Speakinhg at a Parliamentary Press Gallery lunch President of the Bow Group Sir John Major has called for the government to intervene to prevent an oligopoly of energy companies increasing prices at twice the level of inflation.
The former Prime Minister said it was not acceptable that the companies had pushed through increases in bills which were twice the cost of whole gas and electricity.
EdF's rivals like nPower and British Gas have recently unveiled inflation-busting increases in power bills. There are suggestions that EdF might follow suit.
Sir John said that the scale of the increases in recent weeks meant that some people this winter would have to choose between turning on the heating, and eating.
He told a lunch organised by the Parliamentary Press Gallery today: “At the moment I do not see how it can be in any way acceptable that with energy prices rising broadly 4 pc in terms of costs that the price for the consumer should rise by 9 to 10 per cent.
“I do not regard that as acceptable at all by the energy companies.”
He said: “I predict this winter Sod’s Law is that we will probably have a very cold winter and it is not acceptable to me and it ought not be acceptable to anyone that many people are going to have choose between keeping warm and eating. That is not acceptable.
“And so if we get this cold spell the Government will have to intervene and if they do intervene and it is costly I for one would regard it as perfectly acceptable for them subsequently to levy an excess profits tax on the energy companies and claw that money back to the Exchequer where their primary."
Sir John said he was worried that a cold winter would trigger more cold weather payments for vulnerable people – and energy firms should pay for them.
He said: “I believe there will be difficulties this winter without action and if there are those difficulties the Chancellor will have my total support if he acted in the way I suggest and impose an emergency impost on the energy companies to claw back the money that we will have to give to people to see the winter in any form of warmth.”
Sir John continued: “I do not regard it as acceptable that they have increased prices by this tremendous amount. Nor do I regard it as acceptable their explanation that they are investing for the future.
“With interest rates at their present level it is not beyond the wit of man to do what companies have done since the dawn of time and borrow for their investment rather than fund a large amount of their investment out of the revenue of families whose wages have not been going up at a time when other costs have been rising.
He added that the Archbishop of Canterbury was “absolutely right” to speak out on the issue, adding: “I thoroughly agree with him.”