A Labour government will legislate to limit future price hikes by the energy companies after one of the so-called Big Six announced it was putting up charges by almost 10 per cent, Shadow Chancellor John McDonnell has said.

Npower has come under fire from the Government and energy regulator after setting out plans to hike gas and electricity prices by 9.8% – a move that will add £109 to the annual dual fuel bills.

With other providers expected to follow with large increases, Mr McDonnell said a future Labour government would bring in statutory price controls.

“We would control them. We would legislate to control them. We can’t allow this to keep going on,” he told BBC1’s Breakfast.

“You would introduce legislation in Parliament. You would limit the amount they can increase their prices by.”

Npower said the rise – which comes in the face of rising wholesale costs – had been a “hugely difficult decision”.

It was rebuked by regulator Ofgem, which said it did not see “any case” for significant price increases where suppliers have bought energy in advance.

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Mr McDonnell said Labour would seek to encourage more local suppliers as had happened in Germany.

“They used to have a big six companies. What they’ve done is they’ve invested at a local level where local communities are providing their own energy, largely renewable energy, and those profits have gone back into those communities,” he said.

“In Germany now the big companies no longer control the energy supply. We have got to invest in the lifetime of the parliament to enable that to happen.”

Ed Molyneux, head of research for consumer group TheBigDeal.com, said 1.74 million customers would be affected by npower’s “outrageous” price rise at a total of £190 million.

“When wholesale prices fell people never saw cuts in their prices as big as this rise. Once again the Big Six are putting their profits before their customers,” he said.

“The announcement shows that if you’re not on a fixed deal you simply have no control over the price you pay for your energy.

“More Big Six price rises are on the cards. If you’re on a Big Six standard tariff you need to switch as soon as possible.”

Npower’s price hike on typical dual fuel annual energy bills is made up of an average increase of 4.8 per cent on gas and 15 per cent on electricity.