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Anglican leader pressures British energy giants over price rises

The Archbishop of Canterbury Justin Welby speaks to the congregation during his first service at Canterbury Cathedral in southern England Ma
The Archbishop of Canterbury Justin Welby speaks to the congregation during his first service at Canterbury Cathedral in southern England Ma

By Peter Griffiths

LONDON (Reuters) - The Archbishop of Canterbury, spiritual leader of the world's Anglicans, weighed into Britain's debate over energy prices on Sunday, calling on companies to justify the latest rises and siding with cash-strapped families.

Justin Welby, a former oil company executive who has taken on the corporate world several times since starting the job in January, said suppliers should be "conscious of their social obligations".

The rising cost of gas and electricity has dominated headlines since opposition leader Ed Miliband promised last month to freeze energy bills for 20 months if he wins the next election in 2015.

Prime Minister David Cameron, narrowly behind Labour in the polls, has rubbished the proposal as unworkable, but conceded Miliband had struck a chord with families struggling with a squeeze on wages, public spending cuts and high household bills.

"The impact on people, particularly on low incomes, is going to be really severe in this, and the companies have to justify fully what they are doing," Welby told the Mail on Sunday newspaper. "I do understand when people feel that this is inexplicable, and I can understand people being angry about it."

The rises have fed into a debate over competition in the energy market, acceptable levels of corporate profit and how the parties are going to address what Miliband calls a cost of living crisis across Britain.

Energy supplier Centrica raised household electricity and gas prices last week by an average of 9.2 percent - more than three times the inflation rate. [ID:nL6N0I71LA] Its rival SSE announced an 8.2 percent rise earlier this month.

The Church of England is a shareholder in both companies. Earlier this year, Welby said he was embarrassed to discover that the church had invested indirectly in a short-term loan company that he had described as morally wrong.

Energy prices have already risen by 24 percent over the last four years, according to regulator Ofgem. That has led to fierce criticism of Britain's "Big Six" energy companies.

The companies blame the increases on rising wholesale prices, the cost of moving energy around the country and government-imposed levies for environmental and social policies.

Welby, who worked in finance for years and sits on the parliamentary commission examining banking standards, said the companies must "behave with generosity and not merely to maximize opportunity".

"They have control because they sell something everyone has to buy," Welby told the newspaper. "With that amount of power comes huge responsibility to serve society. The social license to operate of the energy companies is something they have to take very, very seriously indeed."

RWE npower, owned by Germany's RWE AD , Iberdrola's Scottish Power , EDF Energy and Eon make up the remaining big six suppliers in Britain.

Deputy Prime Minister Nick Clegg said he agreed with Welby's call for the energy companies to justify the price rises and said they should be more transparent.

"It cannot be right that those bills are increased...yet it's all rather opaque about what drives those price rises," Clegg told Sky News.

(Editing by Andrew Heavens)

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