Have you noticed that the price of petrol has fallen at the pumps? This is because the wholesale price of oil has fallen. Petrol companies have been lowering prices as the price they pay for oil has fallen. But what about gas and electricity companies? They were quick to hike bills by 20% when wholesale prices rose making huge profits in the process. So, why haven't gas and electricity prices fallen too?
That's the topic of a debate in the House of Commons today. Labour is calling on the Government to back measures that would enable the energy regulator, Ofgem, to force energy companies to pass on savings in the wholesale price of energy onto consumers. When this was last debated in June 2014, Plymouth's Tory MP, Oliver Colvile, voted against the measure.
Time after time when it comes to energy Mr Colvile stands up for the energy companies and not people in Plymouth who are struggling to pay higher and higher energy bills. If I were in his place today I'd be voting for the savings to be passed onto consumers. With energy bills forming such a large part of the cost of living crisis it is simply staggering that Mr Colvile and the Tories still stand by the big energy companies at the expense of bill payers. It is time that changed.
If Labour wins in May we will freeze energy bills, break up the big energy companies and give the regulator more powers so they can take on the big six energy companies. The Tories, on the other hand, have done nothing about rising bills.
The press release I've sent to the Herald is below. Let me know what you think about energy companies not passing on price falls to customers.
13 January 2015
LUKE CHALLENGES TORY MP OVER RIP-OFF ENERGY BILLS
Luke Pollard today challenged Oliver Colvile to back fast track legislation giving Ofgem the power to cut energy bills, when it is debated in Parliament on Wednesday.
Backing Ed Miliband’s pledge to give the energy regulator the power to force energy companies to cut their prices when wholesale costs fall, Luke has called on Mr Colvile to abandon his previous opposition to reducing energy bills and help thousands of households in Plymouth.
The latest move underlines Labour’s determination to put living standards front and centre of the debate about the future of Britain’s economy in this election.
Luke Pollard, said:
“Thousands of people in Plymouth have been ripped off by the big energy firms who never seem to pass on savings to customers. In the last year, wholesale energy costs have fallen by between 9 per cent and 20 per cent but no supplier has reduced the price of their standard tariff.
“On Wednesday Mr Colvile will have the chance to help all those families who have been ripped off by the energy companies under this government. I want him to abandon his previous opposition to fixing our broken energy market and vote to bring in new powers for the regulator to cut bills and force energy firms to pass on savings to consumers.”
Mr Colvile voted against plans to force energy companies to pass savings onto customers in June 2014.
Caroline Flint MP, Labour’s Shadow Energy and Climate Change Secretary, said:
“The next Labour government is committed to making big changes in our energy market: freezing energy prices until 2017 so that bills can fall but not rise, resetting the market and bringing in a tough new regulator to stop rip-offs in the future. But consumers need action on energy bills now. This can begin on Wednesday with a vote in the House of Commons on fast track legislation.
“This zombie Government has had no new meaningful legislation for months. But, with this vote Parliament can require the government to bring forward fast-track legislation. It would mean we could still do some good before Parliament is dissolved before the General Election.”
Notes to Editors:
1. Labour will be holding an Opposition Day this coming Wednesday on a motion requiring the Government to introduce fast-track legislation giving Ofgem the powers to cut bills when wholesale prices fall but the energy firms do not cut bills for customers.
2. Ofgem estimates that the supply margins of the Big Six have doubled in the last twelve months, increasing from 4% (£49) in 2013 to 8% (£105) today. This is only an estimate, as the companies will not publish their financial reports until next summer,but is further evidence that when wholesale energy costs rise the prices customers pay go up and when those costs fall customers’ energy bills do not fall to keep track.
3. Ofgem has referred the energy companies to the Competition and Markets Authority, stating: “We found that suppliers do not adjust their prices as quickly when costs fall compared to when wholesale costs rise… This asymmetry has become more pronounced than when Ofgem performed a similar exercise in 2011.”
4. In order to ensure that families are not ripped off, the next Labour government will give the regulator a legal duty to ensure that reductions in wholesale costs are passed on to consumers. This proposal was in Labour’s Green Paper (paragraph 2.25) on reforming the energy market, published in November 2013:
5. The last time this was debated in the House of Commons, Mr Colvile voted against giving the regulator the power to cut prices when wholesale costs fall.