‘Big Six’ E.on Hikes Energy Prices by 3.7% a Day After Autumn Statement (Photo: Reuters)
‘Big Six’ E.on Hikes Energy Prices by 3.7% a Day After Autumn Statement (Photo: Reuters)

German utility E.on has revealed that it will increase energy prices for the average British household next year, only a day after UK Chancellor George Osborne said the coalition government is helping to slash gas and electricity bills.

E.on said, in a company statement, that it will increase retail energy prices for British customers by an average 3.7% from 18 January 2014.

E.on is a member of Britain's "Big Six" energy providers which together account for 99% of the country's supply. It is the last of the six to release plans for retail price tariffs.

In September, opposition leader Ed Miliband pledged to freeze energy prices until 2017, if the Labour Party wins the general election in two years.

Three months later, the coalition government pledged to cut energy bills by £50 a year, via a series of measures.

Meanwhile, a number of the UK's "Big Six" energy companies stated an intension to cut household bills or not raise prices until 2015.

Npower said it would not raise prices any more until spring 2015, unless wholesale costs go up, and EDF promised to adhere to the same pledge.

SSE and Centrica have said they will also pass on cost reductions.

British Gas said it was dropping household gas and electricity prices by an average of 3.2% and that these price reductions would take effect from 1 January.

Centrica, British Gas' parent company, said: "This price cut is based on the assumption that the government's proposed changes will be implemented in full."

SSE said it would cut household bills by 4% this winter.

Energy minister Ed Davey said fuel poverty subsidies would be moved into general taxation and some green policy targets would be slowed down; homebuyers could instead be granted £1,000 to spend on energy-saving measures.

The government measures also included a reduction in the Energy Companies Obligation (ECO), which requires energy companies to provide insulation or other energy-saving measures to 400,000 homes a year.

In the Autumn Statement on 5 December, Osborne branded the Labour Party's promise to fix energy prices if it wins the general election in 2015, a "con".

"We are tackling energy costs by being transparent and not by conning consumers that we are able to control oil prices," he said in parliament.

"Instead, we are planning to roll-back on levies that the previous government installed which will in turn support the lowest income families because it will not add a penny to the taxpayer's bill.

"My political philosophy is to tackle this by not penalising people with more taxes and regulation. Going green doesn't have to cost the earth."