Chancellor can make a real difference to energy prices
The letter lays out the steps the Chancellor could take without affecting programmes designed to alleviate fuel poverty and cut carbon emissions.
The letter first recommends that Government cut the big six energy suppliers down to size to get more competition into the energy market and reduce the cost of exorbitant energy policies.
With regards to breaking up the big six suppliers, the letter suggests Government should commit to separating energy generation from supply: “Wholesale costs are the biggest part of the eye-watering rises in energy bills that people have faced over the last ten years,” writes Which? “The wholesale market must be made more competitive to help keep prices in check.”
Which? also says energy firms should be more accountable for how they spend Energy Companies Obligation (ECO) money, suggesting that £200m a year could be saved if ECO were delivered more efficiently.
In terms of cutting the cost of government energy policies, the Which? letter states that ECO is overly focused on expensive measures. If it were to prioritise low-cost measures, it is thought that between £242m-£363m a year could be saved while still achieving carbon targets in the same number of households.
Other areas identified in the letter as ripe for savings include halting the smart meter roll out, which it describes as ‘a £12billion luxury we cannot currently afford’, and scrapping the carbon floor price and the Warm Home Discount.
“Consumers have been left reeling by the recent round of inflation busting price hikes,” writes Which? “Last week four in 10 told us they can’t reduce energy use any further as they have already cut down as much as they can. And three in 10 don’t know how they will afford to heat their homes this winter.
“And British Gas told us that their price rise meant around only £2 a week extra, but the average household is only able to save just over double that – £5.20 per week – so that £2 halves what people can put away for a rainy day."
DECC has responded to the Which? appeal, agreeing in principle with the suggestions made. DECC says:
“We welcome this contribution to the debate, and agree that stronger competition is the key to tackling energy bills. The government is working hard to help people with their rising energy bills by improving competition, making the nation’s homes cheaper to heat and providing targeted help for the most vulnerable."
The Which? campaign has its own website and is encouraging people to sign its petition to the Chancellor. It can be accesed on www.which.co.uk/campaigns/energy-prices/
