Energy News

Labour talks tough on energy suppliers

Wednesday 28 September, 2011

By Martin Fagan

Opposition proposes plans to smash the dominance of the “big six” energy companies as consumers struggle with soaring bills.

With energy companies vilified by consumers hit with inflation-busting price increases and the government pledging to get tough on sharp pricing practices, the Labour opposition has waded in and promised it will “smash the dominance” of the energy giants if re-elected.

At its annual conference in Liverpool, Labour leader Ed Miliband accused energy companies of ripping off customers and called for the development of a high-tech and low-carbon economy.

Miliband said energy companies have “defied the laws of gravity” for too long, as when wholesale prices go up, so do people’s bills but when wholesale prices fall, consumers’ bills do not.

In a separate speech to the conference, shadow energy secretary Meg Hillier pledged that a future Labour government would break up the existing market, which allows the major energy companies not only to generate gas and electricity but also sell it to households.

Instead, all energy production would be fed into a central “pool” and any company would then be free to buy and supply it, which labour said would encourage other companies - even supermarket giants - to enter the market.

Craig Bennett, director of policy and campaigns at Friends of the Earth, said: "Ed Miliband is right to call for an end to the dominance of the ‘big six’ energy firms - their addiction to increasingly expensive fossil fuels has sent our fuel bills spiralling.

"The government must allow smaller players into the market and support businesses to provide our homes with long-term affordable, clean energy,” he said.

Politicians’ tough talk on rising energy prices comes as a new survey revealed that in order to pay rising fuel bills, 71% of Brits will need to raid their savings or use credit cards and overdrafts.

According to the Moneysupermarket.com study, the recent round of price hikes from the “big six” energy providers has added an average 17.4% to gas bills and 10.8% to electricity bills - increasing the average household’s energy spending by £155.75 per year.