Page last updated at 15:05 GMT, Wednesday, 23 November 2011

Huhne: Policies will soften blow of rising energy bills

Rising global gas prices will push up UK energy bills but the government's policies will lessen the impact, Energy Secretary Chris Huhne has said.

Mr Huhne said he expected household bills to be about 7% lower - £94 - than they would have been without government action, by 2020.

He added: "Britain's homes will be cheaper to heat and light than if we did nothing."

Mr Huhne was addressing the Commons as he delivered the annual energy statement on 23 November 2011.

He believed the coalition's policies, which include building nuclear power plants and aiming to provide 20% of the UK's electricity from renewable sources by 2020, would "deliver secure, affordable electricity from a diverse mix of sources".

Labour attacked the government's decision to reduce subsidies for solar power, arguing it would "cut the industry off at its knees".

Shadow energy secretary Caroline Flint warned that "many firms currently providing solar are about to go to the wall".

She also accused the government of failing to tackle the "big six" energy companies and said its advice to consumers to "shop around" for the cheapest deals as a way to combat rising prices was not enough.

Liberal Democrat Andrew George wanted to know how to achieve a "reasonable balance" between the amount consumers and the "big six" energy companies paid towards supporting renewables. Mr Huhne told him the key was a "properly competitive" market.

Tory Peter Lilley asked Mr Huhne how he squared wanting to keep energy prices as low as possible with the Stern Review, "on which your policies are based which makes it clear that policy can only work by raising energy prices to include the external costs of global heating and to raise the cost of hydrocarbon-based energy to make it more expensive than other forms of sustainable energy?".

"In short, if your policy isn't hurting it isn't working," he added.

Mr Huhne said a "very substantial" part of what the government needs to do to tackle climate change "are actually measures that we've legislated for in the Green Deal which pay for themselves".

He added: "It's the energy saving element which means those bits which do have a cost, where we are raising process in order to move to the low carbon economy when it comes to electricity generation, are cut by the reduction in volumes of energy, precisely because of our energy saving measures."

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