Labour’s Better Plan: energy bills

Labour has a better plan – we will give the regulator the power to cut prices by winter and freeze energy bills until 2017 whilst we reset the market…

  • Labour will put an immediate stop to this overcharging by giving the regulator the power to cut prices and a duty to act in time for this winter.
  • We will freeze energy bills until 2017, so that bills can fall but not rise, whilst we fix the market:
  • By getting the Big 6 to separate out the parts of their business that generate energy from the parts that sell to consumers;
  • Getting them to sell all their energy in an open pool;
  • Introducing a simple new tariff structure; and
  • Abolishing Ofgem and replacing it with a tough new energy watchdog from January 2017.

One Response to Labour’s Better Plan: energy bills

  1. … Introducing a simple new tariff structure; …

    This single reform could probably make more difference than anything else.

    We are calling for energy suppliers to adopt simple pricing, presented in the style of a petrol forecourt display, so people can more easily compare tariffs and find the best deal for them.
    Which Website 19 November 2014 : Energy suppliers fail to explain ‘simple’ tariff rate

    The Tariff Comparison Rate (TCR) is a fudge – any attempt to explain something complex by grossly simplifying usually is.

    The question is do we need such a complex pricing structure?

    If we want competition based on “petrol forecourt” type displays, pricing has to be as simple as the consumer pricing of petrol.

    When I buy petrol, I do not pay a “standing charge” for the use of the pump, I do not get a discount because I also buy charcoal for the barbecue off the same forecourt, nor do I get a discount for allowing the petrol station to automatically remove the cost from my bank account.

    Different Energy companies should compete on the basis of the margin between what it costs them to buy energy and the price for which they sell it to us. Any other basis is obfuscation.

    There should be no “standing cost” for the energy companies to sell energy. The “infrastructure cost” to deliver to me or to my neighbour is identical irrespective of who our suppliers are. Therefore it is pointless to charge us different standing charges – there is no competitive difference.

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