BBC News: The government has asked for and independent review of the energy market, just days after British Gas announced it is putting up its standard electricity price by twelve and a half percent. Theresa May did pledge to cap energy prices in the conservative manifesto, but the policy has been shelves since she lost her majority in the election. Well now the business secretary Greg Clark says the review will examine how price can be kept as low as possible while ensuring that the UK still meets its climate change targets
BBC News: Tom Burke, who used to advise both labour and conservative governments on energy policy, says that there is not much that can be achieved in a three month time frame.
Tom Burke: I think that a review this short is essentially headline management. I don’t think Dieter, heroic though he is, is going to be able to come up with something that isn’t already widely discussed within the energy community. We know that the quickest and cheapest way to drive bills down is to improve the efficiency of our buildings.
BBC News: Let’s take you back now to the news of an independent review being launched into the cost of energy, being launched by the government just a few days after British Gas raised standard electricity prices by twelve and a half percent. The study which is supposed to be published in October will investigate how to keep price as low as possible while ensuring that the UK still meets climate change targets. I have been talking to Tom Burke, who is the Chairman of the independent climate think tank E3G, and asked him whether he thinks that this is a good idea?
Tom Burke: Well I welcome the idea of more information, but I doubt that it is going to come up with anything new. It’s a three month review, and Dieter Helm is a very well informed person, but it’s unlikely that he will be adding anything new to the equation that’s already there. What we know is that of you want to achieve your fuel poverty reduction goals, you want to achieve your climate goals, and you want to improve the efficiency of the economy, then what you most of all need to do is improve the energy efficiency of your building stock. It is the fastest, most reliable, and most secure way of driving bills down. And what’s more doing it permanently so they are not at the whim of policies or wholesale prices.
BBC News: Well, professor Helm, who is running this review, says that it will be independent and it will sort out the fact from the myths about the cost of energy.
Tom Burke: I am always troubled by someone who comes up with the line facts and myths, it tends to be they want you to use their facts, not your facts, and as we saw with Howard Davis and the airport commission, as we’ve seen with HS2, it’s very difficult to do that, especially difficult if you’ve got to do that in three months. These are highly contested areas, there’s an awful lot of opinions, very many different judgements about what the facts mean. And that’s what matters to consumers, not what the facts are, but what the facts mean for people in their daily lives.
BBC News: So, do you think that there is a link between the announcement of this review and the controversial price hike that we have from British Gas, putting up electricity prices by twelve and a half percent?
Tom Burke: Yes, I think that there is a link in the sense that there is a blame game, the industry wants to blame the government, and the government wants to blame the industry, and the reality is that they are both at fault. The fact is that the utilities have not passed on the full benefit of falling energy prices, and government has failed to implement its building regulations as effectively as it could. There is, conservatively, about twenty five percent more savings we can get on our energy demand through efficient proper use of our building stock, and seeing it as infrastructure, and investing in it as if it was infrastructure. We could get those savings, and that would drive down energy bills permanently, it would also improve the overall efficiency of the economy, as well as meeting our climate targets.
BBC News: We heard a lot during the election about the promise of a price cap on energy, what happened to that?
Tom Burke: Well, it was interesting to hear that the government had suddenly adopted an Ed Miliband policy that they rubbished, and I think it was probably an attempt to manage the headlines, rather that really change the outcomes. This is not going to be brought about by tinkering in the margins of price policy. This is going to be brought about if the government decides to make this part of its infrastructure program, its industrial strategy if you like, and harnesses the energy in the cities to do this, and then drives it forward as a proper investment program.