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Letter – Stop Fuel Bills Rising and Profits before People

Wednesday 2 April 2014

In response to Estelle Cano (31/03/14) and David Murray (01/04/14) helpful contributions, they should take encouragement from Labour’s commitment to stop fuel bills from rising, reversing profits before people, by reforming the energy market. They clearly agree that the energy market isn’t working for ordinary families and businesses. This is why Labour has tabled a Motion in the House of Commons today, but I doubt current local Lib Dem MP’s will support it.
The launch of a full market investigation is a clear admission that Britain’s energy market is broken and that radical action is needed. While this investigation is happening and the energy market is being reformed to make it more transparent, competitive and accountable, consumers should be protected from any more unfair price rises by freezing energy bills until 2017.
The back-tracking of the Coalition and major energy companies vindicate everything Labour has been saying for the last two years on the dysfunctional nature of the energy market. It is unsurprising that people don’t trust the industry and won’t until the market is clear fair and transparent.
We will reset the market by doing 3 things:
• Getting energy companies to separate the parts of their businesses that generate energy from the parts that supply to the public with different licenses and separate operations;
• Requiring all energy companies to trade their energy in an open market by selling into a pool;
• Introducing a simple new tariff structure so people can compare prices.
Labour will create a tough new energy watchdog with new powers to police the market, including the power and remit to force energy companies to cut their prices when there is evidence of overcharging, for example when wholesale costs fall and the market fails to respond. Our reforms to make the market more transparent (‘the pool’ and separation of generation and supply) will allow the regulator to assess when action is necessary.
We will take immediate action upon entering office to freeze prices until January 2017 when our reforms start kicking in. This will save the typical household £120 and the average business £1,800.
Labour will introduce legislation immediately on entering office to give the Secretary of State the power to modify energy suppliers’ licences to require energy companies to freeze their prices. The freeze would stop prices rising, but they could still fall and consumers could still switch tariffs to cheaper products.
Rising fuel bills are contributing in a major way to the cost of living crisis. This is why better regulation is needed, putting people before profit.

Emily Brothers
Labour Parliamentary Candidate
Sutton and Cheam

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