`Brexit’ Risks $700 Million Shock to Energy Bills, Rudd Says

A U.K. vote to leave the European Union might force gas and power bills up by 500 million pounds...

A U.K. vote to leave the European Union might force gas and power bills up by 500 million pounds ($700 million) a year, Energy Secretary Amber Rudd plans to say on Thursday, warning that a “Brexit” would threaten Britain’s energy security.

“If we left the European internal market, we’d get a massive electric shock because U.K. energy costs are likely to rocket,” Rudd will say, according to remarks e-mailed by her office. “However you look at it, an internal energy market helps to guarantee our energy security, which is the bedrock of our economic security. I’m not willing to play fast and loose with either.”

Rudd’s comments buttress arguments by Prime Minister David Cameron’s government that Britain is “stronger, safer and better off” within the 28-member EU as voters prepare for the June 23 referendum that polls indicate may be tight. Cameron and the bulk of his ministers have batted away accusations of scaremongering by Brexit proponents, while spelling out the financial costs and risks to trade and security of a “Leave” vote.

Rudd will say that by working within 28-nation bloc, Britain has more bargaining power to diversify sources of gas and drive down prices. She’ll also raise the specter of Russian President Vladimir Putin using gas supplies as “a tool of foreign policy.”

‘Political Pawn’

“We can’t let our energy security be hijacked as a political pawn to bring Europe to its knees,” Rudd is due to say. “By working together in the European Union each member state can stop this becoming a reality. As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis. We can use the power of the internal market to source gas from elsewhere.”

Suggested articles

Forex Trading Disruptor Sees Growth Thanks to Offshore Regulated StatusGo to article >>

Rudd is due to speak at 2 p.m. local time at the BritNed interconnector near Rochester in southeast England. The project, a joint venture between National Grid Plc and TenneT Holding BV, is a new 1-gigawatt electricity link between Britain and the Netherlands that allows power to flow across the North Sea.

Rudd will also note that investment in U.K. utility projects from elsewhere in the EU totaled 45 billion pounds in 2014.

“Being in the EU helps us attract billions and billions of pounds of investment in our energy system and supply chain,” she will say. “Taken together, this investment helps support 660,000 jobs in the U.K.’s energy sector. Does anybody really think all of that investment would continue if we left the EU, and with no extra costs?”

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net. To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Eddie Buckle, Tony Czuczka

By: Alex Morales

©2016 Bloomberg News

Got a news tip? Let Us Know