Reports say Government wants Big Six to freeze energy prices
There's speculation the Government wants no more price rises until after the next General Election, and is to press ahead with 'rolling back' green levies.
There are reports that the Government wants the ‘Big Six’ energy companies to hold energy prices until mid-2015, according to industry sources. However, this commitment can apparently be waived if wholesale prices rise.
The BBC has reported that sources claim the Government wants to avoid any more price rises being blamed on its green policies.
Mid-2015, of course, will be the time of the next General Election. So if the energy companies were to agree there could potentially be no energy price rises from now until after the election.
If this were to happen, it would be a major challenge to Labour’s pledge to freeze energy prices for 20 months if it is elected.
Cost-cutting?
In the lead-up to the Autumn Statement, which will be delivered by Chancellor George Osborne next Thursday, there has been plenty of speculation about changes to energy costs.
With the Prime Minister having already promised to look at ‘green’ charges, the Government looks certain to announce some shift in policy.
The Energy Company Obligation (ECO) scheme was one of the major ‘green’ costs cited by the five of the Big Six companies who have already announced price increases this winter.
ECO obligates the major companies to install free energy efficiency improvements, such as insulation, in poorly-insulated low-income homes. The cost of this is passed on to us via our energy bills.
The Government could allow the big energy companies extra time to carry out this work.
By extending the deadline for the scheme from 27 months to four years, the Government would want that cost to be smoothed out for longer on our bills too.
Other options
Another option is for ECO and the Warm Home discount, which offers a discount on low-income households’ electricity bill, to be paid for via taxation. Or the cost could be passed onto the power generation companies, which are also making huge profits.
Removing the cost of both ECO and Warm Home from our bills could reduce them by an average of £58 a year, according to Government figures.
However, that would still leave an average of £53-worth of ‘green’ costs.
Yet that £58 reduction, coupled with a price freeze until 2015 (albeit with a fairly huge caveat), would give the Government a populist message on a huge issue.
Npower has already pledged to scale back its winter price rise, which was the largest of those announced so far, if the Government does reduce those costs.
We shall see what’s announced on Thursday.
See if you can save money on your bills by switching energy supplier with lovemoney.com.
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The energy companies are just screwing us. They buy the electricity and gas in advance but immediately there is a price rise when the whole sale price is going up. It's very unlikely that when the whole sale price goes up that you would be paying less to your supplier so the additional price is just to make more profit. I can understand that there has to be a profit to satisfy the share holders, but it seems to be quite ridiculous when it comes to the energy giant's profits. There is no justification for nearly 10% increase. But they are privately owned so what can you do, by Thatcher's privatising boom, it was done well for the already billionaire investors. There would be a way to push the price's down if a whole neighbourhood would pull together (this would have to be hundreds of households) the price you could negotiate would be a lot less then by an individual household. Then imagine if a whole town would somehow manage to do this.
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Centrum46 & hopefultom. Well said. I'm younger than you both but I share your sentiments. Human & moral decency is fast evaporating into a mere whisper of a mist as the few, ravenous corporate hyenas with their insatiable appetites suck the very life's blood from the hard working many. They are happy to watch pensioners queue at food banks & go home to a freezing dwelling place while they fill their overstuffed pockets with the booty derived from these poor soul's years of hard labour. They deserve to be thrown into a cell on death row. This is fast becoming a criminal society where these reprobates are manageing to operate behind a very thin veil of legality. But wrong is still wrong & a crime is still a crime.
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@centrum46 If your nom de plume refers to your DOB, then you are the same age as myself and I certainly share your reminiscences, particularly regarding respect and looking out for the more vulnerable of our brethren. There are two sayings that come to mind when I think of Thatcher's legacy. The first is " Greed is good " ( with acknowledgment to " Wall Street " ) The second is " Devil take the hindmost " I don't know about you, but I am glad to be the age that I am; I would hate to be growing up in Cameron's Britain and I feel sorry for my grandchildren, that we did not do better for them. Like yourself, I am non political these days. I used to be an active member of the Labour Party many years ago; that was before they became NEW Labour and took us to war ( again ! ) Just thinking about the 400+ dead and hundreds maimed for nothing, makes me weep. Time to shut up & sign off.
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29 November 2013