It's Time to End Unfair Energy Price Rises

05/09/2011 13:12 BST | Updated 05/11/2011 09:12 GMT

Today's leak of a confidential memo on green policies, written by a No 10 advisor, reveals deep divisions at the heart of government over energy prices and climate change. It's also the second time in less than a week that energy secretary Chris Huhne has been attacked by Conservatives as on Wednesday, MEP Roger Helmer wrote a scathing article.

While the behind the scenes squabbles of the coalition parties might generate interest in the Westminster bubble, the real concern for the rest of the country is how to cope with the rapidly rising cost of energy.

Over the past few months five out of the six major energy companies have raised their prices by around a fifth. This is big hit to household budgets, already being squeezed to breaking point by frozen wages and rising costs.

At a time when industry experts argue that it costs our energy companies less to supply us than it did three years ago, during the financial crisis, it's a struggle to understand why all of us are paying these exorbitant prices.

Faced with this the Government simply isn't doing enough to support those struggling to make ends meet. Chris Huhne may not directly control the price of energy, but there are still things he can do right now to lower our bills.

Firstly, we need to fundamentally reform our energy market.

Right now just six providers supply 99% of the energy consumed by UK households. It is clear that this is no longer working for the consumer. The system is broken and it needs to change.

Labour leader Ed Miliband has called for an end to the dominance of Britain's 'big six' energy companies. Real competition is needed in the market to drive down prices. Opening up the market to new entrants will lead to more innovation and lower bills for all of us.

There is no doubt that we face significant challenges in guaranteeing our future energy security and moving to low carbon sources of energy. That's why we can't afford to carry on tinkering at the edges. We need real reform and a focus on ensuring affordable bills in the long term.

Secondly, we need clearer bills and 100% transparency on how they are calculated.

Currently our gas and electric bills are a mixture of strange tables, numbers and different costs, leaving most of us wondering how the final price has been arrived at. With simpler bills, huge price rises can't be hidden and consumers could for once genuinely be able to shop around to ensure they are getting the best deal.

And thirdly, we need to address the record rise in fuel poverty.

In July, uSwitch published research showing that a record 6.3m homes are now in fuel poverty paying 10% or more of their income to heat their home. Most worryingly, these figures don't take into account the huge price rises announced this summer. When these are factored in we could soon find well over a quarter of us will be struggling to keep warm this forthcoming winter.

Over the past year this Government has been systematically removing support for fuel-poor households, from scrapping Labour's Warm Front scheme, which provided 21st-century heating, to cutting winter fuel payments by up to £100.

The Government has said it will provide support for the fuel poor with its energy efficiency programme the Green Deal. It's a pay as you save scheme, with the cost of installing measures to reduce energy paid for out of the savings made on bills. The scheme is currently severely delayed in parliament, amid criticism of its viability. These criticisms were echoed in the No 10 memo today, so households up and down the country should not expect help anytime soon.

Instead of standing back minsters should be taking urgent action to curb soaring prices. Labour's approach would mean a real change - more competition, fairer bills, transparent pricing and extra support for those who need it. The Government's dithering and inaction is hitting households now and risking our future energy security. It's time for action.