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Ed Davey: Government powerless to stop price rises

Energy secretary admits that some rises are ‘impossible to avoid’

Ed Davey

Ed Davey: Government can’t stop energy bills rising

Energy secretary Ed Davey has claimed that the government can do very little to stop energy prices rising across the UK, as he warned that the potential is there for bills to rise further for UK consumers.

The minister said the government was accepting of the fact there would be price increases due to some factors it simply cannot work around, adding that there are rises that are “impossible to avoid”.

It comes just a week after SSE became the first of the big six energy companies to announce that it would be bumping up its prices this winter.

The firm’s customers will be facing bills 8.2% higher than current charges from November, it said.

Rising gas prices causing bill hikes

Mr Davey said the rise in wholesale gas prices was one of the biggest factors in customers facing higher bills. He said this makes up a large part of what households are charged, which means when they go up, bills are not far behind.

“The gas price has gone up by 50% over the last five years and over 50% of the bill is wholesale gas price. We have also seen a big increase in the network costs because we have got to replace ageing network. These are costs which are impossible to avoid,” he explained.

However, he also became the latest politician to defend the subsidies on offer in the energy market at current, despite these having received criticism recently.

SSE’s director of retail economics Richard Westoby said last week that the so-called ‘green taxes’ were one of the main reasons the company had been forced to increase what it charges.

But Mr Davey followed in the footsteps of business secretary Vince Cable by saying that the scrapping of these subsidies is not the answer.

“Most of them are actually social policies to help the fuel-poor manage their bills. I don’t think we want to get rid of those,” he said.

“Moreover we need to help people who aren’t necessarily fuel-poor but want to do energy efficiency measures to reduce their bills. It would be silly to get rid of that aspect. If you actually look at the part of the so-called green taxes which is funding renewable energy/low carbon energies it’s only 4% of the bill.”

UK ‘on the verge of investment’

Mr Davey did say, however, that the UK could soon be seeing largescale investment from the Far East after he returned from a ten-day visit to the region.

“The Chinese, along with the Koreans and the Japanese and other countries, are very interested in the opportunity in Britain’s nuclear sector,” he said.

“I think it is really possible that we will see massive Chinese investment, not just in nuclear but across the board. And I think we will see massive Japanese investment and Korean investment.”

He said there was a wave of interest, and insisted the UK could be very close to seeing tens of billions of pounds invested into the UK energy sector.

Learn more

SSE blames 8% increase on rising costs 

Cameron defends energy subsidies

  • pauljames38

    He could remove the so called green taxes for a start as well as not scrapping viable coal generators as dictated by the unwanted EU!

  • Believer

    The old story – when in opposition it is the governments fault when in power it is everybody else. We will all sing along in the morning (and vote) just like before.

  • Andy_London

    Ed Davey could just admit that so-called green taxes and environmental obligations are irrelevant while the Chinese build an economy based on increased carbonisation while we destroy our economy by de-carbonising.

    Or he could take all these green taxes away and replace them by increasing income tax so that energy bills are then based on the ability to pay, which would benefit the poorest on fixed incomes i.e. pensioners.

    • Stew

      More is added to our electricity bills to pay for pensioner reductions than is paid in feed -in- tariff’s for renewable energy production!

  • Liz Smith

    Thought Ed Davey would say as he was a member of the cabinet he could not get involved like he did when we wrote asking him to help sort out the flying tax that the government had put on all flights. Whenever you ask him a question with ONE answer you usually get a dozen pages of drivel. Glad I didn’t elect him in!

  • Malc

    Tens of billions invested in UK – frightening isn’t it think of the returns they will demand

  • Tamsin Mc Cormick

    Crap – Even if you save energy they will just compensate by putting the unit price up .
    Robbers !!