Price freeze puts heat on energy firm's rivals.
BIG Six energy supplier SSE yesterday pledged to freeze household gas and electricity prices until January 2016, immediately putting rivals under pressure to do the same.
The move, which comes amid intense political lobbying on energy companies over rising bills and soaring profits at a time when household wages are being squeezed, was hailed by Prime Minister David Cameron as "hugely welcome".
The sector faces the outcome of a regulatory probe within days, which is widely expected to see it referred for a full-scale two-year competition investigation.
Six months ago, SSE criticised a pledge by Labour to force suppliers to freeze prices, saying it would lead to "unsustainable loss-making retail businesses".
Labour's policy was dismissed at the time by Mr Cameron as unworkable and "Marxist", and Ed Miliband told the House of Commons yesterday that SSE's decision had "totally demolished" the Prime Minister's arguments on prices.
"Week after week, he denounced Labour's call for an energy price freeze to help families and businesses, but now apparently he supports a price freeze," Mr Miliband told MPs. "Can he explain why a price freeze was wrong six months ago but it's the right thing to do today?" Mr Cameron said that SSE had said a principal factor allowing it to freeze prices was the Government's decision to roll back green levies on energy bills, which saved households an average PS50 a year.
"It is hugely welcome in our country that energy companies are cutting and freezing their bills," Mr Cameron said at the weekly session of Prime Minister's Questions.
"What we have done is reduce the cost of energy charges so that companies are able to cut their bills... It is our policy that bills should be cut and bills are being cut under this Government."
Energy Secretary Ed Davey said: "SSE have shown today that the big energy firms are able to cut their costs and profits. Customers of the others will be asking whether their suppliers will do the same. The Government encourages people to shop around for the best deal."
SSE chief executive Alistair Phillips-Davies said the freeze would knock PS100m off profits for 2015.
He said: "We felt we needed to make a bold statement. We have clearly said we will have to accept lower profits."