I followed Ed Miliband’s key speech this week with great interest. After sketching out Labour’s plans for helping households with their energy bills at Labour Conference, he fleshed it out further, showing us just how important it was to tackle the outrageous never-ending price rises from the energy companies.
Recently, we saw new figures that reveal that since 2011, the cost of energy has risen at an average rate of 1.6% a year but the Big 6 firms have increased prices by an average of 10.4% a year. And more than half of this rise in bills has gone straight to the Big 6. This is yet more evidence that the market is broken and that ordinary families and businesses are being ripped off.
First Utility, one of the small suppliers, produced data on the wholesale prices they pay based on their one year hedging strategy. The statistics are very revealing, to say the least.
In these graphs, you can see that the wholesale prices these firms pay have remained relatively stable.
Source: First Utility, internal financial data. 1 Year Forward Electricity and Gas Wholesale price, 2008-2013. Data published in Financial Times on 25 October 2013, http://im.ft-static.com/content/images/08a7ae72-3d85-11e3-b754-00144feab7de.img?width=1197&height=824&title=&desc=
Whilst the cost of energy has risen by an average of 1.6% a year since 2011, the Big 6 have hiked prices by a shocking 10.4%.
Analysis, confirmed by the House of Commons Library, shows that for the typical household, this means that the increase in wholesale costs only accounted for 7% of the total rise in bills (£16), network costs 24% (£54) and policy costs 14% (£30). Over 50% (£114) of this rise went back to the Big 6 to cover rising supplier costs and profits.
People in my community see energy prices as one of the biggest squeezes on living standards. Since David Cameron has been in Downing Street, prices have risen faster than wages in 38 out of 39 months and energy bills have gone up by almost £300. When the price of energy increases energy companies pass this on but when it drops consumers don’t see their bills fall.
Ed Miliband has shown that only Labour is on the side of working people. David Cameron has never worried about being able to pay an energy bill – but we are making sure that if we enter Government in 2015, more people will have money put back into their pockets instead of the energy companies’ bank vaults. David Cameron can’t deal with the cost of living crisis because he stands up for a privileged few, not for ordinary families. David Cameron has cut tax for people on over £150,000 a year while raising it for everyone else.
It simply isn’t good enough, and I am backing Ed Miliband’s move all the way.