Labour donor Dale Vince is calling on the government to urgently address the issue of high energy bills. Vince, a prominent figure in the green industry and founder of Ecotricity, proposes three straightforward measures that he believes could significantly reduce prices, combat inflation, and stimulate the economy simultaneously.
He advocates for the decoupling of renewable energy costs from the global gas price, estimating potential savings of over £43 billion in the last five years alone. Vince has reached out to all members of parliament and published a special newspaper edition to emphasize his message.
This initiative follows Ofgem’s recent announcement of an increase in the price cap for households to an average of £1,758 annually starting in January. Chancellor Rachel Reeves is expected to address energy bill assistance in the upcoming Budget, with one proposal involving the removal of VAT from energy bills, potentially saving customers around £84 per year.
Vince supports this idea and proposes offsetting the revenue loss by implementing VAT on flights instead. He points out that half of Britons do not fly annually, with the wealthiest 10% accounting for half of all flights taken. According to Vince, his three-point plan could reduce energy bills by approximately £20 billion yearly over a five-year period.
In addition to addressing the link with gas prices, Vince suggests tackling the high-profit margins of the predominantly foreign-owned energy network companies. He also controversially suggests providing price certainty for North Sea oil and gas producers, despite concerns about the environmental impact of fossil fuels.
Vince is optimistic about the economic benefits that could result from these changes, emphasizing the need to rectify a system that burdens households and hampers the country’s economy. He stresses that current energy regulations artificially inflate bills and asserts that a solution is within reach.
Liberal Democrat leader Sir Ed Davey, in the same publication, criticizes the government for the ongoing energy crisis, highlighting the struggles faced by families and pensioners due to high energy costs. He attributes the situation to a flawed energy market and inadequate government policies, rather than investments in renewable energy.
Davey underscores the need to disconnect electricity prices from volatile gas markets, ensuring that households benefit from the abundance of clean and affordable electricity available. He argues that aligning electricity prices with expensive gas undermines energy security and public support for renewable energy initiatives.