Energy Prices: Information and Labour Rebuttal Materials

Sheffield Lib Dems have received notice of a Labour motion on energy prices and prepared a handy list of facts and figures to rebut Labour’s attacks. Motion and materials are included below:

Sheffield Labour Motion

8. Notice Of Motion Given By Councillor Mazher Iqbal
That this Council:-
(a) believes Britain’s energy market isn’t working for ordinary families and businesses and the cost of electricity and gas is crippling their family finances;
(b) regrets that energy bills have risen by almost £300 for families since 2010 and businesses say it’s the second biggest cost they face and is concerned that when the price of energy increases energy companies pass this on, but when it drops consumers don’t see their bills fall;
(c) notes recent research by Which? estimating that flaws in the market have left consumers paying £3.9bn a year over the odds since 2010;
(d) fully opposes the unfair price rises recently announced by the big energy companies including a 10.4% increase in Npower’s dual-fuel bills from December, SSE increasing prices by 8.2% from 15th November, British Gas increasing their prices by 9.2% on 23rd November and Scottish Power raising prices by 8.6% from 6th December;
(e) notes comments from the Chief Executive of Citizens Advice speaking about the SSE increase “The price rise will be a blow for stretched budgets … Many households are facing a daily battle to try to make their frozen incomes cover mounting energy, food and travel costs. Further increases will push people into poverty.”;
(f) believes that the increases represent a rip-off and believes that the present Government have chosen to defend the big energy companies and have failed to stand up for the consumer;
(g) regrets that the Council’s main opposition group’s spokesperson for energy has followed the line of the Conservative Party in defending the energy companies rather than Sheffield families and is extremely concerned by the following comments he made in “Lib Dem Voice” on 30th September, 2013 “No energy company has a duty to invest in anything” and “To say that energy prices are the fault of the energy companies is obviously on one level correct, but seems to imply that they have a duty to us rather than their shareholders when they set their prices. They have a legal duty not to operate a cartel, but beyond this they pitch their prices to maximise profits.”
(h) believes that this demonstrates that the main opposition group is only concerned with defending the excessive profits of the big energy companies and has no concern for Sheffield’s hard pressed families who are faced with extortionate increases in their energy bills;
(i) welcomes the commitment by The Rt. Hon. Ed Miliband MP to freeze energy bills until 2017 upon the election of a Labour Government; and
(j) further welcomes the commitment that the next Labour Government will reset our energy market so it works for Britain’s families and businesses, with a new tough regulator to stop overcharging.

Lib Dem Rebuttal Material

Quote from Ed Davey in the Guardian on Friday 25th:

“He [Ed Milliband] did nothing in government on this. He created the big six. In 2000 there were three generating companies and 14 suppliers – 17 companies – and after Labour’s reforms there was the big six. Well, well done! We’re having to change that. We’ve got lots of new generators coming in and we’ve now got 15 independent suppliers.

“Labour created the monster, we’re defeating it. Labour’s policy would recreate the monster. Imagine a 20-month price freeze. Wholesale prices on international markets, which I don’t think Ed Miliband is claiming he controls, go up by 10%. That’s 47% of the bill. If you’re a small supplier, you’d go bankrupt. If you’re a big company, you’d take it on your balance sheet. Prices go up, small, independent competitors go out of business, the big six is created again. Well done, Mr Miliband! You really understand market economics don’t you?”

Energy bills

The Liberal Democrats are helping people with the cost of living by cutting income tax by £700 for working people.

We’ve already taken action to help with energy bills this winter. Two million households will get as much as £200 off their bills under the Warm Home Discount. 230,000 homes will be warmer this year by getting energy efficiency measures installed.

We’re also changing energy bills by cutting the number of tariffs, making bills simpler and clearer, and getting people off poor-value tariffs and on to the best deal for them.

The SSE price rise

This is clearly unwelcome news for customers of SSE. People should take the opportunity now to make sure they are on the best deal available to them.

Half of an average energy bill is made up of the wholesale cost of energy. This far outweighs the proportion of a bill that goes to help vulnerable households with their bills and to cut energy waste, and to encourage investment in the new low-carbon energy generation we need to keep the lights on. SSE’s own figures show that wholesale price rises have contributed more than policy costs to this price increase, as a share of the bill.

Energy prices

When Ed Miliband was appointed Climate Change Secretary in late 2008 he said he would “press energy firms for price cuts”. When Miliband left office 18 months later, British Gas recorded a 58% surge in annual profits to nearly £600m. reported that average bills were now “£281 higher than two years ago”.

In nine years of Labour government the average annual household energy bill jumped by 120%, from £365 in September 2000 to £804 by September 2009, according to Ofgem.

Labour’s energy price freeze

Everyone wants to help with the cost of rising bills, which is why Liberal Democrats have cut income tax by £700 for working people. And it’s why we’re changing energy bills by cutting the number of tariffs, making bills simpler and clearer, and getting people off poor-value tariffs and on to the best deal for them. But Labour’s plan is a promise that won’t work.

When they tried to fix prices in California it resulted in an electricity crisis and widespread blackouts. We can’t risk the lights going out here too.

Fixing prices in this way risks blackouts, jeopardises jobs and puts investment in clean, green technology in doubt.

Ed Miliband has already been forced to admit that there are flaws in his policy. He has admitted energy companies could appeal to the Government to overturn the freeze. And he had no answer to the question of what would happen if prices were put up by the energy companies before a freeze. Even senior Labour figures think it is unworkable and would cost jobs.

Labour and the cost of living

The reason the cost of living is high is because Labour crashed the economy. For them to criticise the Coalition for cleaning up their mess is utterly hypocritical.

In Government, Labour:

  • Crashed the economy, which is why the cost of living is high now
  • Scrapped the 10p tax, leaving half a million of the lowest paid worse off
  • Increased the state pension by an insulting 75p

Liberal Democrats have done everything we can to help people with the cost of living while cleaning up Labour’s mess. We have:

  • Stabilised the economy, keeping interest rates and mortgage payments low
  • Given 24m ordinary workers a £700 tax cut
  • Increased the state pension by £650 thanks to our ‘Triple lock’ (where pensions must rise with the highest of earnings, inflation or 2.5%Frozen Council Tax, saving the average household £600 since 2010
  • Frozen fuel duty, saving motorists £170 per year compared to what they would have paid under Labour
  • Announced free school meals for all infants from next year
  • Expanded free childcare and, from 2015, giving £1,200 a year towards the cost of childcare for every child under 12
  • From 2016 introducing a cap on social care costs, after years of Labour failures to reform the system

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