John McDonnell blasts energy 'cartel' after British Gas price hike

Posted On: 
1st August 2017

Shadow Chancellor John McDonnell has accused British Gas of holding its customers "over a barrel", after they announced plans to hike prices by 12.5%.

John McDonnell has accused British Gas of "exploiting" its customers
PA Images

The firm is set to impose the rise from September, its owner Centrica has said, in a move that is set to affect 3.1 million consumers.

Mr McDonnell branded the rise “extortionate” and said the firm were "exploiting" those on their tariffs.

Labour hits out at Conservatives over energy bill cap 'U-turn'

Energy changes will save consumers £40bn in coming decades - Government

Leaked Labour manifesto draft reveals plans to nationalise railways, Royal Mail and energy sector

"I think it is extortionate at this point in time when peoples’ wages are being cut or frozen and people are struggling,” he told the BBC.

"We’ve said from the Labour Party we would issue a price cap initially, but also we would develop alternative energy supplies so this cartel that we have now cannot control pricing levels and hold us over a barrel ever again in the future. I think they’re exploiting their customers."

Shadow Energy Minister Alan Whitehead accused the government of reneging on their election manifesto pledge to impose a pay cap.

"They have parked this in a lay-by and are not doing anything about it," he told the Today programme.

The Government has also expressed “concern” at the rise however, and hinted that the imposition of a pay cap remains an option if energy regulator Ofgem fails to safeguard customers.

"Energy firms should treat all their customers fairly and we're concerned this price rise will hit many people already on poor-value tariffs,” they said.

“Government policy costs make up a relatively small proportion of household energy bills. Wholesale prices are the bigger portion of household bills and are coming down.

"The Business and Energy Secretary has written to Ofgem asking what action the regulator intends to take to safeguard customers on the poorest value tariffs and the future of the standard variable tariff.

"In response, Ofgem has committed to taking prompt action, in consultation with consumer experts, to develop proposals including a safeguard tariff.

"We want to see rapid progress on this commitment and are ruling nothing out."


Centrica chief executive Iain Conn told the Today programme that costs in the “transmission and distribution” of electricity was the main reason behind the hike.

"We have seen our wholesale costs fall by about £36 on the typical bill since the beginning of 2014 and that is not the driver," he said.

“It is transmission and distribution of electricity to the home and government policy costs that are driving our price increase."

He said the firm were selling electricity “at a loss” and that is “not sustainable”.