Ed Miliband’s price freeze – what it means for you

Labour have pledged a price freeze  on energy bills for at least 20 months if they get elected at the next election.  This would cap bills from May 2015 until at least January 2017.

(The short answer to what we think you  should do – grab your energy bills and CHECK YOU ARE ON A GOOD FIXED TARIFF).

Energy bills are going up NOW – British Gas, SSE (Swalec, Southern Electric, Atlantic, Scottish Hydro)Pioneer, Ebico, Loco2 have all announced price rises for this winter – don’t wait for Ed’s price freeze – SWITCH NOW!

Miliband has pledged to “reset” the UK energy market with 

What you should do

Fix your gas & electricity NOW

 

  • a 20 month price freeze
  • Break up the Big Six energy suppliers (British Gas, SSE, Scottish Power, Eon, nPower and EDF) so that their energy generation businesses are separate from their supply business.  These 6 suppliers control over 98% of the domestic market
  • Scrap Ofgem – the UK energy regulator.  Labour leader, Ed Miliband has consistently maintained that Ofgem do not have the muscle to stand up to the big six energy suppliers
  • Milliband has written to the big six suppliers telling them that “You and I know that the public have lost faith in this market. There is a crisis of confidence. We face a stark choice. We can work together on the basis of this price freeze to make the market work in the future. Or you can reinforce in the public mind that you are part of the problem not the solution.” (you can see the full text of the letter below)

We welcome this development!

Just for the record we agree that the UK energy market is not working in the interests of UK consumers and welcome actions that will help consumers get a fairer deal.  That’s why we set up thePeoplesPower Community Interest Company.

The most important reason we support this policy is that the pledge to  separate the energy generation side  of the Big Six from their residential supply business.  This will help get some real competition in the market that will help keep prices in check in the long term.  In particular this measure should help smaller suppliers and new suppliers compete more effectively.

Fuel Poverty kills

  • 27,000 excess winter deaths
  • 21.5% estimated to be caused by cold homes
  • 5,800 deaths caused by cold homes
  • Mostly over 65s

Help someone switch their energy

Also by making our dysfunctional energy market an election issue hopefully all political parties will compete with each other in resetting the balance of power in favour of consumers.

Ok so what does this mean for me?

If you are not already on a good fixed tariff, we think you should switch to a fixed tariff as soon as possible.  

In a way Miliband’s “price freeze” headline is a bit of a red herring – YOU CAN ALREADY FREEZE YOUR ENRGY PRICES  to 31st March 2017.  That’s 4 months longer than labour’s pledge.

You can see the 2 longest fixed deals – from EDF and npower  on our switching calculator (opens in a new window)

In a way our advice is independent of the price freeze – One of the big six, SSE (which also trades as Southern electric, SWALEC, Scottish Hydro) has announced a price increase.  In the past when one of the main suppliers increases prices the rest all follow suit within a few months.

We think it is highly likely that other suppliers will follow suit and increase their prices over the coming weeks.  Hence our advice to check you are on a good fixed tariff.

Why use our switching calculator?

We use a confidence code approved switching engine to ensure that estimates are accurate.

We are also offering £10 cash back per fuel switched on any switches irrespective of whether someone calls the helpline  or uses the internet service. We think we are the only people to do this.

We pay the cash back from the commission we would otherwise receive – though it is worth noting that the cashback often takes 8 weeks to arrive with you after your switch has gone live).

We give cashback for telephone switches as we know that many people struggling with their energy bills don’t have access to the internet.

http://switch.cheaperenergytogether.org/ or  0800 781 5937 or 01622 845 489

– there are a number of tariffs from suppliers that allow you to fix the price you pay

 How do I choose which tariff – there are too many!

We are advising people to choose a fixed or capped tariff.

We have answered a few of the common questions we have had like (October 2013) Why are you advising people to switch to a fixed tariff?I am on a fixed tariff, should I switch now?There are too many choices – how long should I fix for?

Switch Now!

 

Isn’t Miliband’s Price Freeze Pledge going to mean the lights will go out?

There have been a few reports in the media (Daily Mail, Daily Telegraph and from Energy UK – the energy industry mouthpiece) that say that if Labour wins the election and introduces a price freeze then the lights will go out and we will have regular power cuts.

This is possible – there has been underinvestment in the UK’s energy industry for many years with significant numbers of power stations closing, including some of our old nuclear power stations.  Very few new power stations have been built.

Paul Lewis summed this up on twitter “In 2008 banks threatened to close cash machines and got £1tn. Now energy companies threaten to turn off the lights if govt freezes prices.”

The implication is that if we don’t allow energy suppliers to make as much profit as they want they won’t invest in new infrastructure and we will get power cuts.  However energy suppliers have been making billions of pounds of profit every year – but have not been investing in infrastructure anyway.

In short, this is a threat to Government to try to insure that new regulations do not squeeze energy supplier profits.

 

 

 

Switch Now!

 

Miliband Letter To Energy Firms

Ed Miliband’s letter to energy company bosses.

In recent years we have discussed the need to rebuild public trust in the energy market many times. I think we all agree on the importance of that objective if we are to build a market that both delivers for consumers and underpins the investment in future clean energy capacity that we all want to see.

Our intention is to now reset the market that has consistently failed to secure the confidence of the public or the investment Britain needs. Doing that requires two steps. First, it means legislating to build competition and transparency into the market, with a trusted regulator standing behind the system. Second, it means ensuring that in the time it takes to put a new system in place, up to the start of 2017, we ensure the prices paid by consumers do not rise.

A fairer market for consumers must be matched by a better deal for investors. So we have also committed to set a 2030 power sector decarbonisation target; hold to the system of contract for difference in the Energy Bill; create an Energy Security Board with responsibility for identifying our energy needs and providing a clear framework to deliver this; and give the Green Investment Bank borrowing powers to support investment.

We believe that this framework will create certainty and attract the range of domestic and international investors we need in the years ahead.

I appreciate that you will not welcome all aspects of this package. But it is my firm view that without resetting the market we are not going to see the public consent that is required to underpin the scale of taxpayer backed guarantees for which you have argued.

I am prepared to make the case for sharing the risks of such investment, but that must be against the backdrop of a market that customers believe works for them.

You and I know that the public have lost faith in this market. There is a crisis of confidence. We face a stark choice. We can work together on the basis of this price freeze to make the market work in the future. Or you can reinforce in the public mind that you are part of the problem not the solution.

This is a genuine opportunity to reset the energy market in the interest of consumers and investors. Caroline Flint and I stand ready to work with you on these proposals in the months ahead. I look forward to continuing to discuss them with you.

Yours sincerely,

Rt Hon Ed Miliband MP

 

Categories: Blog, Lower energy bills, and Uncategorized.