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16 | 26th september - 2nd october 2014 | UtILItY WeeK Policy & Regulation Labour party conference Labour plugs affordability Labour met in Manchester this week to set out its agenda for the next election – and it's all about affordability. By Mathew Beech. The key questions: L abour's final conference before next year's general election took a little while to warm up, but things finally got moving when the opposition set out its cost of living action plan in Manchester. Debate did circulate around the price freeze – last year's headline act – but Labour was keen to move the conversa- tion on and build on the founda- tions laid in Brighton in 2013. Affordability was the buzz word throughout the fringe meetings and on the main stage. Shadow energy secretary Caro- line Flint unveiled grand plans for six million "draughty" homes to benefit from a national energy infrastructure plan to help reduce household energy bills. Aside from that policy – which was well trailed in advance – Labour also set its sights on regu- latory reform. Their discontent with Ofgem is well known. The plans is to scrap the "toothless tiger" and introduce a new, "strong" regulator that can act to protect consumers. Water regulator Ofwat could also be subject to changes. This year, shadow environment minis- ter Maria Eagle joined the "afford- ability" battle cry, with a broad agenda to reform Ofwat by grant- ing it more powers to change water companies' licences. The message for Ofwat – and the companies – was clear: afford- ability is the first priority, and we will do whatever it takes. Eagle took a dim view of water compa- nies making healthy profits while failing to protect the poorest customers. She criticised them for "siphoning off " £1.8 billion of profit for shareholder in 2013 while doing nothing to help those struggling to pay their bills. Eagle has a plan to put that right: a national affordability scheme – or social tariff – that the water companies would be forced to introduced. This would sidestep the problem some companies have had of cus- tomers voting down social tariffs, because they would bring up prices across the board by subsidising the poorest. Aer Eagle came the headline act on energy policy. It wasn't quite as grand as the price freeze last year, but was perhaps even more significant – "a war on cold homes", as Caroline Flint put it. Or, to cut out the political jargon, a national energy effi- ciency programme. Five million low income homes would benefit from free insulation – and interest-free loans would be offered to fund energy efficiency improvements for a further one million. It may not be sexy – despite the protestations of many a Labour MP – but it is signifi- cant. Not only will energy bills be frozen, but energy consump- tion should fall. This would reduce the need for new capac- ity and network upgrades, and help the UK decarbonise. It's a win-win-win. But real concerns about last year's price freeze pledge remain. The question of how it will be done remains unan- swered, while the impacts it would have – and has already had – on the energy market make grim reading. "Economically insane" and "foolish" are just some of the epithets that have been heard in Manchester about the headline promise. But Labour is sticking to its guns. Will the move to make energy efficiency a headline issue work? It's unlikely, but it will help to strengthen Labour's appeal to those suffering in the early autumn cold. As, the party hopes, will be the pledges to give regulators some "bite". The slogans are there to tempt voters, even if many – especially within utilities – remain to be convinced. Overheard at the conference "The big six have swallowed up the energy industry. We don't want that with our pubs." Rowenna Davis, Labour PPC for Southampton Itchen "Ed still cannot get elected unless he deals with the Putin problem on the international stage – can this guy stand up on the international stage and project British strength to someone like Putin. It's not about policy, it's very much about image." Sunny Hundal, visiting senior fellow and lecturer at Kingston University. "…the big six haven't exactly covered themselves in glory…" Caroline Flint, shadow energy secretary Our roving political correspondent Mathew Beech will be covering all three main party conferences and putting the same important questions to senior politicians at each. What is the future for Ofgem? "Ofgem is discredited. People do not feel protected in the energy market by the regulator. "We think it needs new powers – it's not about what you call it. We've not got a clue what we would rebrand it as, but it's about the powers it has. "The pressure on prices makes them rise very quickly, but when there is downward pressure, and the wholesale price falls, that is not felt by people. It does not go down in the same way. Crucially, that is where a regulator has to have the power to act." Jonathan Reynolds, shadow climate change minister What is the most important part of the energy trilemma (affordability, sustain- ability, security)? "Affordability is an important part of what we have to address because we are asking the British public to underwrite the way we source our energy going forward. "There is a cost to not going low carbon in terms of what we rely on in the future and what the future offers in terms of jobs and growth. "It's about climate change and low carbon, and that we can do it in a way that's helpful to our economy and fair in terms of bills and security as well, and these things come together." Caroline Flint, shadow energy secretary Are the water companies treating cus- tomers fairly? "No. One in five households are struggling to pay their water bill, but the companies get to choose whether they help customers who can't afford to pay. Some do, but most of them don't – funnily enough. "It's just not good enough." Maria Eagle, shadow environment secretary Ofgem: Thumbs down Labour is sticking with its plan to scrap the regulator should it win in May