Ed Davey: Cancel energy price rise to avoid a social catastrophe

Here’s Ed Davey on yesterday’s Good Morning Britain  talking about his radical call for the Government to cancel the energy price cap rise planned for October, paying for it by a windfall tax on energy companies and increased VAT receipts.

Ed said

“I think we could be heading for a social catastrophe with millions of pensioners and families going cold and hungry this Winter. i think it is a social crisis like we have not seen in our lifetimes and the Government has to act.”

He likened it to the sort of help the Government rightly gave during the pandemic.

He also called for Parliament to be recalled to implement the necessary legislation (which, handily, we’ve drafted for the Government).

The proposed ‘Energy Price Cap Increase (Cancellation) Bill’ would instruct Ofgem to maintain the price cap at existing rates, saving the typical household an average of £1,400 this year. It would also require the government to produce a report into extending and backdating the Windfall Tax on record oil and gas profits to raise additional funding to help cover the costs.

Ed said:

“People are worried sick about the next staggering rise in energy bills which is just round the corner.

“Yet we are faced with a deafening silence from the Prime Minister and Chancellor, while both Conservative leadership candidates have failed to come up with a bold plan to solve this crisis.

“The Liberal Democrats have prepared legislation that is ready and waiting to implement our plans to scrap the energy price rise. Parliament must be recalled now so we can pass this law as soon as possible.

“Every day that goes past without any answers from this Conservative government creates more angst amongst those worried about how they will pay the bills this winter. We need to reassure families and pensioners now by introducing measures to protect them from this social and economic catastrophe.”

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7 Comments

  • Katharine Pindar 10th Aug '22 - 9:24am

    Ed is absolutely right, and it’s good news that we are demanding the recall of Parliament and already have some draft legislation ready. Having heard Martin Lewis being passionate about the threat to families of the approaching catastrophic rise in the price of energy, most recently on the Today Programme in the last couple of hours, I suggest that Ed and Christine Jardine get together with Lewis now to get him on board for Ed’s plan.

  • Neil James Sandison 10th Aug '22 - 10:19am

    good start to deal with crisis but we now need to also put pressure on to move away from gas and use alternatives like hydrogen and other organic wastes . The fifth fuel energy saving also needs a boost . a strong suite of alternatives including wind and solar can be delivered with local authority support but like Covid and food shortages in the war years a national strategy for short ,medium and long term outcomes for energy is required.

  • It is beyond appalling that this government is sat twiddling its thumbs whilst millions of our fellow citizens slip into poverty and despair.
    Could it be that the Tories are so in hoc to the big power companies that they will do nothing except mouth fine words? Look at the evidence. When the government could have stopped the price hike they have done nothing. When they could have introduced a windfall tax earlier they didn’t allowing greedy (privately owned) power companies to rake in even more profit and continue to pay obscene bonuses and dividends.
    Surely the time has come to end the privatisation of power and water companies.
    Ed is right to call for the scrapping of the price hike. It’s a start, but as long as the power companies remain ion private hands this will be a drop in the ocean.

  • I am really pleased that Ed Davey is calling for the energy price cap to be frozen in October. I suggest this on Saturday – https://www.libdemvoice.org/lib-dems-comment-on-dire-economic-news-but-we-need-to-say-more-71155.html. It also will need to be frozen in January.

    It is forecast that the energy price cap will increase by £1611 in October 2022 to £3582 for those who pay via direct debit. With 22 million households this would remove about £35.4 billion from real terms aggregate demand (in the region of 1.8% of GDP). £3582 is 89.13% of the single person aged over 24 rate of Universal Credit.

    It is forecast that the energy price cap will increase by £684 in January 2023 to £4266 for those who pay via direct debit. £4266 is more than the amount a single person aged over 24 receives on Universal Credit over a whole year (£4018.92).

  • Jason Connor 10th Aug '22 - 4:03pm

    I agree sign Martin Lewis up to the Lib Dems and bring the utility companies back into the public sector. Protect everyone who is struggling from these huge energy price hikes.

  • I share other posters concern over the level of bills that households will face this winter, but I don’t quite see what people, including Ed, are actually proposing ?
    If the market price of gas is X, and government limit the price to the public to X-Y, then utility firms will be significantly out of pocket. And many will go bankrupt. Some have already. Only way this works is if government promises to fund the shortfall, however much the market price goes up, or we nationalise the utility industry, which costs even more are won’t be good long term.
    I know that politicians are supposed to be able to cure all ills. solve all problems, but it may be that the best we can do this winter is to help the very poorest, encourage lower use (insulating every home in the UK to a high standard MUST be a priority) and just try to get through this. Anything else is just passing a huge bill to future generations, and they are in enough of a hole already. It wont be pleasant for many, but maybe we will learn some lessons and we will develop an energy strategy which is not reliant on foreign imports nor at the mercy of global oil and gas markets.

  • Nonconformistradical 19th Aug '22 - 9:16am

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