ERA response to the BERR Select Committee report on Energy prices, fuel poverty and Ofgem, 28 July 2008

Duncan Sedgwick, Chief Executive of the Energy Retail Association (ERA), which represents the six major energy suppliers in Great Britain, responding to the report said:

“The Committee’s report reaches the conclusion that has been known in the industry for some time - the era of cheap energy is over. Unfortunately life is getting more expensive for all of us with wholesale energy prices rising on the back of unprecedented global demand for oil, gas and coal. Our own dwindling North Sea reserves also mean that energy companies are increasingly reliant on gas from Europe and global wholesale markets, where prices are higher.

“As consumers face rising pressures on their incomes, we accept the Committee’s recommendation for government to consider a fundamental rethink of its fuel poverty strategy. For several years the industry has been calling on government to look again at the effectiveness of their policies for alleviating fuel poverty. Whilst energy companies have an important role to play, the issue of poverty in its wider sense has to be the responsibility of government. The solutions to poverty are complex, long-term, and require a joined-up approach, not a ‘one size fits all’ solution.

“Energy suppliers give more direct help to their most vulnerable customers than any other industry. Suppliers recently announced an extra £225 million for the period 2008 – 2011 in voluntary contributions, in addition to the £150m already allocated and the £1.4 billion energy efficiency commitment to help customers most at risk. There is no other industry that spends so much money to reduce demand for its own product.

“As the Committee acknowledges, if we are serious about keeping the lights on for future generations then companies need to be given the freedom and opportunity to innovate and invest for our long term needs. That is why we need clear, cohesive energy policies led by Government. Only with that level of certainty can energy companies plan to meet our future energy needs.

“We await with interest the outcomes of Ofgem’s market probe, as many of the committee’s recommendations are dependent on this.”

- Ends -

For further information please contact the press office on 07983 469 766 or 020 7747 5432:

Peter Jenkins, Head of Communications & Media Relations, Energy Retail Association

OR

Claire Gibson, Senior Press Officer, Energy Retail Association

                                                                                                                               
Top