Raise taxes to bring down energy bills, British Gas boss tells Reeves
The boss of British Gas owner Centrica has urged Rachel Reeves to raise taxes to bring down energy bills.
Chris O'Shea said the Chancellor must act to prevent hard-up households from shouldering the cost of Ed Miliband's net zero transition.
In particular, he signalled that Centrica would support plans to shift green levies from household bills to general taxation.
Speaking on BBC Radio 4's Broadcasting House, he said: 'The cost of the energy transition is not small.
'It's not because renewables are expensive, it's just because we have an energy system that was designed for a world that no longer exists, so we're having to upgrade the energy system and that requires a quite substantial investment.
'At the moment, the costs for doing that come off consumer bills. There is an option to put that on general taxation and that's something that we would support at Centrica.'
Mr O'Shea acknowledged that the Chancellor was facing significant financial pressures, especially ahead of the upcoming spending review.
However, he said: 'The reality is that we as a country have to pay for the upgrade of the energy infrastructure, either through bills or through general taxation.'
His comments come amid mounting scrutiny over so-called green levies, which are charges added to household energy bills to help fund renewables such as wind and solar.
These are seen as key to supporting Mr Miliband's target of reaching net zero by 2050.
However, critics have accused the Energy Secretary of failing to tackle sky-high energy bills.
The Climate Change Committee, which advises the Government on its emissions targets, has said that green levies should be removed from household costs and shifted either on to gas bills or general taxation.
In a report last month, the quango said it was concerned that high electricity bills were preventing consumers from buying heat pumps and electric cars, which in turn was slowing down the energy transition.
Business leaders have also urged Mr Miliband to scrap green levies as British companies grapple with the highest electricity prices of anywhere in the developed world.
Rain Newton-Smith, the director general of the Confederation for British Industry (CBI), last week warned that the net zero costs were acting as an 'anchor' on UK ambitions.
Household energy bills are set to fall next month after regulator Ofgem said it would lower the price cap by £129.
Nevertheless, high energy costs remain a key political concern, especially as Britain ploughs ahead with a costly transition to renewable sources.
In a sign of tensions over Labour's net zero strategy, Sir Keir Starmer has intervened in controversial proposals to make homes and businesses in the South pay more for power than those in the North.
Supporters of so-called zonal pricing, which is under consideration by Mr Miliband, claim the switch would lead to savings of £52bn for consumers.
Mr O'Shea said increasing energy storage would help to lower prices, but warned that other measures would amount to simply redistributing costs.
He said: 'If we're just talking about reallocating things then the cost has to be met by the country. The question is who in the country meets that cost – is it consumers, is it businesses, is it the taxpayer?'
The comments come a month after Centrica faced a shareholder backlash over Mr O'Shea's £4.3m pay package.
The energy chief was handed a 29pc salary increase, though his total pay was down sharply on the year before, when it ballooned to £8m thanks to a bonus.
Mr O'Shea has previously said it was 'impossible to justify' his pay when millions of households are struggling with their bills.
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