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Energy subsidies debate rages on as DECC says bills will rise

Meanwhile Deputy PM backs energy subsidies because getting rid of them would increase bills in the long run

money coinsDeputy prime minister Nick Clegg has joined the energy subsidies debate, claiming that removal of them would increase prices, despite new figures showing they are set to add to bills in the next seven years.

He becomes the latest to support the energy subsidies, after prime minister David Cameron and energy secretary Ed Davey both backed them over the last few days.

DECC: Subsidies will increase bills

However, governmental support comes at the same time as a report from the Department of Energy and Climate Change (DECC) that says that subsidies will make up a greater proportion of what households pay in the next seven years.

At the moment, it said, these account for 17% of bill prices, but the report from the DECC said this is likely to have increased to 33% by the year 2020.

It is thought that this will see almost £300 added to the price customers have to pay. The cost of subsidies per household will rise from £138 in 2013 to £286 within the space of just seven years.

This sort of news has led to widescale condemnation of policies, with the Taxpayer’s Alliance’s chief executive Matthew Sinclair saying recently: “Rather than meddle in the market even more and risk the lights going out, the government should scrap useless energy policies that make it much harder for people to make ends meet.”

Clegg backs energy subsidies

In spite of this report though, deputy prime minister Nick Clegg has claimed that to get rid of subsidies would mean bills increasing in the long run.

“Like everyone else I want us to strain every sinew to keep those bills down – but I don’t think anyone should think that by scrapping all the levies that exist suddenly with one bound we are free. We won’t,” he told the Daily Telegraph.

Mr Clegg said that to get rid of these incentives would mean pushing away potential investors, leaving the UK facing rising energy bills and a much higher level of fuel poverty as it struggles to meet its obligations on renewables.

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  • Neil

    Obligations on renewables is just a government racket.