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Lilley Joins Major In Raising Fuel Poverty Concerns

George Parker, Financial Times

Another Tory grandee on Wednesday followed Sir John Major, former Conservative prime minister, in urging David Cameron to get tough with the big energy companies.

Sir John Major piled pressure on Mr Cameron to act against the “big six” energy companies on Tuesday, suggesting they should be hit with a windfall tax.

Peter Lilley, former social security secretary, said both Sir John and Labour leader Ed Miliband, who is proposing a temporary price freeze, were right to address the issue.

”They are both sensibly trying to propose something that will help people with their energy bills, because that’s what matters most to people the lower down the income tree you go and the further north in the country you go,’’ he told the BBC Radio 4’s Today programme.

Mr Lilley rejected the idea of a windfall tax, which he said would simply add to the cost of energy, but he suggested that the government should be prepared to hand greater powers to the industry regulator, Ofgem.

If an inquiry by the Commons Energy and Climate Change Committee – of which he is a member – finds prices are going up because of the monopoly power of the companies, the government should step in to strengthen the regulatory system, said Mr Lilley.

“If profits are made through greater efficiency and greater investment, fair enough. Conservatives are in favour of them,’’ he said.

“If they are made through monopoly power and they are putting up prices more than is justified by increased investment and increased costs, then we want more competition and tougher regulation to get those prices down.”

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