People living in 4m households face a lifetime of decreased opportunity from living in a cold, damp environment as they struggle to pay their energy bills.
Trapped and at the mercy of the ‘big six’ energy firms, millions more, though they may be able to just about afford it, are paying far too much to heat their home.
The Competition Markets Authority (CMA) found that customers are overcharged to the tune of £1.4bn a year, with the average dual fuel standard variable tariff from the big companies costing £1,142 annually.
Prime minister Theresa May made capping energy prices a signature pledge in her party’s manifesto at the last election.
But in a disappearing act so often typical of Tory party policy, May made no mention of the election promise in her Queen’s Speech.
‘Once and for all’?
It wasn’t until mounting pressure, most recently from nearly 80 MPs from her own party, along with Labour and SNP MPs in a letter last week, that the prime minister finally relented.
In her speech closing the Tory Party Conference this week (October 4), May pledged to bring “an end to rip-off energy prices once and for all.”
She said that next week, the government will “publish a draft bill to put a price cap on energy bills.”
What sounded at first like quick and decisive action turns out to be anything but.
Despite indications from ministers that the price cap could go into effect this winter, today (October 6) industry figures have said that this will be virtually impossible.
What’s more, the draft bill will merely give Ofgem, the energy regulator, the power to place price caps on standard variable tariffs – it isn’t actually ordering the body to do so.
Despite May’s promise to “end rip-off energy prices once and for all”, any cap would only be temporary. The plan is to lift the cap once innovations such as smart meters come in, which will purportedly encourage more competition and lower prices.
But evidence has shown that smart meters aren’t the cure-all the prime minister hopes for — if you’re lucky, they’ll save you about £30 a year.
It’s been estimated that the future cap May has promised will save about 12m people on standard variable tariffs about £100 each a year, much less than what Labour has pledged – capping prices to bring annual bills below £1000.
Labour’s shadow business secretary Rebecca Long-Bailey argued May’s latest announcement – one of only two new pledges in her speech on Wednesday – left the country “confused”.
“After pressure from Labour and her own backbenches, Theresa May has finally been forced to recognise that the energy market is broken,” she said. “But her response doesn’t go nearly far enough.
Clear price cap
“It is unclear if responsibility for action has again been passed to OfGem, with no commitment on when or how action will be taken,” Long-Bailey added. “Yet again the country is left confused about whether the Prime Minister will honour her election promise.
“Labour has been clear that we would introduce a clear emergency price cap whilst taking the bold measures needed to reform our broken energy market in the long run such as bringing energy back into public ownership.”
These concrete measures include regaining control of energy supply networkers through the alteration of the National and Regional Network Operator licence conditions and supporting the creation of publicly owned, locally accountable energy companies and co-operatives to rival existing private energy suppliers, with at least one in every region.
Labour will also legislate to permit publicly owned local companies to purchase the regional grid infrastructure, while ensuring that the national and regional grid infrastructure is brought into public ownership over time.
Unite assistant general secretary Steve Turner slammed the prime minister’s energy price cap plans.
“Yet again, the Tories steal straight from Labour’s playbook, but offer a massively watered down proposal that does nothing to help those millions who will face the heart-breaking decision this winter whether to heat their homes or feed themselves,” he said.
“Let’s not be fooled – the lack of clarity over this policy is intentional. It deliberately seeks to give the impression that the government is taking action when it’s only paying lip service to the millions of angry voters who are witnessing first-hand the growing impotence of this Tory government.”
“Unite as well as Labour know that the energy market needs a complete overhaul. Unfettered free markets may serve their shareholders very well, but consumers, the people who actually use their services, get left behind.
“It is a disgrace that one in 10 households are in fuel poverty in the sixth richest nation in the world. We need action now – not a phony energy price cap.”