A supporter of the Labour Party has called on the government to act promptly in reducing energy bills. Dale Vince, a proponent of green industries and the founder of Ecotricity, advocates for three straightforward measures that could cut costs, lower inflation, and stimulate the economy simultaneously.
Vince proposes disconnecting the cost of renewable energy from the globally traded gas price, which he believes could have saved over £43 billion in the past five years alone. He has reached out to all members of Parliament and published a special newspaper issue to emphasize his message.
This initiative follows the recent announcement by Ofgem that the price cap for millions of households will increase to an average of £1,758 per year starting in January. Chancellor Rachel Reeves is expected to offer assistance with bills in the upcoming Budget, with one option being the removal of VAT from energy bills, potentially saving the average consumer around £84 annually.
While Vince supports this idea, he suggests compensating for the lost revenue by adding VAT to air travel. He argues that half of Britons do not fly in a given year, with the wealthiest 10% accounting for half of all flights taken.
Vince asserts that his three-point plan could lead to an annual reduction of approximately £20 billion in energy bills over a five-year span. In addition to addressing the link with wholesale gas costs, he also recommends cracking down on the energy network companies, primarily foreign-owned, which reportedly maintain an average profit margin of 40%.
In a more controversial stance, Vince proposes offering price certainty for North Sea producers, despite criticism of fossil fuel companies for their alleged contribution to the climate crisis. He believes that significant economic growth is achievable by rectifying a system that burdens households and weakens the British economy, stating that the current energy regulations artificially inflate bills.
Liberal Democrat leader Sir Ed Davey, in the same publication, expresses concern about families facing difficulties in affording heating during the winter, attributing the situation to a flawed energy market and government policy failures rather than global events or renewable energy investments.
Davey criticizes the current situation where electricity prices are tied to gas prices, resulting in high costs for consumers even as clean and affordable electricity becomes more abundant. He emphasizes the need to decouple electricity prices from volatile gas markets to ensure fair pricing, enhance energy security, and bolster public support for clean energy initiatives.