Labour attacks bonuses for energy officials as bills soar

Civil servants at the Department for Energy and Climate Change pocketed more than £1m last year
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Civil servants at the Department for Energy and Climate Change received more than £1m in taxpayer-funded bonuses last year, at the same time as bills for consumers soared by an average of £100 a year, it emerged yesterday.

Six mandarins received bonuses of more than £10,000, and a further 123 were awarded more than £1,420, official figures show. The total payout was £1,098,883 in the year 2012/13, when the average dual-fuel energy bill for customers of the big six companies rose by £103.

The news comes as the chief executive of one of those six behemoths, EDF Energy, admitted in an email to staff that the industry faces "a crisis of trust" and a perception that the companies "earn excessive profits".

Labour immediately seized on the figures, asking why civil servants were being rewarded for failing to get the best deal for hard-pressed consumers.

Ed Miliband pledged at the Labour conference that a Labour government would freeze energy bills for nearly two years to help people with the rising cost of living – a move, the coalition government has warned, that would push up demand and cause the "lights to go out".

While it is not unusual for bonuses to be given out in Whitehall, Labour has questioned whether rewarding civil servants overseeing the soaring energy market was justified. Earlier this year, it emerged that the Treasury and Department for Business, Innovation and Skills paid out more than £1.5m in bonuses to its staff last year, even as the economy remained flat.

Caroline Flint, Labour's energy spokesperson, who was given the bonus figures in a parliamentary written answer, said: "The energy market isn't working for ordinary families and businesses.

"So hard-pressed consumers will be astonished that not only has David Cameron failed to stand up for them and reform our broken energy market, but he and his out-of-touch government are happy to reward this failure with bonuses worth more than £1m. While everyone is struggling with soaring energy bills, [he] only stands up for a privileged few.

"If the Government really want to help people with the cost of living crisis, they should back Labour's plans to freeze people's bills for 20 months and create a fairer energy market for the future – not waste £1m on bonuses."

As well as freezing prices for 20 months, a Labour government would force the break-up of energy companies into those who generate and those who sell to consumers. Companies would also be compelled to sell energy into an open pool and to introduce a new simplified tariff structure. Labour claims a typical household would save £120 a year during the price freeze.

Mr Miliband has also promised to abolish Ofgem, accusing the energy regulator of failing to stand up for consumers. A new "tough" watchdog would be created in January 2017, when the planned 20-month price freeze would come to an end.

Following the Labour leader's announcement last month, major firms reacted angrily, with Centrica, the parent company of British Gas, warning that it would be a "recipe for economic ruin", with gas and electricity shortages harking back to the 1970s.

However, in an email obtained by The Independent on Sunday and sent to staff late on Friday, EDF Energy's boss, Vincent de Rivaz, admitted that the industry has "to accept" that it faces "a period of unparalleled scrutiny".

He said: "Trust in the industry as a whole has declined. We know we are trying to do the right things. But the perception persists that we offer poor service, overcharge our customers and earn excessive profits.

"We know, too, that with 18 months to go to the next election, the debate about the cost of living and the difficulties facing families and businesses all over the UK is becoming more and more heated … The key job for us is to rebuild trust."

Mr de Rivaz outlined a simplification of its British business whereby EDF will be separated into two divisions. One will be for customers and focus on "being more competitive" for bill-payers. The other will be a generation business that brings together EDF's diverse portfolio of nuclear, coal, gas and renewable energy.