Government faces a perfect storm over energy bills

Soaring prices, the Archbishop’s censure... and now a new demand to guarantee profits

What was supposed to be a week dominated by good economic news has begun with the row over energy bills deepening still further, as new figures showed gas and electricity prices have gone up by 152 per cent in 10 years – even before the latest hikes.

Ministers had looked forward to an announcement today that they had clinched a deal to build two nuclear power stations in the UK – the first in 20 years – and figures later in the week showing increased output.

Instead, an analysis by researchers at the TUC published today shows that even before these rises were announced, gas and electricity had gone up at four times the rate of inflation – threatening to ruin the Government’s hopes of persuading the public  that they have the economy under control.

Deputy Prime Minister Nick Clegg was on the defensive yesterday as he faced questions about British Gas’s announcement that it is following Scottish and Southern Energy by imposing price hikes that will push up the average domestic fuel bill by 9.2 per cent from next month – well above the rate of inflation.

Mr Clegg implied that the Government can do nothing to stop the Big Six energy companies pushing up prices, but expressed his exasperation that they did not make a better  job of telling the public why they are doing it.

“Clearly the companies need to justify the bill increases that they are now announcing,” the Liberal Democrat leader told Sky News yesterday.

“It cannot be right that people who are really struggling – many, many people still struggling to pay their weekly, their monthly bills, where electricity and gas bills for this winter are a looming worry – it can’t be right that those bills are increased for those households in our country and yet it is all rather opaque about what drives these increases.”

His remarks followed a plea from the Archbishop of Canterbury to the energy companies to “behave with generosity” rather than use their market dominance to reap maximum profit.

Justin Welby, who was an oil executive before he was ordained as a priest, warned that the latest rises  will have a “really severe” impact on people living on low incomes, and urged the energy companies to be “conscious of their social obligations”.

“They have control because they sell something everyone has to buy. We have no choice about buying it,” he told the Mail on Sunday. “With that amount of power comes huge responsibility to serve society.”

The debate over energy policy will take a new turn today when the Government reveals details of an agreement with the French nuclear giant EDF and with two Chinese firms to build two new nuclear power stations at Hinckley Point.

EDF has made it clear that it is not prepared to invest unless the Government guarantees it a minimum price for energy once the power stations are built. An agreement to set a minimum price will – even though its effect will not be felt until the 2020s – will make it harder for Tory and Lib Dem MPs to attack Ed Miliband for promising that an incoming Labour government would freeze the price of energy for consumers.

They have attacked the policy as a “con” and a 1970s-style interference  in the free market. Instead, some  Tory MPs are pushing for an end to green taxes in order to bring prices down. But in a speech today, the TUC’s  General Secretary, Frances O’Grady, will say: “Caught on the back foot  by Ed Miliband’s pledge to freeze energy bills, some MPs are now trying to twist this cost of living issue into one that fits their anti-green agenda.

“Consumers want action from politicians to tackle the excess profits and undeserved bonuses of the Big Six energy companies.”

And yesterday, Maurice Saatchi, the advertising guru who helped Margaret Thatcher to her election victory in 1979, warned that attacking Ed Miliband as a “1970s socialist” is not necessarily a vote winner.

Writing in the Mail on Sunday, he warned that because of the rise in energy prices and the “huge imbalance of power” between the individual customer and the giant energy companies “people may conclude they need someone to protect them from that kind of ‘free market’, such as, perhaps, the state”.

VIDEO
Have you tried new the Independent Digital Edition iPad app?
News
weird news... and film it, obviously
Arts & Entertainment
tv
News
Matthew Mcnulty and Jessica Brown Findlay in 'Jamaica Inn'
mediaHundreds complain over dialogue levels in period drama
News
peopleJay Z and Beyoncé to buy £5.5m London townhouse
Voices
voicesMoyes' tragedy is one the Deputy PM understands all too well, says Matthew Norman
Arts & Entertainment
Rocker of ages: Chuck Berry
musicWhy do musicians play into old age?
Arts & Entertainment
With Jo Joyner in 'Trying Again'
tvHe talks to Alice Jones on swapping politics for pillow talk
News
Jilly's jewels: gardener Alan Titchmarsh
peopleCountry Life magazine's list of 'gallant' public figures throws light on what it means to be a gentleman in the modern world
Sport
John Terry goes down injured in the 70th minute
sportAtletico Madrid 0 Chelsea 0: Blues can finish the job at Stamford Bridge, but injuries to Terry and Cech are a concern for Mourinho
Student
student
News
<b>Rebecca Adlington</b>
<br />This, the first British swimmer to win two
Olympic gold medals in 100 years, is the eversmiling
face of the athletes who will, we're
confident, make us all proud at London 2012
peopleRebecca Adlington on 'nose surgery'
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Clinical Negligence

Very Competitive: Austen Lloyd: Clinical Negligence - Oxford An opportunity f...

Projects Financial Analyst - Global Technology firm

£55000 - £62000 per annum + outstanding benefits and bonus: Pro-Recruitment Gr...

Reception Teacher

£120 per day: Randstad Education Luton: Reception teacher required for an Outs...

Commercial B2B Pricing Specialist - Global Bids and Tenders

£35000 - £45000 per annum + excellent company benefits : Pro-Recruitment Group...

Day In a Page

Brits who migrate to Costa del Sol more unhappy than those who stay at home

It's not always fun in the sun: Moving abroad does not guarantee happiness

Brits who migrate to Costa del Sol more unhappy than those who stay at home
Migrants in Britain a decade on: They came, they worked, they stayed in Lincolnshire

Migrants in Britain a decade on

They came, they worked, they stayed in Lincolnshire
Chris Addison on swapping politics for pillow talk

Chris Addison on swapping politics for pillow talk

The 'Thick of It' favourite thinks the romcom is an 'awful genre'. So why is he happy with a starring role in Sky Living's new Lake District-set series 'Trying Again'?
Why musicians play into their old age

Why musicians play into their old age

Nick Hasted looks at how they are driven by a burning desire to keep on entertaining fans despite risking ridicule
How can you tell a gentleman?

How can you tell a gentleman?

A list of public figures with gallant attributes by Country Life magazine throws a fascinating light on what it means to be a gentleman in the modern world
Pet a porter: posh pet pampering

Pet a porter: posh pet pampering

The duo behind Asos and Achica have launched a new venture offering haute couture to help make furry companions fashionable
A History of the First World War in 100 moments: The mutiny that sent a ripple of fear through the Empire

A History of the First World War in 100 moments

The mutiny that sent a ripple of fear through the Empire
Hot stuff: 10 best kettles

Hot stuff: 10 best kettles

Celebrate St George’s Day with a nice cup of tea. Now you just need to get the water boiled
Sam Wallace: Why Giggs is perfect fit as Manchester United boss... in the longer term

Sam Wallace

Why Ryan Giggs is perfect fit as Manchester United boss... in the longer term
Renaud Lavillenie: The sky's the limit for this pole vaulter's ambitions

Renaud Lavillenie: The sky's the limit for this pole vaulter's ambitions

Having smashed Sergei Bubka's 21-year-old record, the French phenomenon tells Simon Turnbull he can go higher
Through the screen: British Pathé opens its archives

Through the screen

British Pathé opens its archives
The man behind the papier mâché mask

Frank Sidebottom

The man behind the papier mâché mask
Chris Marker: Mystic film-maker with a Midas touch

Mystic film-maker with a Midas touch

Chris Marker retrospective is a revelation
Boston runs again: Thousands take to the streets for marathon as city honours dead and injured of last year's bombing

Boston runs again

Thousands of runners take to the streets as city honours dead of last year
40 years of fostering and still holding the babies (and with no plans to retire)

40 years of fostering and holding the babies

In their seventies and still working as specialist foster parents