Energy Advice Line calls for energy summit as Labour’s price freeze plans are attacked
The Energy Advice Line, who compare business energy prices, have called for an all-party energy summit after Labour’s plans for an energy price freeze were condemned in an independent analysis. Julian Morgan, Managing Director of the price comparison, switching, and advice service for energy consumers, said all political parties had failed to come up with a workable strategy to deliver consumers a reliable, affordable energy supply in the long term.
Mr Morgan said it was time all parties involved in the energy market came to together to devise a consensus policy that placed consumers and affordable energy at its centre. “Neither the government nor the opposition is coming up with a workable energy strategy that will deliver affordable and reliable supplies of energy into the future,” he said. “Instead of policy gimmicks aimed at securing votes at the next election, UK consumers need a strategy that has cross-party support as well as the backing of suppliers.”
“The important issues are being lost in the point-scoring and consumers and suppliers are fed up. We’re urging all parties that have an interest in reforming the UK’s energy market to get together to put together a proper energy strategy. The stakes are too high for energy to be used as a political football. It’s time political parties, along with suppliers, consumers and the regulator, worked together and not against each other.”
Labour’s pledge of a 20-month energy price freeze if it wins the next election has been highly criticised in a damning assessment by Cornwall Energy, an independent energy markets consultancy. Cornwall has found that the pledge was likely to see suppliers implement pre-emptive price hikes of £80 per bill, leaving gas and electricity consumers worse off. It was also likely to put small energy suppliers out of business.
Co-operative Energy, a small supplier that initially endorsed Labour’s plans, has also partially withdrawn its support. It now wants a series of changes to the policy, warning that it’s survival could depend on it. Cornwall’s analysis found that the proposed cap on prices would create extra costs for suppliers, which would almost inevitablybe passed on to consumers in advance. “If suppliers are not able to adjust their prices, there is a risk they will go out of business,” according to Cornwall’s managing consultant Nigel Cornwall. “Or, to sensibly manage the risk of those higher costs, they will need to increase their prices ahead of a price freeze by up to £80. Neither of those outcomesis good for consumers.”
Mr Morgan said a summit would not only provide a forum for politicians to develop policy, but to shake up the role of the regulator, OFGEM.
“The efficacy of OFGEM as a watchdog is questionable and its remit needs an overall,” Mr Morgan said. “A regulator needs real teeth to enforce policy, otherwise policy is meaningless. OFGEM should be doing its job pulling suppliers into line if they don’t provide simple, clear and transparent billing to make switching suppliers as easy as possible. At the moment it is not succeeding in this role.”