Energy Prices: A Fair Deal For The Taxpayer?

Monday 29th May 2017




Rebecca Long-Bailey, Shadow Secretary of State for Business, Energy and Industrial Strategy and Labour MP for Salford and Eccles

Over four million people live in fuel poverty across Britain, while the UK ranks 14th out of 16 for fuel poverty in Western Europe. So the announcement recently of astronomical pay increases for certain energy company CEOs must feel like a kick in the teeth to those families in Britain who will sit shivering tonight because they cannot afford to put on the heating.
For years, a portion of our energy has been imported cheaply from the continent. Theresa May appears to be hurtling towards the hardest possible Brexit deal but the simple fact is that, if she plays fast and loose with energy market access, we risk being barred from cheap power from Europe, without an adequate domestic energy infrastructure plan to plug the gap.
So focused is she on the hardest of all Brexits that, for no discernible reason, we are also leaving Euratom, the European Partnership on Nuclear Trade and Research. The UK nuclear industry is quite rightly raising serious concerns, and industry insiders have warned that nuclear power stations that are operating today may have to be shut down as a result. Who knows what that means for keeping the lights or our bills down?
Indeed, our bills are already rising. Every time the big six energy companies put their prices up, Government ministers complain. We have heard repeatedly how the Government has a “duty to act” or that they are “poised to do something radical” but the energy companies have learnt that if you are a big six energy company, then the Government’s bark is worse than its bite.
Ofgem now confirm that energy bills account for 10 per cent of spending in the poorest households, compared with just 5.5 per cent in 2004, and since December 2016, five of the big six have announced that they are increasing their energy prices even further.
Worryingly, the Institute for Fiscal Studies stated, following this year’s spring budget, that: “On current forecasts average earnings will be no higher in 2022 than they were in 2007. Fifteen years without a pay rise. This is completely unprecedented”. So, it appears that without significant intervention from Government in relation to energy prices, the picture looks bleak for many families in the years to come.
Moreover, the Competition and Markets Authority recently found that customers had paid £1.4 billion a year in “excessive prices” between 2012 and 2015, with those on standard variable tariffs paying 11 per cent more for their electricity and 15 per cent more for their gas than customers on other tariffs. One major bone of contention is the issue of customers being switched automatically onto more expensive tariffs, without their prior knowledge once their lower tariff periods expire.
Following pressure from all side of the House of Commons recently, it was made very clear to the Government that that practice was not morally acceptable; yet despite this, the Government’s rhetoric machine went into overdrive yet again, vowing to act on sky high energy prices but seemingly offering no tangible solutions.
If the Government had real resolve and determination to tackle those issues, and stop those countless families up and down the country from suffering extreme hardship, then they would have acted upon calls from Labour, as far back as 2013, to cap energy prices and embark on a program of reform in relation to the broken energy market. Of course, as we know, they declined to take substantial action and the results of this inaction are clear to see today.
Turning now to the Government’s record on driving energy bills down through energy efficiency measures, we see a similar picture emerge.
The Government pledged to end the misery of cold homes in 2016, but today, with over four million homes still in fuel poverty, they have demonstrably failed and have now moved the goal posts to 2030. The rhetoric surrounding Government proposals again sounds positive and some action taken has, indeed, been positive so far but it is by no means enough.
Only Labour will deliver a fair economy that eradicates fuel poverty, ensuring that domestic energy efficiency is regarded as a hugely important infrastructure priority that generates a long-term industry, creating jobs, income and affordable energy prices.
The people of Britain deserve better than the abuse which they have suffered under this Conservative Government for not having watched the energy market like hawks, and it is time the Government realised that its inaction is not acceptable. Labour will introduce a firm price cap on energy price rises and rip-off tariffs, blocking companies from making extortionate price increases and keeping people safe from high energy bills.

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