SKETCH: Who is Responsible for the Energy Price Surge?

The hardest thing is getting them to admit the simplest things.

Margaret Hodge had the Treasury and the Department of Energy and Climate Change in to ask who is responsible for the great surge in energy prices and who is looking after consumers’ interests.

She didn’t question the departmental witnesses, but yelped at them in frustration, and then gazed with spaniel-eyed looks of reproach.

The water industry, she remembered, underspent one year by £1bn and with the regulator’s approval they gave the money out as a dividend, rather than put it into infrastructure. Why was that allowed to happen? Who allowed it? Why didn’t they do anything to stop it?

And now with energy costs having gone up by 40 per cent in real terms they were going up another 18 per cent to pay for infrastructure development. And median incomes had stayed flat for a decade. Hadn’t they. Hadn’t they! Hadn’t they? Yes, they had. Thank you.

The man from Energy and Climate Change, Simon Virley, said that the investment proposals weren’t actually regressive. The bottom 30 per cent of the population were “gaining most”.

Richard Bacon had heard something in the way Virley had put it: “You said the effect of the infrastructure will make it less regressive than they would otherwise have been. Are you saying they will be regressive?”

Virley shifted on his seat and started evasive tactics.

Bacon: (shutting his eyes to concentrate) “My question wasn’t ‘Who gains the most, and who gains to a lesser extent?’ Um, you used the phrase ‘less regressive’. That makes it sounds to me like – correct me if I’m wrong – that it will be regressive but it will be less regressive for those groups.” Got it! “Is that what you’re saying?”

Virley: (staring slightly): Well, I think I’m saying that it is actually a progressive package –

Bacon: “It’s very clear the difference between the two, and I just want to be clear in my own mind. ‘Less regressive’ and ‘progressive’ mean different things.”

Virley (leaning forward, smiling, with open hands): “The point I’m making is the total package is progressive because the lowest earners stand to gain the most.”

Bacon: “So, they’ll be better off than they are now.”

Virley: “I’m talking about the impact of Government policy.”

Bacon: “If it’s progressive, they’ll be better off than they are now.”

Virley: “Government policy is progressive. (Casting out a red herring) Of course if wholesale prices rise, if energy bills go up, that will hit lower income earners more.”

Hodge: “Are you saying the poorest 30 per cent will not have to pay any of this 18 per cent increase?”

Virley: “No, I’m saying when you take account of Government policy and the efficiency measures, it is progressive.”

Bacon: “It sounds like you’re saying it’ll be regressive but not quite as regressive as it might otherwise have been.”

Hodge: Quite. Why don’t you just say that?

Virley: Because that’s not what I think is the case.

Bacon: Do you think they’ll be better off than they are now?

Hodge: Will they pay less than they are now?

Virley: Er, n-no, they won’t be paying less than they are now . . . they gain the most in proportionate terms . . .

Poor people paying more for their energy, “gain the most in proportionate terms.”

This is the sort of struggle that democrats have “holding the executive to account” in the phrases they use.



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Quote of the Day

Charles Clarke says Cameron is the most successful PM for over a century…

“Under Margaret Thatcher the Conservatives gained 99 seats. They lost 211 under John Major, gained one under William Hague, quickly and wisely got rid of Ian Duncan-Smith, gained 32 under Michael Howard and have so far gained 133 under David Cameron who, to the great surprise of many (including senior Conservatives), has turned out to be the most electorally successful Tory leader since 1900.”

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