Energy secretary Ed Davey has said that gas and electricity customers are “not just cash cows” that can be “squeezed” in order to drive up profits for shareholders.
The minister called on energy companies to be more transparent when it comes to their efforts to reduce tariffs for consumers.
Minister speaks at Energy UK conference
This speech, given at the annual conference of industry organisation Energy UK, comes after it was announced that energy customers would be facing soaring energy bills.
Five of the UK’s big six energy companies have recently announced price rises for this winter. The other main supplier is expected to follow suit.
However, Energy UK warned of the dangers of a “tit-for-tat Punch and Judy show of insults” between gas and electricity companies and the government.
Energy firms have blamed the price rises on the increase of wholesale prices, as well as the coalition’s green measures.
Labour slammed government for failing to cut rising prices
In addition, Labour leader Ed Miliband has accused the government of not doing enough to keep energy costs down for struggling households. In September he said that should his party win the next election, it would implement a 20-month energy price freeze from May 2015.
In response to criticism, the government launched a competition review and is to investigate green and social charges, which are known to be responsible for some of the increase in bill size.
‘Profits cannot come at the expense of the elderly, the vulnerable, and the poorest’
In his speech, Davey contended that companies need to make enough money to enable investment in green technologies.
He said: “But those profits cannot come at the expense of the elderly, the vulnerable, and the poorest in our society. Customers are not just cash cows to be squeezed in the pursuit of a higher return for shareholders.
“Trust between those who supply energy and those who use it is breaking down.
“It is so difficult for people to work out what exactly they are paying for that they fear the big energy companies are taking them for a ride when bills go up.”
He added that when consumers look at energy companies, they see the same greed that consumed the banks ahead of the recession – regardless of whether this is a fair assessment or not.
Speaking to the energy companies, he said: “You deliver an essential public service, so your industry must serve the public – and the public must have trust in what you do.”
Davey also said that the government is looking at how it can cut the impact its policies have on the rising cost of gas and electricity.
This governmental commitment to lower prices, he said, must be matched by a commitment in industry to open their books and work out exactly how they can cut their own costs to make bills as low as possible.
Caroline Flint accused coalition of being ‘out of touch’
However, Caroline Flint, Labour’s shadow energy secretary, slammed David Cameron’s government as “out of touch” and accused them of offering nothing to millions of families struggling with energy costs.
“Ed Davey and the Lib Dems had a chance to support Labour’s energy bill freeze but have chosen instead to side with the Tories and the energy companies,” she said.
“It just goes to show you can’t trust a word they say.”