GMB Support Labour New Energy Policy To Replace Failed Regulator And Protect Consumers
The Tories are on the back foot and their response will be to try and hold down prices until after the election when prices will continue to rise says GMB.
GMB Today commented on the new announcement by Labour Leader on energy policy. See detailsof announcement in Labour Party press release in Notes to Editors below.
Gary Smith, GMB National Secretary for energy, said "Labour has set the agenda on energy and this is a useful contribution to the debate. The Tories are on the back foot and their response will be to try and hold down prices until after the election when prices will continue to rise.
The real strategic issues have yet to be dealt with. The idea that competition will deliver lower prices is fanciful, driven by ideology and wishful thinking.
The question remains as to how we are going to deal with the challenge of energy prices going up and the likelihood of less competition not more.”
Contact: Gary Smith, GMB National Secretary on 07710 618909 or GMB Press Office: 07921 289880 or 07974 251823.
Notes to Editors:
Labour Party Press release:
Thursday 28 November 2013
***TAPING EMBARGO, NO APPROACHES UNTIL 0001 Hrs Friday 29 November 2013***
Tell Sid: we will make the energy market work for British families and British business
Ed Miliband and Caroline Flint will today launch Labour’s plan for the biggest reform of Britain’s electricity and gas market since the privatisation of the 1980s.
The Energy Green Paper sets out the steps a One Nation Labour government will take while we reset the market during the 20 month price freeze to ensure energy is affordable and available for the long term by:
· Improving competition and transparency in both the wholesale and retail market
· Establishing a new Energy Security Board to plan and deliver the capacity Britain needs
· Replacing Ofgem with a new regulator with real teeth to prevent overcharging
Speaking at Manchester Town Hall today (Friday), Mr Miliband is expected to say:
"Over the past two months we have been talking about how we would take on the Big Six energy companies and begin tackling the cost of living crisis by freezing energy bills for millions of businesses and customers.
"But today I want to focus on the long term change we would bring about while we reset the market during the 20 months of Labour's energy price freeze.
"Change that will make sure electricity and gas is affordable and available for the long term.
"When Britain's gas and electricity was privatised 25 years ago, the government of the time embarked upon a huge advertising campaign boasting about how brilliant privatisation would be - and not just the people to whom they were selling cut price shares.
"You may remember it.
""Tell Sid," they said.
"In the past three years it has become clear to everyone but this government that the energy market is broken. Prices are rising year on year without justification. And Britain is not getting the investment in energy we need to secure supplies for the future.
"Today, a quarter of a century on I have a new message for Sid:
"Labour is setting out our plan to make sure gas and electricity is affordable and available for this generation and generations to come.
"This Green Paper on Energy is a clear and workable plan for the biggest reform of Britain’s energy market since the privatisation of the 1980s.
"We have a new message for Sid:
"We will freeze your bills for 20 months.
"We will reset the market with real competition and proper regulation so that prices are affordable.
"We will secure the investment we need.
"Today’s Green Paper on Energy sets out how the energy market is failing consumers and failing Britain. And it explains how a One Nation Labour Government will secure energy which is affordable and available.
"We will stop you being ripped off and, together, we will power Britain into the next century."
1. The old rules for competition have failed:
An uncompetitive market is dominated by the Big Six energy firms all of whom evolved from the old state-owned monopolies – showing that the rules have not allowed new competition into the system.
Independent experts say that lack of competition in the retail market has resulted in overcharging and consumers paying £3.6bn more than they need. Greater competition in the retail market would have kept costs down for a typical household by more than £100 a year.
And this is not the only way businesses and families are suffering because of a rigged market. The Big 6 are making consumers foot the bill for the way they pay over the odds - by as much as 40% - for the energy they sell on. Often this is through back-door deals between different arms of the same company.
The measures being set out today to improve competition and fix this broken market will put downward pressure on bills and keep them affordable in the long term.
Labour will improve competition and transparency and put downward pressure on bills:
· preventing power generation companies doing exclusive deals with their retail arms
· allowing new entrants into the market to bid openly for pooled supplies
· simplifying tariffs so consumers can compare prices in the market
· delivering value for on all policy costs which impact on bills
2. The old rules have failed to deliver the investment we need:
We need £200bn of investment this decade - £20bn each year. But the energy industry delivered less than half of this (£8bn a year) between 2007 and 2011.
Labour will establish a independent Energy Security Board modelled on the OBR to co-ordinate with government, the National Grid and regulator to set out and implement a timetable for building the capacity Britain needs.
Labour will also
· give the Green Investment Bank the power to leverage new investment
· set a 2030 decarbonaisation target
· take forward the system of contracts for difference to encourage investment
3. The old rules of regulation have failed to protect consumers and businesses:
Despite repeatedly finding that the energy market is letting down customers, Ofgem has failed to start putting things right. In 2011 it admitted that 12 of these had got worse or stayed the same, but still took no real action.
Labour will create a tough new regulator with powers to:
· order firms to pass on wholesale savings to the consumer in lower bills.
· protect the interest of existing and future consumers
· ensure they get fair value from the market
4. The Green Paper is attached.
For more information and for more details of tomorrow's event in Manchester, please contact the Labour Party press office on 020 7783 1393.
All news releases are issued on a check against delivery basis and any portion of the speech not actually delivered should be regarded as private and confidential.