Green taxes will not be scrapped, Liberal Democrat Business Secretary Vince Cable has said, revealing that the coalition is split over the charges, which push up household bills.
Cable admitted the Liberal Democrats and the Conservatives are in a “continuing argument” regarding the need for green taxes, adding that he believes removing them would be “short sighted and foolish”.
Government ‘should not scrap policies’
He said: “It has been a continuing argument in the Coalition. What we should not be doing is scrapping our environmental policies.
“If you are taking a long term view about shifting the British economy onto a less polluting, a less carbon-based system we have to provide those incentives. What will happen in the long term is that the cost of renewable energy will fall.”
This comes after the chief executive of SSE warned that unless an immediate review of Britain’s entire green energy strategy takes place, householders will be faced by a decade of rising gas and electricity bills.
The company yesterday announced an 8.2% rise in prices, but countered this by saying that if the government was to pay for green subsidies and other environmental taxes itself, this would fall by some £110.
Consumers advised to switch and save
The government has advised that people switch providers to make sure they are on the best deal for them, however Cable admitted he has not shopped around himself.
“It is good that the market does exist and people have that choice,” he commented. “It is a very highly concentrated set up. More competition would certainly help to drive prices down.”
It is unlikely that customers of other gas companies will escape the price hikes, with British Gas and npower both expected to increase bills over the next couple of days.
Price rises causing debate about nation’s spending
Alistair Phillips-Davis, SSE chief executive, commented: “A price rise is never a good thing to do, but if it focuses everyone on to a debate about what we as a nation should be spending money on, then in one way it will be helpful.
“We need to think about what people really want to pay for; maybe it’s time to retreat from decarbonisation and focus more on the cost of living. I think we have to have a debate about it.”
He acknowledged that the public will not like price increases of this magnitude, but added that these increases will continue as long as the current green agenda is being pursued.
Phillips-Davis added that SSE will be halting all of its investment in offshore wind and new power plants until the 2015 election due to acute political uncertainty surrounding energy since Labour promised a prize freeze should the opposition party be elected.