The Energy Bill should have included clauses to protect consumers

The rising cost of electricity and gas has become voters’ number one concern, yet today’s draft Energy Bill does little to address the issue.

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The rising cost of electricity and gas has become voters’ number one concern, yet today’s draft Energy Bill does little to address the issue.

energy-bills-old-womanWhile the ambition to meet CO2 targets and ensure security of supply is correct, the bill has been beset by delays which have caused a hiatus in much needed infrastructure investment.

Meanwhile, specific measures within the package are flawed and could exacerbate voters’ primary concern. For example, the Carbon Price Floor, which was first announced in the 2011 budget, will do nothing to reduce carbon emissions while piling more cost on to the shoulders of already hard-pressed consumers in the UK.

Because the market is Europe-wide, a higher price in the UK will lead to a lower price elsewhere and to the same amount of carbon being emitted. Modelling, published by IPPR last year, suggested that unilaterally introducing a floor price for carbon in Britain will undermine the economic efficiency of the EU emissions trading scheme and could waste up to £1 billion.

Instead, Britain should be pushing for an EU-wide carbon price floor delivered through a European carbon bank.

As well as ironing out the problems with the Bill’s clauses, more is needed to address voters’ concerns. The retail market is clearly not working with some suppliers failing to provide tariffs that properly reflect the true cost of energy.

For example, some households are paying £330 more than their neighbours for the same amount of energy and this difference cannot be accounted for by differences in the suppliers’ costs. Meanwhile, millions are being overcharged with the poor and elderly most at risk of being overcharged.

 


See also:

Telegraph distorts the truth on energy bills 10 May 2012

Tories mount a campaign against their own energy policy 17 Apr 2012

We need more community and co-operative ownership of energy 13 Mar 2012


 

The Energy Bill should have included clauses to protect consumers with an aim of easing the pressure on living standards caused by rising energy prices. Measures to end anti-competitive practices in the energy market, extend competition and therefore improve efficiency are all needed as these would exert downward pressure on energy prices.

By ending the continued overcharging of loyal customers through tariffs that are not properly cost reflective, the government should do more to protect the most vulnerable consumers. The focus on switching, which is only taken up by 16 per cent of consumers, appears to be failing.

There is a myth that doing the right thing on climate change is unpopular. In fact, analysis by Green Alliance shows that public perceptions are more favourable than they have been in some time.

Green behaviour such as recycling, switching off lights and green consumption is on the rise across all social classes. Meanwhile, the number of people who think climate change is a ‘very serious’ problem has begun to rise again from 43 per cent in 2010 to 49 per cent in 2011 while two-thirds of those asked believe that it poses risks to people in Britain.

Reducing climate emissions can be consistent with stemming the rise in energy bills. But the draft Energy Bill is a flawed attempt to meet these objectives and looks likely to exacerbate voters’ number one concern.

 


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