With the cost of living set to be at the heart of the Budget, a Labour donor has set out a bold plan he says can permanently slash energy bills
A Labour donor has urged the government to take urgent action to halve energy bills.
Green industrialist Dale Vince, founder of the firm Ecotricity, claims “three simple measures” could slash prices, bring down inflation and boost the economy at the same time.
They include breaking the link between the cost of renewable energy and the globally traded price of gas which, he says, would have saved more than £43billion over the past five years alone.
The campaigner has written to every parliamentarian and created a one-off newspaper edition to hammer home the message.
His intervention comes after regulator Ofgem last week announced its price cap for millions of households will rise to an average £1,758 a year from January.
Chancellor Rachel Reeves is expected to confirm help with bills in this week’s Budget. One option is to remove VAT from energy bills, saving the average customer about £84 a year.
Mr Vince backs the idea, but suggests recouping the money by adding VAT to flights. He argues half of Brits do not fly in any given year and claims the richest 10% account for 50% of all flights taken.
His three-point plan, he says, could slash around £20billion a year off energy bills over a five-year period.
As well as the link with wholesale gas costs, he also suggests clamping down on the monopoly energy network companies – mostly foreign owned – that research suggest make an average 40% profit margin.
Perhaps more controversially, Mr Vince also suggests providing price certainty for North Sea producers, despite criticism of fossil fuel firms for their alleged role in the climate crisis.
“An enormous boost to our economy is within reach,” he said. “It’s not about net zero – it’s about fixing a rip-off system that punishes households and weakens Britain’s economy. I’ve sent this to every MP and Peer in the land – because the prize is huge, and the fix is simple. Britain’s energy rules make our bills artificially high. It doesn’t have to be that way.”
Lib Dem leader Sir Ed Davey, writing in the special edition, says: “This winter, too many families will be forced to choose between heating and eating, while pensioners shiver in cold homes, afraid to put the boiler on. This is a national scandal.
“For too long, this crisis has been treated as an unavoidable consequence of global events. This is a fallacy. The pain families feel today is the direct result of a broken energy market and a catastrophic failure of government policy.”
He went on: “The problem is not, as Nigel Farage and Kemi Badenoch would have you believe, our investment in renewable energy. The problem is that families are not seeing the benefit of cheap renewables in their bills.
“We are in the absurd and expensive position where the price of all electricity is tied to the price of the most expensive fuel – gas. Even as cheap, clean electricity floods our grid, households are still paying sky-high prices dictated by volatile gas markets. That is manifestly unfair. It compromises our energy security and fatally undermines public support for the clean energy we need.”
