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Ditch Climate Targets Or Forget Cheaper Bills, Bosses Tell Ministers

Ministers’ obsession with green taxes is driving up energy bills, bringing financial pain to millions of families, it was claimed last night.

Business groups demanded cuts in fuel prices be given a higher priority than meeting EU targets to reduce carbon emissions.

But the Government energy summit yesterday offered no hope that struggling families and businesses will be offered lower energy bills this winter.

Both Energy Secretary Chris Huhne and British Gas managing director Phil Bentley admitted that price rises were here to stay.

The ‘big six’ energy giants have increased tariffs by 15 per cent-plus in recent weeks, raising the average annual dual fuel bill by around £175 to £1,345.

This figure is inflated by around £100 to cover a raft of green taxes and associated charges, which are set to soar in the next decade. Mr Huhne is the chief cheerleader for the charges, which are being used to fund a £200billion shift to wind, wave, solar and nuclear power.

Yesterday he insisted that prices in Britain were ‘relatively good’ compared with elsewhere in the world but admitted: ‘If you are asking me to predict what is going to happen to world fossil fuel prices then the Government’s prediction… is that in the medium-run those prices are going to go up. The companies are not the Salvation Army. We expect them to earn respectable returns for their shareholders.’

Mr Bentley added: ‘In the last two and a half years, gas prices on the international market are up by 70 per cent. I’m afraid it is an inconvenient truth that those costs have to be passed on to customers.’

Mr Huhne said customers should shop around as up to 85 per cent ‘don’t bother’ to look for a better deal.

He said: ‘This is not small beer. If you look at the figures on an average dual fuel bill of about £1,300, by switching you can get £200 off.’

But yesterday Simon Walker, the new director general of the Institute of Directors, said it was ‘simply not credible’ for the Government politely to ask energy firms to curb bills.

He warned that the current push for green energy is driving up bills, saying: ‘Current policies risk locking us into cleaner and more expensive energy, when the goal should be cleaner and cheaper energy.

‘What may have been tolerable in an age of affluence is far less realistic today. Undermining the UK’s competitiveness through high energy costs would do no favours to either economic recovery or the environment.’

Richard Lloyd, of consumer champion Which?, said: ‘There is a problem here that has got to be fixed. The market does, for consumers, feel rigged against us.’

Ann Robinson, of price comparison website uSwitch, said: ‘I would urge the Government to calculate the full cost that will be passed on to household energy bills and to then think again about the impact.’

Energy industry analyst Dr Craig Lowrey said: ‘I think the summit has come too late in the year to have any effect on bills this winter. This appears to be a cosmetic exercise at least in terms of any immediate impact.’

Daily Mail, 18 October 2011