Follow UK Immigration and UK Economy: UK Secretary of State for Energy and Climate Change Edward Davey has called on electricity and gas suppliers to take proactive action to disclose their true profitability to consumers and energy regulators.
Davey's aides have requested that Ofgem (the UK energy regulator) assess profit margins in the gas and electricity sectors. He stated: "The 'Big Six' energy companies should be transparent." He demanded that companies such as Centrica, the UK's largest gas supplier, "should clearly state their corporate profits."
Using British Gas as an example, Davey pointed out that according to estimates by the Department of Energy and Climate Change, costs related to helping households stay warm account for £47 of the average annual energy bill. However, British Gas announced on Thursday (October 17) that gas prices would rise by 10%, while household subsidies would increase by £40. The Department of Energy and Climate Change will not accept this outcome.
Ministers hope to end the debate over energy prices by Monday. Davey is expected to announce the signing of a major contract that will facilitate the establishment of new nuclear power plants in the UK. A consortium led by Électricité de France (EDF) will sell electricity generated by the Hinkley Point nuclear power plant at an agreed price. Reports suggest that both parties are expected to reach an agreement at a strike price of £90-92 per megawatt-hour. The new nuclear energy program is five years behind schedule, and the new nuclear power plants will not be able to start supplying power until 2020.
Faced with soaring energy prices, the Scottish National Party (SNP) stated that if Scotland becomes independent, the Cameron government's energy expenditure would decrease. SNP Deputy Leader Nicola Sturgeon said that an independent Scottish government could reduce energy costs by 5%. The SNP hopes this move will provide a dramatic boost to the issue of Scottish independence.
Energy ministers admit that they do not yet know how much other energy companies will raise their prices this winter; currently, only Scottish and Southern Energy (SSE) and British Gas have announced price hikes. Bad news will continue to hit Downing Street.
After Davey mentioned that he wears snow boots at home to reduce expenses, cabinet officials at Downing Street, facing the sensitive issue of energy prices, have had to consider whether they should also encourage people to wear snow boots at home to stay warm, thereby reducing the use of gas and electricity.
UK Labour Party leader Ed Miliband retorted: "Never believe the nonsense that the government is powerless or that everyone is responsible for solving the energy problem."
