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Scottish Power Raises Bills as Living Costs Split U.K. Coalition

Scottish Power Ltd. became the fourth energy supplier to raise U.K. prices in two weeks as the ruling Conservative-led coalition was divided on how to address voter anger over utility bills driving up the cost of living.

Scottish Power, owned by Iberdrola SA (IBE) of Spain, will raise gas prices 8.5 percent and power an average of 9 percent from Dec. 6. It’s the fourth of the Big Six suppliers dominating the U.K. market to raise rates after RWE AG (RWE)’s Npower unit Oct. 21. Annual inflation was running at 2.7 percent last month.

Prime Minister David Cameron failed to win the backing of his deputy Nick Clegg for plans to reduce bills by rolling back subsidies for renewable power. Cameron was responding after a call by his Conservative predecessor John Major for a one-time tax on utilities. Earlier ministers had rebuffed the opposition Labour Party leader Ed Miliband’s pledge for a price freeze.

“With an increase in costs for delivering compulsory schemes to reduce carbon emissions and improving energy efficiency in homes, we unfortunately have no other option than to pass these on by increasing our prices for customers,” Neil Clitheroe, Scottish Power’s chief executive officer for energy retail and generation, said today in a statement.

Costs of purchasing and delivering energy also rose this year, he said, contributing to the 113-pound ($183) increase in the average annual bill for gas and electricity combined.

“With 15 independent energy suppliers to choose from outside the Big Six, it’s surprising that these companies think they can keep getting away with bill hikes of this magnitude,” Energy and Climate Change Secretary Ed Davey, a member of the junior coalition Liberal Democrats, said in a statement.

Lawmakers have called the companies including Centrica Plc (CNA) and SSE Plc (SSE) to parliament on Oct. 29 to explain their increases.

Cameron yesterday sought to regain the political initiative by announcing an investigation into competition in the industry and pledging to cut green levies that add to bills.

To contact the reporter on this story: Sally Bakewell in London at sbakewell1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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