Labour leader, Ed Miliband, will today announce that the Labour party will give the energy regulator (Ofgem) the legal duty to ensure prices are fair and the power to cut bills this winter. The new legislation is being drafted to put an immediate end to the overcharging by the Big Six energy firms which consumer groups estimate is costing families and businesses £2.5 billion a year. Labour say that the Coaltion Government has admitted there is a problem with consumers being ripped off, but it has refused to act against the big energy firms.
Over the last year wholesale energy prices have fallen by an average of 20 per cent but the Big Six energy firms have reduced gas bills by a meagre one per cent to five per cent - while electricity bills have not been cut at all.
Labour has already declared that it would freeze prices – so they can only fall and not rise - for 20 months while the energy market is reset. But the new legislative plans being announced today goes further by setting a clear timetable for changes so that consumers pay fair prices this coming winter. In one of the first Bills of the new Parliament, Labour will give Ofgem a legal duty to review prices by the autumn – and the power to order price reductions in time for the winter.
The consumer group Which? says that further cuts of up to 10 per cent in gas and electricity bills should be made this year. Such a reduction would save the typical family at least £100 this winter, on top of the savings they will get from Labour’s plan to freeze gas and electricity bills until 2017. Mr Miliband’s announcement comes as he prepares to unveil the fifth pledge on Labour’s five-pledge card at its pre-election Spring Event in Birmingham on Saturday.
Ed Miliband is expected to say: "Britain can only succeed when working families succeed. Our economy is at last growing again. But the vital link between the wealth of our nation and working families has been broken. We live in a country where you can’t fulfil one of the foundations of family life - keeping your home warm – without being overcharged by one of the big energy firms. It’s been 18 months since I announced the next Labour government would freeze energy bills – so they can only go down and not up – until 2017 while we reset this broken market. In those months we first heard loud protests from the Big Six energy firms and their PR men in the Government. Then we saw prices continue to rocket upwards, unchecked by the Government.
Mr Miliband is also expected to say: "Now something else is happening. The costs of energy are tumbling down, not because of anything the Government or the Big Six energy firms have done, but because of global changes in oil and gas supply. The cost of energy to the Big Six firms fell by 20 per cent. But the sky-high prices that families pay have only fallen by a fraction of that. Gas bills have declined by between one per cent and five per cent. Electricity bills haven’t fallen at all. What better evidence do we need of the chronic over-charging, the broken market and the rip-offs being faced by millions of families and businesses across Britain? "
Ed Miliband is expected to conclude by saying: "Even David Cameron and George Osborne admit this is a problem. But they have not acted and the whole country knows why. It’s because they will never stand up to powerful interests and they never stand up for you. My government will be different. We will stand up to the big energy companies. We will go ahead with our price freeze. We will reset this broken energy market for the long term so that proper competition and regulation can ensure fair prices are charged in the future And we will go still further. We will pass a law to ensure falling costs are passed on to the consumer this winter; a law giving the regulator a legal duty to ensure fair prices this winter; a law giving the regulator the power to cut prices and keep homes warmer this winter."
Ed Miliband is expected to say: "Britain can only succeed when working families succeed. Our economy is at last growing again. But the vital link between the wealth of our nation and working families has been broken. We live in a country where you can’t fulfil one of the foundations of family life - keeping your home warm – without being overcharged by one of the big energy firms. It’s been 18 months since I announced the next Labour government would freeze energy bills – so they can only go down and not up – until 2017 while we reset this broken market. In those months we first heard loud protests from the Big Six energy firms and their PR men in the Government. Then we saw prices continue to rocket upwards, unchecked by the Government.
Mr Miliband is also expected to say: "Now something else is happening. The costs of energy are tumbling down, not because of anything the Government or the Big Six energy firms have done, but because of global changes in oil and gas supply. The cost of energy to the Big Six firms fell by 20 per cent. But the sky-high prices that families pay have only fallen by a fraction of that. Gas bills have declined by between one per cent and five per cent. Electricity bills haven’t fallen at all. What better evidence do we need of the chronic over-charging, the broken market and the rip-offs being faced by millions of families and businesses across Britain? "
Ed Miliband is expected to conclude by saying: "Even David Cameron and George Osborne admit this is a problem. But they have not acted and the whole country knows why. It’s because they will never stand up to powerful interests and they never stand up for you. My government will be different. We will stand up to the big energy companies. We will go ahead with our price freeze. We will reset this broken energy market for the long term so that proper competition and regulation can ensure fair prices are charged in the future And we will go still further. We will pass a law to ensure falling costs are passed on to the consumer this winter; a law giving the regulator a legal duty to ensure fair prices this winter; a law giving the regulator the power to cut prices and keep homes warmer this winter."
