Why gas prices are so politically hot

Gas hob

What's the bit of economic news that voters have noticed more than any other since the coalition came to power?

Was it the £6 billion of spending cuts made six weeks after they came to office?

Or the day the chancellor had to admit that the government had missed its borrowing targets? Or the moment inflation hit 5%? No, none of those.

It was, researchers have told ministers, the day one of the energy firms increased its prices by 20%.

This was no mere statistic or forecast or description of the general state of the economy. It was over two hundred quid out of the pockets of the average household who bought their energy from that company and the prospect of the same for millions of others.

That's why the government has reacted so swiftly to allegations that the energy firms are price fixing.

It's why David Cameron said something his energy secretary Ed Davey knew nothing about when he promised to legislate to ensure customers paid the lowest tariff available. Behind the scenes they're still trying to work out how to refine and deliver that promise.

It's why there is a ferocious Whitehall row going on about new green energy targets: the Treasury fears they will drive up bills still further whilst the Department for Energy and Climate Change (DECC) insists they will create green jobs for the future.

George Osborne believes that cheap gas could boost the economy just as North Sea oil once did.

The energy secretary is insisting that that should not mean abandoning targets for electricity from renewable sources.

All this in a week when British Gas is imposing a price rise of 6% for gas and electricity meaning that, according to the energy account transfer service uSwitch, the average household bill for a dual-fuel British Gas customer will go up from £1,260 to £1,336 a year.

This issue of gas is hot. Very hot.

Nick Robinson Article written by Nick Robinson Nick Robinson Political editor

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  • rate this

    Comment number 75.

    It would be helpful to nearly everyone in the country if the government took the necessary powers to prevent all increases in energy prices until the investigation into price fixing/rigging is completed.
    Come on 'Pasty George' we are all in this together.

  • rate this

    Comment number 74.

    Human rights legislation is not Utilitarian. It looks at how an individual is treated. It is reactive, that is it contemplates a given situation at a given time. The BBC and media do not report correctly because it is not in their interests to do so. The issue concerns the criminal law system in Jordan, and other nations. The Government and Liberty silent, now that's the story. Is there a journo?

  • rate this

    Comment number 73.

    Consulted energy industry regulator; OFGEM's website to discover what is happening about the pricing review & investigation into gas price fixing. No information at all was to be found. What is due to happen and when?

    You could understand some suggesting that these reviews are just a sop and a way to kick the issues into the long grass.

  • rate this

    Comment number 72.

    The Gov't won a recent fuel tax increase parliamentary vote. 2 UK oil majors recently posted combined £7.5bn profits for Q3 alone, yet GO announced £3bn tax break & an annual £45m for oil industry in March.


    Many share Nadine Dorries' view that Mr Osborne is out of touch & feels not their pain on fuel costs.

  • rate this

    Comment number 71.

    Some say Nadine Dorries has a point, with her oft repeated quote about the occupants of No's 10 & 11 Downing St. It is hard to argue against it, when it took the PM until 19/10/12 & his " transfer to cheapest tariffs" policy announcement to realise consumers were struggling with energy costs, after above inflation increases since 2010.


Comments 5 of 75



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