Ministers focus on energy policy

16 October 2012 Last updated at 23:48 ET

Which? executive director Richard Lloyd: "Most customers feel that this market is broken"

Senior members of the cabinet will meet later to formulate a policy for dealing with the UK's future energy demands.

David Cameron and Nick Clegg will be discussing ways to keep costs down with the chancellor, chief secretary to the Treasury and energy secretary.

The decisions will help frame the new Energy Bill expected within weeks.

Chancellor George Osborne wants a new wave of gas-fired power stations and reductions in subsidies to renewable energy sources, but Lib Dems disagree.

Mr Osborne's coalition partners are happy to see more gas power in the short term but insist that the UK should continue to support renewables, such as wind power, to ensure that people are insulated against possible future rises in gas prices.

And they argue that the UK should not waver from its legally binding climate change targets.

The chancellor says his approach would help to keep bills down.

Continue reading the main story

?Start Quote

Households facing rising energy bills this winter aren't going to be helped by more inquiries or investigations?

End Quote Department of Energy and Climate Change

The talks come just over a week after energy regulator Ofgem warned that the UK could face blackouts within a few years, unless steps were taken to secure future energy supply.

BBC environment analyst Roger Harrabin said: "The frustrated power firms, who are expected to provide billions of pounds of energy infrastructure, are pleading for a policy to be made - and kept for the long term."

Meanwhile, consumer body Which? has said the prime minister should launch an urgent, independent review into the rising cost of household energy bills.

Last week Npower and British Gas both announced that they were increasing gas and electricity prices in the UK.

The firms both blamed the government's policies as well as wholesale prices.

SSE - which trades as Scottish Hydro, Swalec and Southern Electric - also said it would raise its prices.

'Top concerns'

In a letter to Mr Cameron after the price hikes, Which? executive director Richard Lloyd said the energy market was "broken".

He said a review was needed to look at rising prices and whether competition between suppliers could be made to work more effectively to help consumers.

Mr Lloyd said that with the average bill up 13% since a government energy summit a year ago, "it is no wonder consumers tell us that energy prices are one of their top financial concerns".

Shadow energy secretary Caroline Flint said Which? was right to say that Britain's energy market was "not working in the public interest".

She called for "a complete overhaul of our energy market".

But a spokesman for the Department of Energy and Climate Change said: "Households facing rising energy bills this winter aren't going to be helped by more inquiries or investigations that could take years to complete and implement.

"We know what the problems are, we want to get on with tackling them now. We're focusing on action, not more words."

The spokesman added that reforms by the government and Ofgem, including electricity market reform through the forthcoming Energy Bill and Ofgem's ongoing retail market review, offer "the quickest way to boost consumer confidence in the energy market".

Energy price changes since Nov 2010
	Scottish Power	SSE	British Gas	Npower	E.On	EDF
G=Gas. E=Electricity.
Nov 2010	G:2% E:8.9%
Dec		G:9.4%	G:7% E:7%
Jan 2011				G: 5.1% E: 5.1%
Feb					G:3% E:9%
Mar						G:6.5% E:7.5%
Aug	G:19% E:10%		G:18% E:16%
Sept		G:18% E:11%			G:18% E:11%
Oct				G:15.7% E:7.2%
Nov						G:15.4% E:4.5%
Jan 2012			E: -5%
Feb	G: -5%			G: -5%	E: -6%	G:-5%
Mar		G:-4.5%
Oct		G: 9% E:9%
Nov			G:6% E:6%	G:8.8% E:9.1%

Source: http://www.bbc.co.uk/news/uk-19973419#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

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