Page last updated at 12:15 GMT, Thursday, 29 November 2012

Energy Bill statement

Energy Secretary Ed Davey made a statement to MPs on the introduction of the Energy Bill on 29 November 2012.

The bill aims to encourage more efficient use of energy in order to reduce the demand for electricity across the UK.

Ministers say a 10% reduction in electricity demand could produce savings of around £4bn in 2030, which would compensate for the cost of making efficiency investments upfront.

Extra investment in gas, renewables and nuclear will be paid for by households under the bill's proposals.

The bill will also include subsidies for the energy industry, adding around £100 to the average bill by 2020, but the government has pledged to guarantee cheaper bills in the long-term.

Mr Davey said high energy bills can put "huge pressure" on households and businesses but insisted the legislation would ensure consumers are placed on the "cheapest tariff that meets their preferences".

"We can and will diversity our energy supplies...we can and will push energy companies to make switching easier and quicker...we can and will continue to place energy-efficiency front and centre," he told MPs.

However Labour accused the prime minister, David Cameron, of "broken promises" on energy bills.

Shadow energy secretary Caroline Flint said the PM had pledged to force energy companies by law to put everyone on the lowest tariff but "all the government is really doing is limiting the number of tariffs those companies can offer".

"The simple truth is that even the lowest tariff in an uncompetitive market will not be a good deal," she said, adding that the big energy companies had managed to "get away with what they want" for too long.

Ms Flint also criticised the absence in the bill of a "clear decarbonisation target" to cut the amount of carbon in Britain's energy generation.

Mr Davey acknowledged had been a "matter of some debate" within the government.

He said ministers would bring forward amendments to the bill to give the secretary of state the power to set a target after the next general election, adding: "And I am very proud of it."

Liberal Democrat Sir Nick Harvey urged Mr Davey to "review the encouragement his department is giving to industrial scale burning of wood to generate energy".

He pointed to a report by the Royal Society for the Protection of Bird charity which said the policy was "bad news for the planet".

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