Utility Week

UTILITY Week 20th March 2015

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Labour's five promises At the weekend, Labour made five key pledges to the elector- ate as it seeks to win a majority for the first time since 2005. Behind promises to secure the country's economy, the cost of living – and the pledge to cut energy bills – are prominent. The five pledges in full are: • A strong economic foundation. Balance the books and cut the deficit every year while securing the future of the NHS. None of Labour's manifesto commitments require extra borrowing. • Higher living standards for working families. Freeze energy bills until 2017 and give Ofgem the power to cut bills this winter, ban zero- hour contracts, raise the mini- mum wage to £8 and provide 25 hours free childcare a week. • An NHS with the time to care. 20,000 more nurses and 8,000 more GPs. Labour will join up services from home to hospital, guaranteeing GP ap- pointments within 48 hours and cancer tests within one week. • Controls on immigration People who come here won't be able to claim benefits for at least two years and we will introduce fair rules making it il- legal for employers to undercut wages by exploiting workers. • A country where the next generation can do better than the last Tuition fees reduced to £6,000, an apprenticeship for every school leaver who gets the basic grades, and smaller class sizes for 5-7 year olds. 8 | 20TH - 26TH MARCH 2015 | UTILITY WEEK 'Labour will cut your energy bill' Ed Miliband still thinks energy is a vote-winner and promises across-the-board cuts in tariffs if Labour wins the election. Lobby Election / Party conferences L abour leader Ed Miliband attempted to reignite the political energy debate last weekend at his party's spring rally in Birmingham. The move comes on the heels of needling from some political commentators who sug- gested his dramatic price freeze pledge of 2013 had become irrelevant in light of the collapse of wholesale oil and gas prices and subsequent reductions, to varying degrees, in consumer bills. Miliband's return to the energy battle ground reflects his conviction that energy affordability remains a vote-winner, despite the changed market conditions. Reorienting his seminal price freeze pledge, Miliband said Labour will now force energy suppliers to immediately cut their prices, should he gain power in May. These cuts could be up to 10 per cent – a figure based on recent research from con- sumer watchdog Which? (see below) – and the promise seeks to position Labour as a consumer champion, ensuring suppliers charge a "fair price" for their energy, and one that reflects falling wholesale prices. This comes on top of the promise of a 20-month cap and the introduction a whole ra of reforms The shi by Miliband away from focus- ing on the freeze and towards cutting bills is important now that the promise of a freeze has lost its mojo. While the coalition claims credit for some of the recent reductions in energy bills (a consequence of increased competition, nurtured by Ed Davey, they say), Labour is not satisfied that market forces can be trusted to get the best for "hard working families up and down the country". Yet, coupled with a relatively mild winter and falling tariffs, bills are lower than many expected and Miliband has clearly under- stood that a price freeze – even when it is a cap – no longer cuts the mustard. A promise of further cuts is, at least in the eyes of the party, a much more appealing – and a vote- winning – sound bite. With only 48 days until Britons go to the ballot box, Milband – a former energy secre- tary – has done his best to put energy costs back at the centre of political debate. Daily updates: www.utilityweek.com UTILITY WEEK LOBBY POLL TRACKER 13 Mar 2015 – YouGov poll Party Share Change (from 6 Mar) Conservatives 34% 0 Labour 34% +1 Lib Dems 7% -1 Ukip 14% -1 Green 5% 0 Other 6% +1 Labour has based its call for a cut of up to 10 per cent to energy bills on recent re- search conducted by Which? The key finding of this research were: • There was no ration- ale, in terms of wholesale movements, to justify the increases to gas and electric- ity prices in late 2013. • There has been room for the major energy suppliers to reduce electricity prices, based on hedged wholesale costs. • The recently announced reductions in standard gas tariffs (of up to 5.1 per cent) should have been higher if they were aligned with the wholesale market. The Which? research

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