NRFC Chair’s letter to Ed Miliband in response to announced plans to freeze UK energy pricesRt Hon Edward Miliband MP Leader of Her Majesty’s Official Opposition House of Commons London, SW1A 0AA
27 September 2013
Dear Mr Miliband
Re: Energy Bill Freeze
I am writing to follow up to your Leader’s speech announcement and pledge to freeze energy bills and reform the energy regulator, Ofgem, in 2015.
As the major anti fuel poverty campaign in the UK, your proposals come as a welcome and positive shift in the direction of travel on energy policy. However, with year on year energy price increases in excess of 10%, since 2008, and more than five million households already forced to choose between eating and heating this winter, we remain concerned that they will have far too little effect too late for most hard pressed families.
Instead, with bills expected to rise by between ten and fifteen percent this winter alone, we would urge you to consider supporting a national programme of investment in efficient energy and housing infrastructure. In this way the Labour Party policy position will work to provide hard-pressed households with a long-term mechanism by which to manage their energy costs.
An energy efficiency programme could be funded through a mix of energy company contributions, recycling of carbon taxes and investment by pension funds. Simple efficiency measures, such as insulation and LED lighting can help to reduce energy bills by up to 25%, although any such programme would also need to include training for local people who can help their neighbours, friends and family to better understand how to reduce their energy demand.
Such a programme could also enable the development of locally owned energy grids, which would replace the outdated and expensive grid system that we all currently pay for through our energy bills.
Any such intervention would depend on route and branch reform of the energy regulator Ofgem, who for too long now have allowed the energy industry to create more and more demand for energy amongst our consumer base. An energy regulator, which was on the side of consumers, would:
(i) put in place measures that help consumers to reduce their demand
(ii) increase transparency – for example, removing the confusion that exists around standing charges and unit prices
(iii) ensure that fixed costs (transmission, distribution, balancing & settlement and debt) are fairly priced and are passed on to all consumers not just those who are the most vulnerable in society
Taken together, this programme of reform would adopt best practice that exists in other western countries, such as the USA and Germany.
Labour’s bold announcements in Brighton provide a welcome attack on an energy sector and regulator who have colluded for too long to maintain revenues within the energy sector at the expense of consumers. The NRFC would be happy to support the further development of these proposals and, in particular, to help with the design of a route and branch review of investment in energy infrastructure, as was announced on Monday by Shadow Chancellor, Ed Balls.
We very much hope that it will be possible to input to policy thinking and development to further focus on the fuel poor. I very much hope that we can be in touch and I look forward to hearing from your office in due course.
Chair, National Right to Fuel Campaign
Rt Hon Ed Balls MP, Shadow Chancellor of the Exchequer
Mr Chuka Umunna MP, Shadow Secretary of State for Business, Innovation and Skills
Rt Hon Caroline Flint MP, Shadow Secretary of State for Energy and Climate Change
Rachel Reeves MP, Shadow Chief Secretary to the Treasury
Luciana Berger MP, Shadow Minister (Energy and Climate Change)
Tom Greatrex MP, Shadow Minister (Energy and Climate Change)