'The cheapest unit of energy is the one you don't use': Boss of npower's YouTube message to customers as firm hikes energy prices by up to 11.1%

Electricity tariffs will rise by 9.3%, gas prices by 11.1% from December

Company blames rising fuel costs and meeting government schemes

Move comes after 9.2% rise by British Gas and 8.2% increase by SSE

David Cameron says he 'understands why households are angry'

Ed Miliband: 'We've got a PM standing up for energy firms. We need action'



Infuriated customers: NPower boss Paul Massara told residents facing £1,500 bill to 'just use less'

Millions of families are facing annual gas and electricity bills of more than £1,500 for the first time after a price hike by energy giant Npower.

The German-owned supplier was accused of putting ‘profits before people’s lives’ after it announced the average dual fuel bill would rise by 10.4 per cent to an average of £1,491 per year.

The hike means customers in four regions – London, South Wales, the South and parts of Scotland – will see their average bills top £1,500 a year, an all-time high.

Npower – which was accused by MPs earlier this year of dodging tax – insisted the Government’s green taxes were largely to blame for the increase. But it did admit it wanted to increase its own profit margins – to 5p in the pound.

Npower is the latest energy giant to raise prices, after British Gas announced a 9.2 per cent rise last week, and Scottish & Southern Energy an 8.2 per cent hike a week earlier.

Yesterday the firm’s chief executive Paul Massara further infuriated customers when, in a video posted on YouTube , he defended the price hike.

In it he pointed out: ‘It may be a cliche but it’s true: the cheapest unit of energy is always the one that isn’t used.’

He meant householders can protect themselves against rising tariffs by installing double glazing or loft insulation. But he was accused of patronising his customers – many of whom pointed out that they were already rationing their heat.

Mr Massara’s personal Twitter feed is blocked to non-approved followers, but that did not stop people using the social media site to criticise him. One angry customer described his YouTube performace as ‘vomit inducing’.

Earlier this year, MPs reacted with fury at Mr Massara’s defence of Npower’s failure to pay corporation tax. In evidence to Commons select ommittee, he admitted the firm paid no corporation tax in the three years 2009, 2010 and 2011 – despite making £750million over the period.

He insisted it was legal and even desirable because it meant the firm could spend more money on ‘keeping the lights on’. Yesterday, Npower again defended its profit of about £64 per customer a year as ‘reasonable’.

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Controversial: Paul Massara delivers a message on YouTube advising customers to cut back on their energy usage as the company announced rises of up to 11.1 per cent from December

Deputy Prime Minister Nick Clegg issued a warning to energy firms, telling ITV’s The Agenda programme: ‘Profit is what drives a lot of these things but you can’t operate without public consent.’

Npower tried to shift the blame for higher energy bills by pointing to green taxes and eco schemes imposed by the Government, the cost of running the national grid of pipes and wires, as well as ‘the actual cost of buying energy’.

But the wholesale price of gas – which makes up half of the bill – is up just three per cent compared with a year ago, which would only put up bills by 1.5per cent.

In the video Mr Massara said: ‘This has been a really hard decision for us.’

How bills have soared: British Gas dual fuel energy bills have soared from £1,100 in 2010 to around £1,465 after the latest round of price hikes. Graph provided by MoneySuperMarket.com In a blog, he added: ‘I know people think energy companies are raking in huge profits at the expense of customers, but this simply isn’t the case.’ The official customer body, Consumer Futures, called for two inquiries to establish whether the public are being ripped off – one into the structure of the market and a second into green taxes. Energy Secretary Ed Davey repeated the official government line that power price rises are ‘disappointing’ and urged consumers to shop around. Clare Welton of the Fuel Poverty Action Group said: ‘We need to acknowledge the problem is the Big Six themselves: they will never priortise people’s lives over their profits.’