Miliband under fire over ‘no progress' on electricity prices

Times

6 hours ago

Ed Miliband, the energy secretary, has made 'no progress' on making electricity cheaper over the past year, according to the government's climate advisers.
The Climate Change Committee (CCC) said the gap between gas and electricity prices was hampering efforts to increase the number of heat pumps and electric cars in the UK.
A unit of electricity cost almost four times that of gas — the worst ratio in Europe. The difference is partly because electricity bills are artificially inflated by being heavily loaded with the levies that pay for renewable energy and social schemes, such as the warm homes discount.
The committee, which one year ago urged action on the levies, said they could be shifted to gas bills, the exchequer, or a mix of both.
'By far the most important recommendation we have for the government is to reduce the cost of electricity,' said Professor Piers Forster, interim chair at the CCC. 'If we want the country to benefit from the transition to electrification, we have to see it reflected in the utility bills,' he said.
Heat pumps are three to four times more efficient than gas boilers. Yet the advisers said the 3.7:1 electricity-to-gas price ratio meant a household with a heat pump was paying £490 a year in levy costs.
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Emma Pinchbeck, the committee's chief executive, said evidence from other countries showed the ratio needed to be 3:1 or less to spur cleaner electric technology.
'We're worried that there won't just be enough incentive for people who can invest in these [heat pumps and electric cars] to invest in them,' she said.
The committee's call for cheaper electricity was echoed by the Institute for Fiscal Studies, which said the tax system was making reaching net zero more expensive than it needed to be.
A report by the think tank, published on Wednesday, said emissions from electricity were taxed more heavily than those from gas.
Bobbie Upton, a research economist at the IFS, said: 'If the government wants to help households and firms with the costs of net zero, rethinking these taxes on electricity would be a good first step.'
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The former Tory government twice promised to act to rebalance electricity and gas costs but failed to do so, with ministers nervous of being seen to put up gas bills.
The CCC said there had subsequently been 'no progress' on its chief recommendation last July of making electricity cheaper. 'The government has committed to consulting on this, but without any timetable,' it said.
However, Forster said overall he was encouraged by actions the Labour government had taken to cut emissions, from unblocking onshore windfarms to banning new petrol and diesel cars by 2030. 'We are more optimistic than we were this time last year,' he said, as the CCC published its annual progress report to parliament.
Britain's carbon emissions fell 2.5 per cent last year. That was driven by greener electricity supplies helped by the country's last coal power station closing, and a small dip in surface transport emissions despite traffic increasing — seen as a sign that the 1.5 million electric cars on UK roads are making a difference.
Tree-planting rates were another bright spot, with levels hitting their highest in two decades due to tax breaks and support from the Crown Estate.
However, a continued rebound in flights saw emissions from aviation grow 9 per cent, raising concerns of the risk to carbon targets. Emissions from aviation are now bigger than electricity supply, in what the report said was a 'stark contrast' to 1990, when emissions from flights were ten times smaller than power stations.
The government, which promised on Monday to reduce electricity prices for industry, was contacted for comment.