Four years ago I said that the energy market was broken and people were getting ripped off. Over the last four years the Labour party set out plans to reform the energy market and argued inside Parliament through Opposition Day debates and questions, and outside through the work of our members, that action needed to be taken.
Today, with the publication of the Competition and Markets Authority’s report into the energy market, thousands of Labour members who campaigned tirelessly against rip-off energy prices, and many more people who signed our petition and supported our campaign, will feel vindicated.
The Tories consistently refused to take action in the last five years even though they knew that the energy market wasn’t working. They voted down our motions and rejected calls for action from frustrated households, despite David Cameron promising to do force the energy companies to pass on price falls when he was in opposition. One of Amber Rudd’s first moves upon becoming Secretary of State for Energy and Climate Change was to write to the energy companies asking them to cut their prices. Neither the letter nor the responses have been published but one thing is clear - a working market doesn’t need a letter from a Secretary of State to set prices at the right level. What it needs is the right regulation to facilitate proper competition for customers - something the CMA makes clear is not happening in this instance.
The Competition and Markets Authority this morning confirmed what millions of households and businesses already knew. Year on year they have been overcharged for their energy, and the Big Six have charged customers around 5% more than they would have got away with if the market meant they had to compete properly for customers.
This report would not have even happed were it not for the spotlight the Labour Party put on the energy market – reflecting the frustration of millions of households and businesses. And no wonder - they increased by over £300 over the course of the last parliament, but the government did nothing to address the problems in the market. When wholesale costs began to fall, this was barely passed on at all to the consumer. Last week we found out that wholesale costs are at a five year low, yet still no significant cut has been made to bills. The consumer group Which? have estimated that further cuts of up to 10% in electricity and gas bills are possible– saving families up to £2.5bn this year.
But the report in and of itself is not enough – consumers need action. The Conservative Party manifesto explicitly said they would back the recommendations of the CMA report, but today Amber Rudd has only committed to considering the report and responding soon, while the Prime Minister’s spokesperson has said he is opposed. It looks as though they are backtracking because they are scared of the political consequences of backing a safeguard cap on prices while the market is reformed.
But consumers have an ally in me. My campaign to end rip off energy bills goes on.
This article first appeared in Politics Home.