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

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.