Hague blames Labour for high fuel costs
“One of the problems we’ve had with energy companies,” said Hague, “is the Labour party saying they would freeze bills. Which, of course, doesn’t encourage the companies to cut their bills. They think they’re going to be frozen at an unsustainable rate in the future.”
Labour responded that its price-freeze policy does in fact allow prices to fall. “Recent price cuts in some energy bills shows that you can freeze prices to stop them rising and still cut them when wholesale costs fall,” a party spokesperson said.
“The next Labour government is committed to making big changes in our energy market: freezing energy prices until 2017 so that bills can fall but not rise, and giving the regulator the power to force energy companies to cut their prices and pass on the full savings from wholesale cost falls to all consumers.”
Hague’s declaration follows the release of a report by Which?, revealing that a failure to pass on energy savings to customers as soon as possible cost the UK public £2.9bn last year – the equivalent of £145 a household on standard energy tariffs.
The report also concludes that there was no financial justification for increases to gas and electricity prices in late 2013 – and that recent cuts in “big six” standard gas tariffs (as previously reported by Your Money) should have been as high as 10.3 per cent if they were to reflect with wholesale energy cost reductions.
Which? has submitted its report to the continuing Competition and Markets Authority investigation into the energy market.
“They now need to explain to their customers why bills don’t fall further in response to dropping wholesale prices,” Richard Lloyd, Which? executive director, said. “Energy bills are consistently the top consumer concern so it’s about time people got a fair deal. Consumers will now look to politicians of every party to set out how they’ll deliver fair and affordable energy prices in future.”