Labour’s plan for small businesses
Under the Tory-led government
- The energy market just isn't working for families and businesses in Britain.
- Energy bills have risen by almost £300 since David Cameron became Prime Minister, and businesses say energy is one of the biggest costs they face.
- In January George Osborne said he was setting up yet another inquiry into the failures in the energy market. We don’t need another inquiry we need action.
- We will freeze energy bills up to January 2017, saving an average business £1,800.
- We will abolish Ofgem which has failed to stand up for consumers, and replace it from January 2017 with a tough new energy watchdog. The new regulator will have the power and remit to force energy companies to cut their prices when there is evidence of overcharging, for example when wholesale costs fall and the market fails to respond.
- We will unlock investment in clean energy by setting a firm 2030 decarbonisation target and giving the Green Investment Bank borrowing powers – helping to grow small businesses in the green economy.
If wholesale prices are falling how does this affect the freeze?
According to Government figures, both wholesale gas and electricity prices have fallen over the last year. Gas prices have fallen by 20% and electricity prices by 9%. But this has not been reflected in retail energy prices. As a result, Ofgem estimate that the supply margins of the Big Six have doubled in the last twelve months, increasing from 4% (£49) in 2013 to 8% (£105) today.
In order to ensure that energy bills are fair, we will put a duty, in law, on the regulator to ensure that reductions in wholesale costs are passed on to consumers.