2% limit on energy and rail fare rise

GAS, electricity and train prices (except TGV) are to be restricted to inflation-only price rises - just 2% - in a move to help the eight million people facing difficulties paying energy bills.

The moves follow Prime Minister Jean-Marc Ayrault's speech last week when he revealed the broad scope of the government's plans for the future.

Energy Minister Delphine Batho said the government was drafting a decree to regulate tariffs on household gas and electricity, to come into effect after July 20, plus Intercités and TER trains from August 1.

She said it wanted to "protect household budgets" which had seen energy costs rising by 31% over the past four years - an average of €232 for each households using gas.

So far energy giants EDF and GDF Suez have not commented but when the Sarkozy government tried to freeze energy prices last year the move was overturned by the Conseil d’Etat. Gas prices rose 4.4% on January 1.

And two weeks ago, GDF Suez applied to the energy regulator Commission de Régulation de l'Energie (CRE) for a 4.1% increase from July - and some commentators said this meant an 8.1% rise in reality.

In May inflation dropped for the third month in a row - largely due to falling energy prices - and national statistics body Insee says over the past year it has been running at 1.9%.

The changes will mean train prices on non high-speed routes rising between €0.10 and €0.90, SNCF said, adding that this would vary according to destination.

* Just after the parliamentary elections the government announced pay limits of €450,000 for the heads of state-controlled companies, such as EDF and SNCF: it means EDF boss Henri Proglio faces a cut of 85% in his pay.