I have long supported a cap on energy price rises and believe we should go even further to lower bills.
Since 2010, household energy bills have increased by 9.2% in real terms, while this year all of the "big six" energy companies have announced dramatic increases to household energy prices. I do not believe such increases are justifiable.
Last year, the Competition and Markets Authority concluded an investigation into the energy market. It found that 70% of big six customers are on expensive default standard variable tariffs and that households had been paying £1.4 billion a year more for energy than they would have if the market was working properly. It is clear that the market is broken and is no longer doing its best for customers.
During the June 2017 General Election, the Conservative Prime Minister Theresa May pledged to introduce a cap on energy bills that would save 17 million households up to £100 a year. However, while the Government has now published a draft Bill to introduce an energy price cap, it provides no detail on the level of the cap and it is still unclear whether customers will receive he savings they were promised. Furthermore, there is currently no guarantee of when the cap will be introduced. The energy regulator Ofgem has said that it would take five months from the passing of the Bill for it to implement a cap. This would leave households to face another winter of exorbitant energy bills. It is extraordinary that it has taken this long for the Government to act.
At the General Election, Labour promised to introduce an immediate emergency price cap to ensure that the average dual-fuel household energy bill remains below £1,000 per year, while we move to a fairer system for bill payers. If such a cap had been in place since 2010, it would have saved the average customer £1,149 so far and a further £142 per year in future. It also committed to bringing energy back into public ownership, to make it more affordable and accountable to local communities but unfortunately Labour did not win the election.
I will continue to push for further actions to ensure fair energy bills.