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Ed Davey warns anti-green Tories 'threaten investment' Energy customers get switch rights under Ofgem plans
(about 4 hours later)
An anti-green movement within the Tory party is threatening tens of billions of pounds of investment, Lib Dem Energy Secretary Ed Davey has warned. Households with pre-payment meters who owe up to £500 to their energy supplier will be able to switch to cheaper deals with another firm under new measures.
href="http://www.guardian.co.uk/politics/2012/sep/23/tory-tea-party-threat-green-energy-jobs?newsfeed=true" >He told the Observer that a "Tea Party tendency" among Tory MPs could deter low-carbon energy projects. It is part of a push by regulator Ofgem to encourage suppliers to work more effectively with struggling bill-payers and use disconnection as a last resort.
And Business Secretary Vince Cable has warned of a "populist backlash against everything green". Customers of the biggest six companies are currently able to move only if they have debts of less than £200.
Mr Davey is due to tell the Lib Dem conference that energy users who owe suppliers up to £500 may switch firms. Meanwhile, the energy secretary is due to unveil plans to counter mis-selling.
He will also announce that users may be compensated if energy companies break rules, such as by mis-selling. Under the Ofgem announcement, British Gas, EDF, Eon, SSE, Scottish Power and Npower will allow people on pre-payment meters to switch from 1 November.
Mr Davey said investment in low-carbon energy infrastructure projects, including new nuclear power, carbon capture storage and wind and solar energy, offered significant opportunities for the British economy.
But he said that "noises off at the margins" of the Tory party were undermining investors' confidence "and that is undermining green growth, and that is undermining the central purpose of the government, which is deficit reduction".
He added: "When you hear all that noise on the right of politics, that worries investors.
"They think, 'Well if I am going to put all this money in - it is a 30-year investment - I need to know that if the government changes we are not going to have some right-wing Tea Party tendency taking over.' "
The "Tea Party" movement in the US is a grassroots right-wing faction which opposes high taxes and government controls.
Climate change
The Press Association reports that also during his speech at the Lib Dem party conference on Sunday, Mr Davey will back calls for a target on cutting energy sector emissions by 2030.
"Like the rest of the global economy, investors crave certainty, stability, the confidence that governments will stick to their word," he will say, according to the report.
"That's why I think there's a strong case for a carbon limit for Britain's energy grid for 2030."
The plan to extend the ability of in-debt householders to make a switch to cheaper deals is part of a number of measures to help customers cope with rising utility prices.
Energy suppliers British Gas, EDF, Eon, SSE, Scottish Power and Npower will allow people on pre-payment meters to switch from 1 November.
Currently, only customers with debts of £200 or less are allowed to switch.
It is thought tens of thousands of users will be helped by the move.It is thought tens of thousands of users will be helped by the move.
There are 320,000 gas and 315,000 electricity customers with pre-payment meters who owe money to their supplier, according to energy regulator Ofgem. There are 320,000 gas and 315,000 electricity customers with pre-payment meters who owe money to their supplier, according to Ofgem.
The latest initiative is part of Ofgem's push to encourage suppliers to work more effectively with households to resolve debt issues and use disconnection as a last resort. The majority racked up the debts when they were given credit by the suppliers and moved to pre-payment meters as a condition of their repayment plans.
Ofgem is due to report figures next week that will show a 59% fall in the number of people disconnected from their gas supply and a 54% drop in electricity disconnections, partly as a result of people being given more time to repay debts.Ofgem is due to report figures next week that will show a 59% fall in the number of people disconnected from their gas supply and a 54% drop in electricity disconnections, partly as a result of people being given more time to repay debts.
However, the average amount of debt people are repaying on their gas accounts rose to £371 in 2011, up from £339 the previous year.However, the average amount of debt people are repaying on their gas accounts rose to £371 in 2011, up from £339 the previous year.
Meanwhile, the average electricity debt fell slightly to £357.Meanwhile, the average electricity debt fell slightly to £357.
Sarah Harrison, senior partner for sustainable development at Ofgem, said: "We welcome the significant falls in the number of households being disconnected, but Ofgem remains determined to ensure suppliers continue to focus on helping consumers manage their energy bills and reduce their debt."Sarah Harrison, senior partner for sustainable development at Ofgem, said: "We welcome the significant falls in the number of households being disconnected, but Ofgem remains determined to ensure suppliers continue to focus on helping consumers manage their energy bills and reduce their debt."
Lower bills People power
Ofgem will also be given new powers to help customers gain compensation if they have lost money owing to energy companies breaking industry rules, under new government proposals. Ofgem will also be given powers to help customers gain compensation if they have lost money owing to energy companies breaking industry rules, under the government proposals to be unveiled by Energy Secretary Mr Davey at the Lib Dem conference.
Ofgem already has the power to penalise energy firms heavily when they break the terms of their licences, for example by mis-selling products or overcharging, but the money from those fines goes straight to the Treasury.Ofgem already has the power to penalise energy firms heavily when they break the terms of their licences, for example by mis-selling products or overcharging, but the money from those fines goes straight to the Treasury.
The new powers will allow Ofgem to force suppliers to pay compensation directly to their customers, in cases where a voluntary agreement cannot be reached.The new powers will allow Ofgem to force suppliers to pay compensation directly to their customers, in cases where a voluntary agreement cannot be reached.
They also include a £5m fund for schemes which bring local people together to switch energy supplier en masse in a bid to secure lower bills.They also include a £5m fund for schemes which bring local people together to switch energy supplier en masse in a bid to secure lower bills.
The cash will go to the best initiatives drawn up by local councils and community groups, with Mr Davey warning that without them the best deals were reserved for "well-heeled internet savvy" consumers.The cash will go to the best initiatives drawn up by local councils and community groups, with Mr Davey warning that without them the best deals were reserved for "well-heeled internet savvy" consumers.
He was inspired to offer the funding after being present at the launch of such a move in Cornwall - set up jointly by a local authority, the NHS, a trade union, the Eden Project and a brewery.He was inspired to offer the funding after being present at the launch of such a move in Cornwall - set up jointly by a local authority, the NHS, a trade union, the Eden Project and a brewery.
Meanwhile, Mr Cable told a Green Liberal Democrats fringe event in Brighton on Saturday: "It is really alarming that we are now getting this populist backlash against everything green.
"That's why it is essential - and probably politically self interested, to be frank - that we fight back against it.
"Those of us who do believe that it's possible to reconcile economic growth and recovery with environmental values have got a strong case to make because we are under pressure from both directions."