Energy policy – September 2015

Around 2.3 million households are living in fuel poverty. We need to do more to end the scandal of cold homes. It is clear this problem has been made worse by rising energy bills, which have put a real strain on household budgets in recent years, particularly those on low incomes.

While wholesale gas and electricity prices are at a five-year low, this has not been passed on to consumers. Indeed, the Competition and Markets Authority (CMA) recently concluded that millions of consumers have been overcharged for energy and that British households are paying £1.2 billion too much each year.

The government needs to take proper action to protect consumers by improving transparency and competition, and by giving the regulator the power to cut prices.

The Labour manifesto included a commitment to freeze energy bills until 2017 and proposed creating a new regulator with a legal duty to force energy suppliers to cut prices when wholesale costs fall and revoke their licences if they repeatedly harm the interests of consumers. The current government must act to reform the energy market to deliver fairer prices. Unfortunately, the government continues to oppose this.

While fuel poverty has been made worse by rising energy bills, I believe energy efficiency is the most effective way of lifting people out of fuel poverty. You can read more about what I said on this topic here and here when I was previously shadow minister for Energy and Climate Change. The last Labour government introduced the Warm Front scheme in 2000, which provided government-funded grants for heating and insulation improvements to over 2.3 million households.

During the last Parliament, the Coalition government’s two flagship energy efficiency schemes were the Green Deal and Energy Company Obligation (ECO). The ECO resulted in the number of households getting loft, cavity and solid wall insulations falling dramatically, while the Green Deal has had little impact, with just 5,000 households having had measures installed. The ECO ends in 2017 and the current government is ending funding to the Green Deal with nothing lined up to replace it. It is clear the government’s approach to energy efficiency has failed.

The Conservative manifesto pledged to insulate a million more homes over the next five years. This aim is unambitious. The Energy Bill Revolution campaign says that it is an 80 per cent reduction on the number of energy efficiency measures delivered in the last Parliament.

I support a much more ambitious programme and believe that energy efficiency should be a national infrastructure priority.