After the energy shambles, Cameron needs to restore certainty

The timing of this week’s confusion could not have been worse.

The last three days have seen government policy on energy tariffs and decarbonisation in flux. Conflicting statements from the Prime Minister, the Energy Secretary and the new energy minister have caused confusion. While an announcement from Ofgem today has helped provide clarity, confidence in the government has already been undermined. With a group of major energy companies already threatening to withdraw hundreds of millions of pounds of planned new investment in the UK due to policy uncertainty, this week's events will only make matters worse.

At Prime Minster’s Questions on Wednesday, Cameron said, “I can announce that we will be legislating so that energy companies have to give the lowest tariff to their customers”. The sector was shocked and confused. Not only would this be incredibly difficult to implement, it would also mark the single greatest act of intervention in the energy retail market since liberalisation – not the type of light touch regulation to be expected from a Conservative Prime Minister.

Today, thanks to the release of Ofgem’s Retail Market Review, it has become clear what the Prime Minister should have said. He should have announced that suppliers will be required to tell customers if there is a cheaper tariff, rather than automatically putting customers on the cheapest tariff.

One of Ofgem’s better proposals in the review is for suppliers to only be able to offer four tariffs for each fuel type. This policy was recommended by IPPR in our recent investigation of the retail energy market. This reform will simplify the market and encourage people to switch thereby improving competition, which will help keep bills low.

It should also help to ensure that tariffs are reflective of suppliers’ costs — a major problem since ‘loss leading’ tariffs act as a barrier for new suppliers to enter in to the market and vulnerable and low income people who don’t switch regularly can often be overcharged.

The timing of this week’s confusion could not have been worse. It is only three weeks since Ofgem announced that the spare electricity generation capacity in Britain will fall to a critically low level in 2015/16, raising the prospect of blackouts. With Twitter quick to dub this episode a "combishambles", the government needs to restore certainty and predictably before they publish their upcoming Energy Bill.

Reg Platt is Research Fellow at IPPR. He tweets as @regplatt.

David Cameron speaks with Maltese Prime Minister Lawrence Gonzi at the start of the second day of an EU summit in Brussels. Photograph: Getty Images.

Reg Platt is a Research Fellow at IPPR. He tweets as @regplatt.

Photo: Getty
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Paul Nuttall is like his party: sad, desperate and finished

The party hope if they can survive until March 2019, they will grow strong off disillusionment with Brexit. They may not make it until then. 

It’s a measure of how far Ukip have fallen that while Theresa May faced a grilling over her social care U-Turn and Jeremy Corbyn was called to account over his past, the opening sections of Andrew Neill’s interview with Paul Nuttall was about the question of whether or not his party has a future.

The blunt truth is that Ukip faces a battering in this election. They will be blown away in the seats they have put up a candidate in and have pre-emptively retreated from numerous contests across the country.

A party whose leader in Wales once said that climate change was “ridiculous” is now the victim of climate change itself. With Britain heading out of the European Union and Theresa May in Downing Street, it’s difficult to work out what the pressing question in public life to which Ukip is the answer.

Their quest for relevance isn’t helped by Paul Nuttall, who at times tonight cast an unwittingly comic figure. Pressing his case for Ukip’s burka ban, he said earnestly: “For [CCTV] to work, you have to see people’s faces.” It was if he had intended to pick up Nigel Farage’s old dogwhistle and instead put a kazoo to his lips.

Remarks that are, written down, offensive, just carried a stench of desperation. Nuttall’s policy prescriptions – a noun, a verb, and the most rancid comment underneath a Mail article – came across as a cry for attention. Small wonder that senior figures in Ukip expect Nuttall to face a move on his position, though they also expect that he will see off any attempt to remove him from his crown.

But despite his poor performance, Ukip might not be dead yet. There was a gleam of strategy amid the froth from Nuttall in the party’s pledge to oppose any continuing payment to Brussels as part of the Brexit deal, something that May and Corbyn have yet to rule out.

If May does manage to make it back to Downing Street on 8 June, the gap between campaign rhetoric – we’ll have the best Brexit, France will pay for it – and government policy – we’ll pay a one-off bill and continuing contributions if need be – will be fertile territory for Ukip, if they can survive as a going concern politically and financially, until March 2019.

On tonight’s performance, they’ll need a better centre-forward than Paul Nuttall if they are to make it that far. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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