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£175m diesel power subsidies 'will mean bills increase'

Published 07/01/2016

Ms Rudd said the bills increase would be
Ms Rudd said the bills increase would be "only a few pounds"

A Government decision to award £175 million in public subsidies to support diesel power will mean family energy bills go up, Energy Secretary Amber Rudd has admitted.

The Government is paying out the cash as part of its capacity market scheme which provides payments to power plants so they are on stand-by to start generating if needed to ensure the lights stay on.

But the shadow energy secretary Lisa Nandy today demanded to know what the impact on bills will be.

Speaking during energy questions in the House of Common she said: "Last month the Secretary of State agreed to hand out hundreds of millions of pounds in new public subsidies to diesel and coal power generators through her capacity market scheme.

"Can you tell the House how much family energy bills will rise as a consequence?"

The Energy Secretary replied: "The capacity market is specifically designed to ensure that their energy security is not negotiable.

"Energy security is something that this Government takes very seriously and because of the lack of investment in energy infrastructure over the past decades we have needed to make sure the capacity market is in place to ensure that we don't have any problem at all with energy security.

"Diesel will form a part of the future but only in very small amounts.

"Let us remember it is there as back up and will be switched on occasionally when it is needed.

"The addition of the capacity market to people's bill will be a matter of a few pounds."

Ms Rudd went on to say that the capacity market is needed "because of Labour's woeful under-investment in infrastructure under their government".

When pushed by Ms Nandy on exactly how much bills will rise, Ms Rudd said: "It is a few pounds.

"It will be under £10 and we will ensure that energy security is never going to be a question under this Government."

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