Davey: Stop short-termist meddling in the energy markets

The FT reports comments by Lib Dem energy secretary Ed Davey aimed in part at George Osborne over recent interventions by the chancellor into the energy market:

George Osborne has been accused by a cabinet colleague of damaging the energy sector after the chancellor threatened “action” against companies which failed to pass on falling oil prices to consumers.

Ed Davey, the Lib Dem energy secretary, said he did not know exactly what Mr Osborne was proposing and that such criticism of energy companies by politicians would “damage markets, investment and our economy”.

In an interview with the Financial Times Mr Davey said that competition was the key to driving down energy prices and that the Competition and Markets Authority was already holding an inquiry to tackle any remaining problems in the energy market.

Eon became the first big energy company in the UK to cut fuel tariffs in response to falling global oil prices, announcing an immediate 3.5 per cent reduction in its standard gas price.

However, it is clear from the fuller quote of Davey’s remarks that he has Ed Miliband in his sights, too — Voice readers will recall that he has been scathing about Labour’s proposals on this site before. Here’s what he told the FT:

“I think British business, British industry and British investors would like politicians to think more strategically and think about the longer term,” he said. “And if they interfere and meddle for short-term headlines, that is only going to damage markets and investment and our economy.”

Indeed given the dramatic falls in wholesale prices seen recently, which are now beginning to feed through to household prices, Labour’s “price freeze” looks more foolish by the day, as Iain Martin points out:

* Nick Thornsby is a day editor at Lib Dem Voice.

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12 Comments

  • Another piece telling us that when Lib Dem Ministers appear to be attacking the Tories then they’re really attacking Labour. You can’t have you cake and eat it, tell us which party you’d rather be in coalition with so we can vote accordingly!

  • @g

    I’ll let you into a little secret – we’d prefer to be in government by ourselves.

    Our second preference would be to enter into coalition with whichever of the two parties has a reasonable set of intelligent and costed policies designed to best serve the nation. In case you haven’t noticed that’s a really tough one to determine…

  • Eddie Sammon 15th Jan '15 - 12:13pm

    I didn’t see anything wrong with Osborne’s comment, but Ed Davey is usually quite in favour of market intervention, so he must be worried about keeping the lights on, which is no bad thing to be worried about.

    Regards.

  • “In an interview with the Financial Times Mr Davey said that competition was the key to driving down energy prices…”

    VAT on fuel prices seldom gets mentioned. Maybe the real key to driving down energy prices is a mass movement away from the National Grid, private company profits and VAT?

    If, for example, people went “off grid” generating their own electricity from solar panels that are not connected the National Grid aa would their energy bills be driven down?

    If they backed up their solar panels with a wood burning stove and sensible insulation of their home how much would they save by not having to pay for power company profits and the Government’s rake off in VAT???

    Just a thought. 🙂

  • Martin Land, the chances of the Lib Dems forming a majority government are practically zero. The chances of the Lib Dems participating in a coalition are quite high. The voter has a right to know what the preferred choice of the party would be, a coalition with Labour, or a coalition with the Tories?

    Chances are I will be voting in a constituency in May with a Tory MP, and the Lib Dems in second place, with Labour or any other party have no chance. Now, given my antipathy to how the Lib Dems have behaved post 2010 and being a natural anti-Tory I would greatly benefit from knowing this so as to vote tactically, or in protest.

  • The reality is that the onset of shale gas and oil , combined with extensive exploration and production outside of OPEC areas, extensive storage using ships and reduction in consumption by China means that oil and gas prices have become very volatile. Also many companies have bought oil and gas in 2 year options. Saudi Arabia appears to be using low oil prices to punish Iran and her supporters , mainly Russia.Consequently, I doubt many people know what will happen with hydrocarbon prices over the next 5 years , so any planning must be very flexible.

    If subsidies go to wind farms while other countries benefit from low petroleum and coal prices , then this will adversely impact on British consumers and businesses due to higher energy costs.

  • The Oil companies are dipping their prices to try and get people dependent on oil again, thereby undermining the slowly raising investment in alternative forms of energy.

  • From an advertisement for a UK Energy supplier —
    “….We support a growing community of over 66,000 generators across Britain. They’re all harnessing natural power from either the wind, water and sun or through sustainable biogeneration.  
    Good Energy pioneered incentives for renewable energy generators almost a decade ago ….”

    Perhaps Liberal Democrats should all just switch to Good Energy — it seems to be more effective than the government.

  • Joe Donnelly 16th Jan '15 - 3:06pm

    @Liberal Al

    Yup falling Oil Prices are all part of a vast global big oil conspiracy to put themselves out of business…

  • Simon McGrath 16th Jan '15 - 3:19pm

    @John Tilley “If, for example, people went “off grid” generating their own electricity from solar panels that are not connected the National Grid aa would their energy bills be driven down?”
    Given that solar power even on a large scale is twice the cost conventional electricity their costs would go up, now down.

    @Simon Olivier “Onshore wind farms don’t need subsidies”
    Onshore wind is more expensive than conventional electricity which is why it needs subsidies
    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223940/DECC_Electricity_Generation_Costs_for_publication_-_24_07_13.pdf
    Page 18

    Given that their

  • Simon McGrath 16th Jan '15 - 3:22pm

    Given that Good Energy is a privately owned firm I am a bit surprised to see John Tilley who doesnt want to pay towards “power company profits” recommending them..

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