Emma Lewell-Buck MP: Energy price cap is urgently needed

People are paying too much for energy.
People are paying too much for energy.

It is often said that “imitation is the best form of flattery”. This is why I was delighted when Theresa May decided to ‘borrow’ one of Labour’s manifesto pledges when she promised a cap on rip-off energy bills in the recent Conservative manifesto.

Fast forward a matter of weeks and there was no mention of the cap in the Queens Speech. Instead, the Government has sat on its hands whilst just last week one of the ‘big six’ (British Gas, EDF Energy, npower, E.ON UK, Scottish Power, SSE) energy suppliers, British Gas, announced an increase in electricity prices by 12.5%, meaning that, on average, customers will be hit by an extra £76 per year.

Once again, this Government is happy to line the pockets of the wealthy, allowing the ‘big six’ to make obscene profits at the expense of the British public who have seen their wages stagnate, public services cut and some of their struggling neighbours having to choose between keeping the heating on or eating.

Since 2010, household energy bills have increased by 9.2% in real terms, meaning the average household is £900 worse off.

The companies have blamed the increases on wholesale energy costs, as well as the cost of delivering Government policies such as smart meters. However, the energy regulator Ofgem has stated that it does not see any case for significant price increases where suppliers have bought energy well in advance. It is very clear that these increases aren’t justifiable.

Last year, the Competition and Markets Authority (CMA) concluded an investigation into the energy market. It found that 70% of ‘big six’ customers are on expensive default standard variable tariffs and that households have been paying £1.4 billion a year more for energy than they would if the market was working properly.

Even at the time of Theresa May’s cap pledge, her figures were misleading, she claimed the cap would save 17 million households up to £100 a year. However, Ofgem is currently reported to be considering a safeguard tariff that would only benefit around two million energy customers.

Labour believes that there needs to be an immediate emergency price cap to ensure that the average dual-fuel household energy bill remains below £1,000 per year, while we move to a fairer system for bill payers. In addition, we believe we need to take energy back into public ownership, including by regaining control of energy distribution networks and supporting the creation of publicly-owned, locally-accountable energy companies and co-operatives.

As living costs continue to rise faster than wages, we need a Government that will take action, sadly, when it comes to tackling our broken energy market, as with so many things Theresa May’s Tories are just simply not up to the job.