Ministers are urged to initiate an immediate review of Britain’s entire
green energy strategy or risk forcing household gas and electricity bills
up every year for the rest of the decade

Scottish and Southern Energy said annual gas and electricity prices would
fall by £110 per household overnight if the Government opted to pay for
green energy subsidies and other environmental costs, such as free loft
insulation, through the tax system Photo: ALAMY

By Steve Hawkes, Consumer Affairs Editor

The chief executive of the energy giant Scottish & Southern Energy said on
Thursday night it was time for a national debate about the country’s green
agenda after unveiling an 8.2 per cent price rise for customers.

The company said annual gas and electricity prices would fall by £110 per
household overnight if the Government opted to pay for green energy
subsidies and other environmental costs, such as free loft insulation,
through the tax system. Alistair Phillips-Davies on Thursday told The
Telegraph that green levies imposed by the Government were responsible for
a third of the increase being imposed by SSE.

On average, dual-fuel bills for millions of its customers will rise by £111
to £1,465 a year, the highest price ever seen in the country.

British Gas and Npower are both poised to increase bills in the next few days.

Mr Phillips-Davies said: “A price rise is never a good thing to do, but if
it focuses everyone on to a debate about what we as a nation should be
spending money on, then in one way it will be helpful.

“We need to think about what people really want to pay for; maybe it’s time
to retreat from decarbonisation and focus more on the cost of living. I
think we have to have a debate about it.

“Do we want to be replacing one bit of [energy] generation that we can keep
going for a bit longer with a new bit of generation that’s going to cost more?

He added: “I doubt the public like price increases of this magnitude, but
if we carry on firmly behind the green agenda we will continue to have
price increases like this.”

He added that SSE, which made a

£1.4 billion profit last year, would be stopping all investment in offshore
wind and new power plants until the 2015 election because of the acute
political uncertainty around energy since Ed Miliband promised a price
freeze if Labour wins power.

The row threatens to intensify tensions in the Coalition, with speculation
growing that the Tories want to react to the Labour leader’s pledge by
funding some green levies through tax rather than passing the cost on to
households through bills.

On Thursday, David Cameron said green levies to subsidise renewables would
not be on bills “for a moment longer than is necessary”.

But Michael Fallon, the energy minister, went further by insisting that the
Government was “looking hard” at what could be done to reduce green costs
to both industry and households. He said: “I’m as green as the next man,
but I’m a cheap green.

“We still have to deal with a legacy of underinvestment and we still have
legal obligations under climate change regulations, we need to build new
power stations, but within that, we are looking.”

Ed Davey, the Lib Dem Energy Secretary, said that wholesale energy costs
were the real reason SSE was putting up prices and that customers should
react by switching to a rival supplier.

National Grid earlier this week warned that the huge push to “go green” and
take ageing coal-based power plants out of commission meant Britain was at
a greater risk of winter blackouts this year than at any point since 2007.
Britain is signed up to producing 30 per cent of its electricity from
renewable sources by the end of 2020.

Experts believe more than £100 billion will have to be spent for the
country to have any chance of reaching the target, and all of this would
have to be recouped from household bills.

The TaxPayers’ Alliance said at the weekend that it had calculated that £22
billion of subsidies would be handed to “green” energy generators over the
coming six years to pay for new wind farms and hydro power plants, with the
entire cost passed on to consumers through bills.

The UK Independence Party joined the debate on Thursday by blaming Mr
Miliband for bringing in the Climate Change Bill in the last Labour
government.

Responding to SSE’s price rise on Thursday, Mr Miliband said it was proof
the Government was letting energy companies “get away with it”. Caroline
Flint, Labour’s shadow energy secretary, added: “When times are tough,
energy companies should be helping their customers not hitting them with
more price rises to boost their profits.”

Watchdogs said it was inevitable SSE’s rivals would follow suit with price
rises of their own. As well as British Gas, industry sources said npower
was to announce a price increase as early as Monday.

Ann Robinson, the head of the price comparison website uSwitch, said there
were now real concerns that millions of vulnerable customers would be
forced to turn down the thermostat or turn off the heating altogether over
the winter.

She said: “It’s a crippling blow. We all knew increases were coming, but
when you actually see them, well, it’s devastating.

“Last year, 70 per cent of households were rationing fuel at some point, 35
per cent turned their heating down at some point. How many more people are
going to freeze to death this winter?”

SSE said it had held off from announcing an increase as long as it could.
The new higher prices will take effect on Nov 15. The company said
government-imposed levies on energy bills to pay for everything from free
loft insulation and new wind farms, had gone up by 13 per cent in the past
year, three times more than wholesale energy costs.

Will Morris, the SSE group managing director for retail, said: “We’re sorry
to have to do this. We’ve done as much as we could to keep prices down, but
the reality is that buying wholesale energy in global markets, delivering
it to customers’ homes, and government-imposed levies collected through
bills ­ endorsed by all the major parties ­ all cost more than they did
last year.”

The SSE increase will affect seven million homes in the UK. Customers in
the South East, former Seeboard customers, will have an 9.7 per cent
increase, compared with a rise of 7 per cent in the North.

The company blamed the different transmission costs charged by regional
power networks.

In addition, about 150,000 SSE customers will be hit with a new standing
charge that could increase costs if they are low-users of energy. The
company is also scrapping prompt payment discounts and loyalty discounts.
Off-peak rates on the Economy 7 tariff will rise by 18 per cent in Scotland
as SSE restructures its unit charges.

Gillian Guy, the chief executive of Citizens Advice, added: “This price
rise will be a blow for stretched budgets. The hike comes at a time when
some working households are turning to food banks to feed their families as
they struggle to cope with the rising cost of living.

“I hope other energy firms show an understanding of their customers’
financial situation by not raising their prices.”


SAS Volunteer

We publish content from 3rd party sources for educational purposes. We operate as a not-for-profit and do not make any revenue from the website. If you have content published on this site that you feel infringes your copyright please contact: webmaster@scotlandagainstspin.org to have the appropriate credit provided or the offending article removed.

3 Comments

Leave a Reply

Avatar placeholder

Your email address will not be published. Required fields are marked *