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Coalition must act over high energy bills, say senior Tories Coalition must act over high energy bills, say senior Tories
(about 5 hours later)
David Cameron is facing calls from his own party to tackle high energy bills and the dominance of the Big Six companies after Ed Miliband promised to freeze gas and electricity prices.David Cameron is facing calls from his own party to tackle high energy bills and the dominance of the Big Six companies after Ed Miliband promised to freeze gas and electricity prices.
Several senior Tories put pressure on the coalition to respond with its own plan as they admitted Miliband had identified public concern about the energy market with his proposal for a 20-month freeze.Several senior Tories put pressure on the coalition to respond with its own plan as they admitted Miliband had identified public concern about the energy market with his proposal for a 20-month freeze.
Tim Yeo, the elected chairman of the energy committee, said he hoped the Labour leader's intervention would spark "a very strong focus on how energy bills can be kept down", while Anthony Nelson, a former Treasury minister who later became a Labour supporter, said Miliband was right to call for a freeze as the market "isn't working properly and desperately needs reform".Tim Yeo, the elected chairman of the energy committee, said he hoped the Labour leader's intervention would spark "a very strong focus on how energy bills can be kept down", while Anthony Nelson, a former Treasury minister who later became a Labour supporter, said Miliband was right to call for a freeze as the market "isn't working properly and desperately needs reform".
Education secretary Michael Gove, appearing on BBC1's Question Time, said he took claims by the companies that Labour's plans for a 20-month price freeze would lead to power blackouts "with a pinch of salt".
Gove said the Labour leader had been "absolutely right" to say energy prices were too high.
"He is also I think right to draw attention to the fact that the behaviour of the six power companies hasn't been entirely admirable ever since they've had a chance to be able to play the market in the way they have," Gove said.
However, there were divisions among Labour ranks over the impact of Miliband's policy. Lord Myners, a former Labour City minister, said the idea of a price freeze had not been thought through.However, there were divisions among Labour ranks over the impact of Miliband's policy. Lord Myners, a former Labour City minister, said the idea of a price freeze had not been thought through.
He said: "It is indicative of the work Labour still needs to do in developing a sensible set of policies for business and economic growth."He said: "It is indicative of the work Labour still needs to do in developing a sensible set of policies for business and economic growth."
Lord Mandelson, the former business secretary, said he feared a price freeze would be a step in the wrong direction for the party.Lord Mandelson, the former business secretary, said he feared a price freeze would be a step in the wrong direction for the party.
But despite reservations about the practicality of an energy price freeze, many Tory MPs were alarmed at Labour's move to dominate the debate on reducing people's cost of living.But despite reservations about the practicality of an energy price freeze, many Tory MPs were alarmed at Labour's move to dominate the debate on reducing people's cost of living.
One Conservative MP said the party was in danger of being seen as on the wrong side of the debate. He said: "We really don't want to be seen as defenders of big business against consumers. We don't agree with a price freeze but there's much more we could be doing on this."One Conservative MP said the party was in danger of being seen as on the wrong side of the debate. He said: "We really don't want to be seen as defenders of big business against consumers. We don't agree with a price freeze but there's much more we could be doing on this."
Yeo, a senior Tory, said he feared Miliband's idea would discourage green investment, but he had raised legitimate issues about prices and profits in the energy industry.Yeo, a senior Tory, said he feared Miliband's idea would discourage green investment, but he had raised legitimate issues about prices and profits in the energy industry.
"I recognise there's a real concern about energy bills and there's a lack of trust in the Big Six companies," said Yeo, who has temporarily stepped aside as energy committee chairman during a parliamentary standards investigation relating to his business links."I recognise there's a real concern about energy bills and there's a lack of trust in the Big Six companies," said Yeo, who has temporarily stepped aside as energy committee chairman during a parliamentary standards investigation relating to his business links.
"Miliband's policy certainly does address an area of public concern, though it does it in a way that is counter-productive. I do think it's quite clearly welcome that there will now be a very strong focus on how energy bills can be kept down."Miliband's policy certainly does address an area of public concern, though it does it in a way that is counter-productive. I do think it's quite clearly welcome that there will now be a very strong focus on how energy bills can be kept down.
"We need to look at the Ofgem regulatory regime and transparency about prices and making energy efficiency a priority."We need to look at the Ofgem regulatory regime and transparency about prices and making energy efficiency a priority.
"There's a suspicion that the energy companies' margins have sometimes got wider. I know they will refute that but I don't think they've convinced the public yet about it.""There's a suspicion that the energy companies' margins have sometimes got wider. I know they will refute that but I don't think they've convinced the public yet about it."
Dr Phillip Lee, a Tory member of the energy committee, said he did not agree with price fixing but "Miliband is partially right in his argument that there's a problem with the energy market in Britain".Dr Phillip Lee, a Tory member of the energy committee, said he did not agree with price fixing but "Miliband is partially right in his argument that there's a problem with the energy market in Britain".
He said: "The idea of a free market for energy in the world is complete nonsense. That's why I have been persuaded there needs to be more state involvement in the industry."He said: "The idea of a free market for energy in the world is complete nonsense. That's why I have been persuaded there needs to be more state involvement in the industry."
Senior Liberal Democrats also raised concerns that Cameron might respond by cutting green levies on household bills in a way that would undermine the fight against climate change.Senior Liberal Democrats also raised concerns that Cameron might respond by cutting green levies on household bills in a way that would undermine the fight against climate change.
Tim Farron, the Lib Dem president, warned there was great "danger" that the debate will lead Tory right-wingers to put pressure on Cameron to row back on the green agenda.Tim Farron, the Lib Dem president, warned there was great "danger" that the debate will lead Tory right-wingers to put pressure on Cameron to row back on the green agenda.
"[Tory backbenchers] will think it's a popularist issue and think: 'stuff this green nonsense'," he said. "It's dangerous in that way.""[Tory backbenchers] will think it's a popularist issue and think: 'stuff this green nonsense'," he said. "It's dangerous in that way."
He said he did not agree with Miliband's "silly" idea of freezing bills but believes more must be done to help households struggling with their "terribly high" energy costs.He said he did not agree with Miliband's "silly" idea of freezing bills but believes more must be done to help households struggling with their "terribly high" energy costs.
Adrian Sanders, Lib Dem MP for Torbay, said he thought Miliband's plan was a "good idea worth examination" even though there were "serious questions" still to be answered about how it would work and whether it would be better targeted just at households in the most need. "Just because something similar was tried in the US that led to power shortages does not mean it would lead to power cuts in the UK," he said.Adrian Sanders, Lib Dem MP for Torbay, said he thought Miliband's plan was a "good idea worth examination" even though there were "serious questions" still to be answered about how it would work and whether it would be better targeted just at households in the most need. "Just because something similar was tried in the US that led to power shortages does not mean it would lead to power cuts in the UK," he said.
The first call for lower green costs on bills has already come from Dominic Raab, Tory MP for Esher and Walton. The Conservative yesterday said the coalition must act to cut high bills by "weaning energy companies off arbitrary green subsidies", as well as "promoting greater competition through innovative ideas like online group-switching".The first call for lower green costs on bills has already come from Dominic Raab, Tory MP for Esher and Walton. The Conservative yesterday said the coalition must act to cut high bills by "weaning energy companies off arbitrary green subsidies", as well as "promoting greater competition through innovative ideas like online group-switching".
The coalition argues it is already doing a huge amount to help people with their energy bills, including a scheme to help the poorest families and its Green Deal to help people reduce their energy usage.The coalition argues it is already doing a huge amount to help people with their energy bills, including a scheme to help the poorest families and its Green Deal to help people reduce their energy usage.
Ed Davey, the Lib Dem energy secretary, said: "Everyone wants to help with the cost of rising bills but we need to be sensible.Ed Davey, the Lib Dem energy secretary, said: "Everyone wants to help with the cost of rising bills but we need to be sensible.
"Price-fixing jeopardises investment in new power stations, making power cuts a real possibility."Price-fixing jeopardises investment in new power stations, making power cuts a real possibility.
"It also puts at risk Britain's transition to a clean, green, low-carbon future.""It also puts at risk Britain's transition to a clean, green, low-carbon future."
However, on Thursday Labour argued that it was possible for the energy companies to freeze prices, given that npower, EDF Energy and Scottish Power were already offering deals that would fix household bills until 2017.However, on Thursday Labour argued that it was possible for the energy companies to freeze prices, given that npower, EDF Energy and Scottish Power were already offering deals that would fix household bills until 2017.
Caroline Flint, the shadow energy secretary, said: "The fact that three of the Big Six energy companies are now advertising deals to let people fix their energy bills until 2016 or 2017 shows that all the warnings about blackouts were nothing more than scaremongering. Labour reforms and price freeze will make sure consumers get a fair deal."Caroline Flint, the shadow energy secretary, said: "The fact that three of the Big Six energy companies are now advertising deals to let people fix their energy bills until 2016 or 2017 shows that all the warnings about blackouts were nothing more than scaremongering. Labour reforms and price freeze will make sure consumers get a fair deal."
She also took a swipe at Mandelson over his concerns about the wisdom of a 20-month freeze.She also took a swipe at Mandelson over his concerns about the wisdom of a 20-month freeze.
"Lord Mandelson is just plainly wrong," she told the BBC. "Our energy market reforms are about making the market more competitive, but also recognising that not just consumers but also businesses have been paying too much for their bills.""Lord Mandelson is just plainly wrong," she told the BBC. "Our energy market reforms are about making the market more competitive, but also recognising that not just consumers but also businesses have been paying too much for their bills."
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