Government under fire for being soft on Big Six green levy windfall
Personal Finance Editor
Tuesday 22 July 2014
The Government walked into a row today after it “invited” Britain’s Big Six energy companies to hand customers a windfall they’ve pocketed through a deal made last December over official green levies.
"That’s not good enough," stormed Labour MP John Robertson, who demanded that energy firms repay the cash.
“I believe the energy companies have been conning us for years: raising prices while their profits soar,” said Mr Robertson, who sits on the energy select committee. “They insist this isn’t true, so I challenge them to prove it. Their costs have gone down, so now their prices should as well.”
The gas and electricity suppliers have already been forced to hand back £50 to customers through lower bills under the terms of the deal, but could now hand back an estimated further £23 per customer.
The Government admitted today that companies that signed up for the Energy Company Obligation “are likely now to be in a position to make greater savings than they had originally projected in December”.
The obligation required suppliers to insulate homes and collect levies from households to fund the programme. But December’s deal reduced the number of homes that companies had to insulate saving them millions.
But rather than forcing firms now to play fair with hard-up customers, the government has pussy-footed around the issue.
It said in a consultation document published today it “would expect the energy suppliers to ensure that consumers benefit from this further reduction… and invite them to set out publicly how they propose to do this.”
The £23-a-customer saving was estimated by the Insulated Render and Cladding Association. Andrew Warren, director of the Association for the Conservation of Energy, said: “Even though it concedes that the Big Six are receiving a further windfall this year directly as a result of the over-generous proposals, the Department for Energy and Climate Change has no intention of trying to claw back any of these windfall profits.
“Instead they are simply ‘inviting’ them to make philanthropic gestures. Yet again, the end score is: big energy companies, six: rest of the world, nil.”
Mr Robertson added: “Nobody trusts the energy barons. Here is a chance for them to regain some of that trust, by doing the right thing.”
A DECC spokesperson said: “The major energy suppliers have publicly committed to reduce customer bills by around £30-35, in line with the agreement reached last December. An additional 600,000 homes will benefit from warmer homes as a direct result of changes to ECO. We expect companies to continue passing onto consumers no more than the actual costs of the scheme; and we are challenging them to set out publicly how they propose to do this."
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