What we should do

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Our MP, Iain Wright, wants the Government to act over energy bills(MP writes, Mail, October 24).

He quite rightly said that people living on low incomes are struggling with their gas and electricity bills and that some of them “will have to choose between eating and heating.”

Iain supports Ed Miliband’s economically illiterate promise that he would freeze energy prices from May 2015 to the start of 2017, if he becomes Prime Minister after the next Genera Election.

But that wouldn’t help the gas and electricity customers because the energy companies would increase their prices before the 2015 General Election and do the same after the freeze ends in January 2017, leaving their customers paying higher bills than they were before Miliband’s freeze started.

And a Labour government couldn’t stop them.

And he also supported Sir John Major’s nonsensical suggestion that there should be an immediate “windfall tax” on energy prices.

But that would simply be another increase in costs for the energy suppliers which would soon be passed on to customers.

And the coalition Government couldn’t do anything about that either.

The six major energy suppliers report that they are currently making modest profits of about five per cent on an average dual-fuel bill of £1,200 per year, ie a profit of £60 per year, or just over £1 per week per customer.

So even if their profit margin was reduced to zero the customers would only be £60 a year better off.

That wouldn’t help them much and they do need help.

Some suspect that the energy companies are collaborating with each other on gas and electricity prices but there have been 19 detailed investigations by politicians and regulators since privatisation in the 1980s and nothing significant has been unearthed.

The prospect of another investigation won’t worry the energy companies.

Energy prices have been going up because of worldwide supply shortages coupled with rising global demand.

That mismatch puts world prices up.

On top of that Ed Miliband’s policy, when he was in Government, was to move away from coal-fired power stations, which produce cheap electricity, and support largely ineffective wind farms and solar panels which produce very expensive and unreliable electricity, with the uneconomic costs passed on to the energy customers in the form of higher prices.

The present Government has foolishly continued with that misguided policy but some ministers are now having second thoughts.

How then can energy prices be reduced? And they should be.

First, the Government should call a halt to the closure of coal-fired power stations which produce very low-cost electricity.

Second, they should get rid of the green taxes which encourage investment in uneconomic wind turbines and solar panels.

Thirdly, there should be a detailed review to make sure there is absolutely no question of rampant profiteering or anti-competitive practices by the energy companies.

Finally, the Government should make payments to hard-pressed families to help them to pay their energy bills.

Jim Allan,