Energy will continue to be expensive and will still be a substantial part both of the cost of living for households and of the costs of running a small business.
However, with the news that the government is to reconfigure green taxes so as to reduce their impact, and that Energy companies will pass this reduction on to consumers, energy bills will go up by less than would otherwise have been the case.
Major energy firms have started to announce plans to pass on savings to customers following a new package of measures from the government.
British Gas owner Centrica said it would cut bills by £53 in January, two months after a £123 price rise for the average dual-fuel customer. SSE also said it would pass on savings of around £50 and Npower plans a conditional price freeze until 2015.
The moves come after the government said it would make changes to bills.
Some subsidies for those in fuel poverty will be moved into general taxation and some green policy targets will be slowed down. The government said this would cut energy bills by a total of £50 a year for the average household.
The government's policy might not sound as good as Labour's promise of a price freeze but it has this crucial difference - it will actually work.
The total insanity of Labour's policy on energy can be summed up in one quote from Labour energy spokeswoman Caroline Flint.
The difference between the parties is that where the Coalition wants to help the energy consumer, Labour wants to hurt the energy supplier. Caroline Flint attacked the governments proposals on the grounds that they contain "Not a single measure that will cost the energy companies a single penny."
I suspect that most people don't give two hoots whether a policy costs the energy companies, they want to know whether it will help them.
Britain needs billions of pounds of investment in new generating capacity, preferably as part of a mix which also includes energy saving, to replace the power plants which are reaching the end of their useful life. The only way that investors will put money into building those plants is if they can expect to make a fair profit.
In the long run taking some kind of sadistic pleasure in preventing energy companies from earning a profit will harm, not help, their customers. It is likely to lead to power cuts - which is what happened in California when that state adopted an energy policy not entirely unlike Ed Miliband's.
To paraphrase the "Ten cannots,"
You cannot help the energy customer by destroying the energy supplier.
In contrast the government's policy to help customers is paid for and sustainable.
Currently, the average dual fuel bill for households is £1,385.
Some of the saving will come in the form of a reduction in the Energy Companies Obligation (ECO), which requires energy companies to provide insulation or other energy-saving measures to 400,000 homes a year. In future, these measures will be paid for by a tax-funded programme of £500m, and will be granted via an average £1,000 stamp duty rebate for home buyers who need to improve energy efficiency at their new property.
The total £50 cut in the average household bill is made up of:
"It is right to refocus the Energy Company Obligation so that it gives greater priority to those most in need of help, with lower-cost measures such as loft and cavity wall insulation. But in return for more time to get this right, the suppliers must now commit to greater transparency and to getting their costs down, fast."
However, with the news that the government is to reconfigure green taxes so as to reduce their impact, and that Energy companies will pass this reduction on to consumers, energy bills will go up by less than would otherwise have been the case.
Major energy firms have started to announce plans to pass on savings to customers following a new package of measures from the government.
British Gas owner Centrica said it would cut bills by £53 in January, two months after a £123 price rise for the average dual-fuel customer. SSE also said it would pass on savings of around £50 and Npower plans a conditional price freeze until 2015.
The moves come after the government said it would make changes to bills.
Some subsidies for those in fuel poverty will be moved into general taxation and some green policy targets will be slowed down. The government said this would cut energy bills by a total of £50 a year for the average household.
Homebuyers could instead be granted £1,000 to spend on energy-saving measures.
The government's policy might not sound as good as Labour's promise of a price freeze but it has this crucial difference - it will actually work.
The total insanity of Labour's policy on energy can be summed up in one quote from Labour energy spokeswoman Caroline Flint.
The difference between the parties is that where the Coalition wants to help the energy consumer, Labour wants to hurt the energy supplier. Caroline Flint attacked the governments proposals on the grounds that they contain "Not a single measure that will cost the energy companies a single penny."
I suspect that most people don't give two hoots whether a policy costs the energy companies, they want to know whether it will help them.
Britain needs billions of pounds of investment in new generating capacity, preferably as part of a mix which also includes energy saving, to replace the power plants which are reaching the end of their useful life. The only way that investors will put money into building those plants is if they can expect to make a fair profit.
In the long run taking some kind of sadistic pleasure in preventing energy companies from earning a profit will harm, not help, their customers. It is likely to lead to power cuts - which is what happened in California when that state adopted an energy policy not entirely unlike Ed Miliband's.
To paraphrase the "Ten cannots,"
You cannot help the energy customer by destroying the energy supplier.
In contrast the government's policy to help customers is paid for and sustainable.
Currently, the average dual fuel bill for households is £1,385.
Some of the saving will come in the form of a reduction in the Energy Companies Obligation (ECO), which requires energy companies to provide insulation or other energy-saving measures to 400,000 homes a year. In future, these measures will be paid for by a tax-funded programme of £500m, and will be granted via an average £1,000 stamp duty rebate for home buyers who need to improve energy efficiency at their new property.
The total £50 cut in the average household bill is made up of:
- A reduction of about £30 to £35 as a result of changes to ECO
- A rebate of £12 on electricity bills for customers in each of the next two years, owing to changes to the Warm Home Discount
- A one-off £5 cut in electricity bills by cutting network costs, which represent close to a quarter of a typical bill
"It is right to refocus the Energy Company Obligation so that it gives greater priority to those most in need of help, with lower-cost measures such as loft and cavity wall insulation. But in return for more time to get this right, the suppliers must now commit to greater transparency and to getting their costs down, fast."
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