Tag Archives: energy prices

Davey: A cosy meeting with energy companies isn’t enough

 

Ed Davey has warned that tomorrow’s meeting between government ministers and energy companies risks becoming “a pointless talking shop” unless a tougher windfall tax is confirmed.

He demanded that the Business Secretary and Chancellor impose a tougher windfall tax on energy companies to fund the scrapping of October’s energy price rise. He wants the rate raised from 25% to 30% and its scope increased to include profits since October 2021.

He thinks this could raise around £20 billion, four times more than the government’s weaker levy is currently expected to generate.

Ed said:

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Lib Dems comment on dire economic news – but we need to say more

This week has had more than its fair share of dire economic news. The prospect of a deep, prolonged recession at a time of soaring prices means that people on the lowest incomes are really going to suffer. Let’s think about what that looks like. It means that people on the lowest incomes will simply not be able to afford the basics that they need to survive. If they don’t face the prospect of losing their home, heating it to an adequate level will be a challenge.  Putting food on the table will be tough.  Even if they just manage to get by, an unexpected car repair bill, or a washing machine breakdown, could be problems that they can’t cope with. It is quite likely that we will see levels of poverty and suffering that we thought were gone for good.

It’s the most terrifying economic landscape since 2008. And with recession comes the prospect of people losing their jobs. We didn’t have energy and living costs on a steep upward curve then.

I remember only too well the recession of the 1980s. That ITN Jobs round up every Friday showing so many jobs being lost every week. Soaring unemployment as, one by one, our key manufacturing industries crumbled.  Remember UB40’s One in Ten?

At that point though the welfare state met more of your living costs if you lost your job. You at least had some chance of getting by. And students could get help with Housing Benefit and could sign on during the long Summer holiday if they couldn’t get a job. Now, benefits are less generous, and woe betide you if you dared have more than two children since 2017 because you won’t be able to claim any Universal Credit for them.

During the 90s recession, I worked in the civil courts in England and it was heartbreaking to see the huge rise in both mortgage and rent possession cases. Each one of those meant that someone was in danger of losing their homes, and many did.

As interest rates rise, so do mortgages. Already high private sector rents are likely to increase as landlords pay more on their buy to let mortgages.

It all seemed terrible back then, but now the prospects and the pressures on incomes are even worse.

Inflation on its own is bad enough but then you have a nearly £1300 rise in energy costs from their already high level from October with the prospect of further rises every three months. If you are on a low income you are more likely to be on a prepayment meter and will find it more difficult to access help while you pay proportionately higher prices.

And all the time prices continue to rise with the Bank of England warning that inflation could hit 13%.

There is not much in the way of respite coming your way. The extra money already announced isn’t going to go very far if you are low paid.

All of this comes at a time when the Conservative Government have been cutting public services for too long. So where councils might have been able to provide much needed help in the past, they are not able to do so now. Advice agencies also need investment so that they can help people find their way through and advocate on their behalf.

Senior Liberal Democrats have been talking about the crisis. Here’s Ed Davey on the news of the energy price cap rise:

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Is the Big Squeeze set to become the Big Freeze?

Ofgem today announced the price cap will rise by £693 in England, Scotland and Wales, an increase of 54 per cent. This means bills for the average customer will rise to £1,971, up from its previous limit of £1,277.

This is just one factor in the soaring cost of living. Food prices are rapidly increasing. National Insurance is due to be hiked. Borrowers, including some mortgage holders, will feel the impact of the 0.5% hike in interest rates announced by the Bank of England today. Council taxes are due to rise in many areas, though lessened by a one off reduction of £150 to ease the burden of the surge in energy prices.

Those on pre-payment meters, who are often the most insecure in their finances and housing, will typically see their annual bills rise by £708 from £1,309 to £2,017. around £14 a week.

Even for relatively wealthier households, the loss of an average £13 a week to the energy companies will suck money out of the local economy.

The big fear is that households already skimping on heating will begin to sit in the cold affecting their health and wellbeing. The Big Squeeze could become the Big Freeze.

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Davey demands gas price investigation

Energy minister Ed Davey has written to the regulators questioning high profit margins on retail gas, and demanding an investigation: reported by the BBC, Independent and others.

It is suggested that if gas margins were similar to those for electricity, this could save the typical household £40 per year. The letter suggests that British Gas/Centrica prices and profits suggest a monopoly position.

The full text of the letter is here, and you can read more of our coverage of energy prices here.

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Energy: What Lib Dem members think about the price freeze and new nuclear power station deal

Lib Dem Voice has polled our members-only forum  to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 750 party members responded – thank you – and we’re publishing the full results.
Would you support or oppose the following policies…?

64% oppose energy price freeze

… Freezing energy prices for 20 months from May 2015, while reviewing the regulation of energy companies

    7% – Strongly Support
    16% – Support
    Total support = 23%
    34% – Oppose
    30% – Strongly Oppose
    Total oppose = 64%
    12% –

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Opinion: Don’t waver on energy policy

The recent debate on energy prices was kicked off by Ed Miliband’s declaration that a Labour government would freeze energy prices for a while. Understandably this is attractive to some who are struggling with household bills but the proposal will not in the long run benefit anyone (except perhaps the Labour party). Energy companies can only control the prices they charge to a very limited extent; they would put up their prices in anticipation of a price freeze then raise them again when the freeze is over. Labour are attempting to bribe the electorate with their own money.

It now looks …

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Ed Davey nails Labour’s energy price freeze: “Prices go up, small, independent competitors go out of business, the big six is created again. Well done, Mr Miliband!”

Here’s Lib Dem energy secretary Ed Davey highlighting one of the many flaws in Ed Miliband’s promise to freeze energy prices in today’s Guardian interview:

ed davey energy prices

(Hat-tip: John Rentoul in The Independent: Quotation of the Day.)

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Ed Davey writes… Keeping down household energy bills

House of Commons at NightYesterday, I outlined why Labour’s energy policies would be bad for consumers, bad for tackling climate change and risk the lights going out.

However misguided Ed Miliband’s energy policies are there is no doubt that he was seeking to respond to the fact that many consumers are feeling the pinch through rising energy bills. The recent price increases by SSE and British Gas will hit consumers hard and I am afraid there will be more to come.

So what is our response?

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Energy price cap round up

It is now 6 days since Ed Miliband’s announcement that if elected, he would cap energy prices for 20 months, while undertaking a restructure of the energy market intended to bring lower prices in the long run. Some details have followed, for example that the cap would not necessarily be set at the May 2015 price, but may be set at an earlier price if energy companies appear to be hiking prices to beat the cap. This wouldn’t stop them hiking prices to build up a war chest.

George Eaton in the New Statesman called this a “brilliant trap …

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Nick Clegg’s e-mail to party members: The myth: green versus growth

Nick Clegg has been promoting his new deal with the six biggest energy companies which will mean that every consumer will receive a statement every year telling them if they’d be better off on a different tariff and how to change things. It’s part of what seems to be a strategy to debunk the idea put about by George Osborne and the Tory right that you can’t be green and have a growing economy at the same time. It makes sense that if we use our resources carefully, costs come down and that benefits everybody, business, consumer and the environment. …

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