At the recent Labour Party Conference, Ed Miliband pledged to pass emergency laws, should Labour be elected into office, that prohibit energy companies from raising gas and electricity tariffs for a 20 month period. The announcement comes at a time when energy prices are “soaring” with the Big Six being pointed out for blame: “When wholesale prices go up, you pay more,” he said. “When wholesale prices come down, you still pay more.”. Miliband also announced that a new regulator would be put in place to replace the “weak” Ofgem and that the 20 month period, where rises in line with inflation would also be banned, would see a “reset” with lasting reforms on energy policy created to be passed into law by 2017.
The speech was well received at the conference but the policy has come in for criticism elsewhere. Whilst a price freeze is set to protect consumers from rising prices, the expected loss to industry of around £4.5billion is thought to put off investment in the new infrastructure necessary for the energy sector to move towards sustainability through the development of renewable energy. There is also debate about whether the lack of income will slow down the roll-out of smart meters to the general public which are seen as having a significant impact on individuals’, and therefore the nations’, energy-use.
There is still a long wait until the potential implementation of this policy but the debate brought about by the opposition leader’s speech implies a certain worry from the energy providers that there is a strong possibility of this policy going ahead.