite a vast reserve of public antipathy towards the energy sector's biggest providers, the so-called "Big Six".

Miliband said the big energy firms would be split up and governed by a new tougher regulator to give people "a fairer deal". He claimed the move would save average households £120 and businesses £1,800. This shake-up would cost the energy giants £4.5bn, however.

Earlier in the year MPs on the House of Commons energy committee accused Ofgem of being "ridiculous" after the energy regulator said it would be too "expensive and intrusive" to ask energy companies to be more transparent about their profits.

The MPs accused big energy providers of booking profits with overseas subsidiaries to mask the extent of their UK profits.

Ofgem announced in a November report that the six largest providers - British Gas, Npower, Scottish & Southern Energy (SSE), Scottish Power, E.on and EDF - made a combined £1.2 billion in their household supply businesses last year, up 75% on 2011 and five times higher than £221 million in 2009.

Profit per household was £53 in 2012, against just £8 three years before.

Ofgem said last year's dramatic jump was triggered by a 17% rise in average bills during 2012 and the effect of the bitterly cold weather, which forced Britons to turn up the heating.

Despite coining it from consumers, the large energy companies had mostly announced further price increases for winter 2013.

SSE said it would increase prices by 8.2% from 15 November; British Gas said prices would rise by 9.2% on 23 November; Npower said its dual-fuel bills would go up by 10.4% on 1 December; Scottish Power's price rise would be 8.6% for dual-fuel energy bills from 6 December; and EDF said both gas and electricity would increase by 3.9% from 3 January.

Even Justin Welby, Archbishop of Canterbury weighed into the energy debate, calling on energy firms to assess their "social obligations" following the announced price increases.

November also saw revelations of official figures concerning "excess winter deaths". These rose 29% in 2012-2013 - the highest level for four years - as many OAPs perished inside their homes from the cold.

As the energy row deepened, Centrica chief executive Sam Laidlaw, pledged that he would give up his bonus. Laidlaw's pay package for 2012 totalled £4.96m, including a £2.6m long-term incentives bonus package.

After that announcement Labour called upon all energy bosses to follow Laidlaw's example and forgo their bonuses.

However, Paul Massara chief executive of energy firm Npower described Laidlaw's bonus pledge as a "gimmick".

Massara defended his own bonus, which he claimed was around £150,000 last year. He said it was linked to his performance and reflected the level of help given out to customers.

He said of Laidlaw's pay concession: "If Sam was earning £5m a year and he's willing to give £1m, good for him."

Meanwhile, it was reported that Steve Holliday, chief executive of National Grid collected a bonus worth more than £2m in June, and that he had been awarded conditional bonuses in shares in the past three years worth up to £8.4m.

As dispute and recrimination rumbled on, David Cameron, who initially branded Miliband's energy price freeze "a con", hit back in December with a "credible" promise to cut £50 from consumers' bills.

The autumn statement also contained an offer to new homebuyers of up to £1,000 to help install insulation, double glazing or green boilers.

About the only piece of news not to hurl condemnation at the energy sector was the conclusion of a year-long investigation into the alleged rigging of wholesale gas prices by power firms, which found no wrong-doing.

Ofgem and the Financial Conduct Authority (FCA) had begun an inquiry in September 2012 into dodgy trading after a whistleblower claimed the gas market had been regularly manipulated by some big power companies.

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