Miliband pledges price cut powers for Ofgem
Miliband said suppliers that failed to pass savings from wholesale price cuts on to consumers would be forced to reduce their prices, and potentially face financial penalties. Amendments would be fast-tracked within weeks of gaining office, to end overcharging by the Big Six.
The Labour leader has previously pledged to introduce caps on energy bills, and a price free until 2017, which would amount to annual savings of £120 per customer; the new proposal would almost double that saving.
Miliband claimed that despite wholesale energy prices falling by an average of 20 per cent over the past year, the Big Six had not passed on savings to consumers, reducing gas bills by only 1-5 per cent; electricity bills have not been cut at all.
“What better evidence do we need of the chronic overcharging, the broken market and the ripoffs being faced by millions of families and businesses across Britain?” Miliband said.
“The costs of energy are tumbling down, not because of anything the government or the Big Six have done, but because of global changes in oil and gas supply. Even the PR guys for the big six – 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.”
While Miliband’s attacks on key government figures was incendiary, Osborne has previously pledged to monitor the Big Six “like a hawk” – and, in November last year, Treasury chief secretary Danny Alexander wrote to every major supplier to demand they passed on the benefits of falling wholesale energy prices to customers immediately.
But the firms say they have to purchase their oil many years ahead, and details of their hedging strategies have to be kept commercially confidential. They argue that the cost of fuel is only half of their overall costs, and does not take into account network expenditure.
As reported by Your Money last month, the Competition and Markets Authority has estimated that 95 per cent of dual fuel customers on standard variable tariffs could have saved between £158 and £234 annually if they’d switched provider at any point in the last five years.