The energy companies can't avoid the blame for rising prices

While shifting the debate towards green levies, the Big Six have remained much quieter about their healthy profits.

They may be public enemy number one but you can't accuse the energy companies of being inept at public relations. Since their appearance in front of the energy select committee two weeks ago, the Big Six have successfully moved the conversation about energy bills away from their own profits and practices and on to so-called green levies. But by promising to "roll back" these charges, the Prime Minister is marching to their tune and failing to get the best deal for consumers.

Energy companies like to blame anyone but themselves for rising energy prices. In announcing their inflation-busting price rises, energy companies were quick to focus on wholesale gas prices and the levies on bills for low carbon energy and fuel poverty reduction.

They were much quieter about their own rising profits and operating costs. Energy firms make a healthy 5 or 6 per cent from their supply arms. They claim this is needed to make necessary investments but their own generation businesses report profits as high as 20 per cent.

Instead of scrutinising the acceptability of this level of profits in the energy supply industry, or questioning why operating costs appear to be spiralling upwards, the media have lapped up energy bosses describing green levies as a "stealth poll tax".

The only obfuscation, however, is by the energy companies themselves. New figures from Ofgem, released following a freedom of information request by IPPR, show that the two companies performing least well are those that have jacked up their energy prices the most. British Gas added £50 to consumers' bills for these charges but has delivered just 4, 6 and 9 per cent of its obligations. Scottish Power, by contrast, have delivered 24, 48 and 31 per cent and only raised green charges by £20.

If the money can be found, there is something to be said for moving green charges off energy bills and onto general taxation. That would make them more progressive. But a higher priority should be moving subsidies for low carbon generation off bills and onto taxation, because landowners and big companies are currently the big beneficiaries of this subsidy. Moving measures to improve fuel poverty should come second because these are at least partly progressive.

Regardless, the government now looks all but certain to do this at the oddly-named Autumn Statement on 5 December. If this is the case, it must ensure that this goes hand in hand with reform of its fuel poverty policy. The current policy is failing to get help to the intended recipients. As IPPR has shown, around 80 per cent of the policy budget, £434m of £540m, is being spent on homes that are not fuel poor. And 1.3 million fuel poor households are not eligible for any form or support.

Instead, we need a much more targeted approach to fuel poverty. The best approach is for local organisations to give out free assessments to work out who is fuel poor so that support reaches those who really need it. And to help everyone who is struggling with high energy bills, low interest loans for making energy efficiency improvements should be made widely available.

The EDF coal-fired plant, in Blenod-les-Pont-a-Mousson, eastern France. Photograph: Getty Images.

Will Straw is Director of Britain Stronger In Europe, the cross-party campaign to keep Britain in the European Union. 

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.