UK Politics

Government 'not impotent' over high energy bills - Davey

Electric fire
Image caption Mr Davey said the government was seeking to "insulate" people from high costs

Energy Secretary Ed Davey has rejected claims the government is "impotent" in the face of high fuel bills.

Mr Davey told the BBC that gas and electricity costs were "too high" and the coalition "can do things and will do things" to help people pay less.

Leading suppliers have cut their prices this year but not enough to compensate for previous steep price increases.

Consumer groups said subsidies for renewable energy schemes were forcing up the cost of household bills.

Labour have accused the government of not doing enough in last week's Budget to protect people from the squeeze on living standards - including from domestic energy bills.

A recent reportfor the Department of Energy warned that fuel poverty was likely to increase sharply by 2016, with an estimated 8.5 million people unable to afford their energy bills by 2016.

Suppliers have blamed high wholesale prices for rising household bills, with most people seeing a rise in their gas bills last autumn of more than 10%.

The major suppliers have cut their prices in recent months, with the mild winter leading to lower demand for energy, but not by enough to offset the increase just a few months earlier.

'Canute-like'

Mr Davey said the government had been accused of being "impotent because of the global gas markets" and he wanted to make sure the UK was not dependent on imports from potentially unstable countries.

He said the UK could not be immune from global markets but the government could make a "major difference" by making bills more transparent, encouraging people to switch suppliers to get the possible deal and through wider structural reform of the market.

"We can't, Canute-like, push back the water," he told BBC 5Live's Breakfast.

"When oil prices go up internationally, when gas prices go up, we are hit by that."

He said the government's job was to "insulate" people as much as possible from rising prices: "One of our jobs is to get a wedge between the bills people face - because they are too high - and the cost of electricity and gas on the wholesale market.

"We can do things and we will do things."

People could save hundreds of pounds by getting onto the cheapest tariff and insulating their homes properly, he said, while support for the most vulnerable customers through the government's Warm Homes scheme had increased by 40%.

The UK, he added, needed to increase the amount of energy it produced, including from renewable sources, to help it deal with future market volatility and price shocks.

But consumer group Which said household energy bills were being forced up by the cost of government subsidies for renewable energy projects, some of which he said would never come to fruition.

"There is probably 10% of what people pay in their bill which is down to government policy," said its chief executive Richard Lloyd.

"People are paying for these policies through their bills. You have got to take a lot more notice how angry people are about that and the pace and the scale of costs consumers are having to pay."

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