By Paul Homewood
British Gas announced an increase in electricity prices yesterday, which inevitably attracted the ire of hypocritical politicians, even though the rise only matched those already announced by the other big energy companies a few months ago.
Regardless of the merits of this particular increase, government policies are now directly responsible for a significant chunk of electricity bills. Yet having sat through ITV News last night, the BBC’s Today programme, and read a pathetic article in yesterday’s Telegraph by the increasingly biased Jillian Ambrose, I found no mention of that fact at all.
Thankfully, today the Telegraph’s Deputy Political Editor, Steven Swinford, puts the record straight:
Green taxes will cost households almost £150 from next year, British Gas has claimed as it blamed the Government for a huge rise in electricity bills for three million of its customers.
Britain’s biggest supplier announced that from September electricity prices will increase by 12.5 per cent, adding £76 to the typical annual bill.
The company said that the cost of green subsidies levied on bills has created “significant pressures” and suggested that it had no choice but to respond by raising prices.
However the ministers last night hit back by suggesting that the price rises are unjustified as it told the regulator to do more to safeguard vulnerable customers.
Government sources highlighted the fact that British Gas is also axing a £15 dual fuel discount currently enjoyed by 3.1 million of its customers from September.
Ministers claimed they have not ruled out imposing an energy price cap, although the measure appeared to have been abandoned after the Tories disastrous performance in the General Election.
The announcement by British Gas also added to mounting tensions in the Conservative Party over the current push for renewable energy.
Michael Gove, the Environment Secretary, has signalled that more wind farms may need to be built to power a new generation of electric cars under Government plans to ban the sale of diesel and petrol vehicles.
His plans are opposed by some Tory MPs, who accused the Government of punishing hard-working families with green taxes.
Owen Paterson, a Tory MP and former Environment Secretary, said: “It is the most regressive form of taxation since the Sherriff of Nottingham, transferring money from those who are the least well off to wealthy landowners and businesses. It’s robbing the poor to pay the rich.
“We are getting less and less competitive with countries like America, where lower energy prices mean that whole industries are coming back.
“We are going in the opposite direction. We should have a free market in technology. It would be very much mistaken to continue increasing subsidies to failed forms of renewables like wind.”
British Gas forecast that the cost of the subsidies, which are used to fund renewable sources of energy such as wind and solar, will hit £149 next year having risen by by two-thirds since 2014.
The Office for Budget responsibility, the fiscal watchdog, has forecast that environmental levies will rise from £4.6billion in 2015-16 to £13.5billion by 2022.
British Gas also said that the cost of delivering energy to people’s homes will have increased by £25, equivalent to almost a fifth, by 2018. One senior Tory claimed that transmission costs have increased partly because wind farms and other renewable energy sources are located so far from where people live.
Ian Conn, the chief executive of British Gas’s parent company Centrica, said: “We have seen our wholesale costs fall by about £36 on the typical bill since the beginning of 2014 and that is not the driver. It is transmission and distribution of electricity to the home and government policy costs that are driving our price increase.”
A spokesperson for the Department for Business, Energy and Industrial Strategy (BEIS) said: “We don’t recognise these figures put out by British Gas. A number of independent reports have shown energy policy costs make up a relatively small proportion of household energy bills.
“The Business and Energy Secretary has written to Ofgem asking what action the regulator intends to take to safeguard customers on the poorest value tariffs and the future of the standard variable tariff. We want to see rapid progress on this commitment and are ruling nothing out.”
Yet the BEIS are still in denial!
“We don’t recognise these figures put out by British Gas”
Does this mean they don’t believe the OBR either?
Let’s break the numbers down then for them.
- Cost of environmental levies next year – £10.7bn
- 36% of electricity goes to domestic users
- There are about 26 million households
- Therefore green subsidies will account for £148pa on domestic electricity bills next year.
And this does not account for all of the extra costs that will be imposed as a result of government policy.
The roll out of smart meters will cost about £11bn. Spread over five years, this will add another £84 a year for each household.
Billions are also being spent on upgrading transmission lines and infrastructure, to cater for remote wind farms, which British Gas estimates will amount to £25 per household. This would imply an annual cost of around £2bn, assuming domestic users only pay their share.
In the fake story written by Jillian Ambrose yesterday, she reported:
A Government spokesman said it was concerned that the price rise would hit many people already on poor-value tariffs.
“Government policy costs make up a relatively small proportion of household energy bills. Wholesale prices are the bigger portion of household bills and are coming down,” the spokesman said.
When will this ridiculous woman actually check the facts, instead of just repeating propaganda from the government and her friends in the renewable lobby?
If she did, she would know that wholesale prices have actually risen by 6% in the last 12 months.
Politicians across the board have, of course, rushed to condemn the wicked capitalists at British Gas, in order to deflect attention from their part in the saga.
Such bare faced hypocrisy ignores the fact that British Gas have not increased prices for gas, despite higher wholesale prices this year.
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August 2, 2017 at 05:54AM
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