Labour's campaign goes much further than the price freeze. Only implementing a two year price freeze would simply be an immature and irrelevant policy. The main aim is to fix up the energy market which in its present form is exploiting consumers. The price freeze is just a temporary measure to help consumers deal with rising prices whilst reforming the energy market in the long term.
Scrapping Ofgem would be the best start. It can be seen that this regulator is out of touch and is incapable of protecting consumers against the big six energy companies. A replacement watchdog would be more transparent and would make sure decreases in wholesale prices are registered on the bills of consumers. As it stands now, when wholesale prices go up, retail prices go up and when wholesale prices go down, retail prices still go up.
There needs to be an end to over-the-counter deals and a legal requirement that all energy is traded through open exchange. This will increase transparency in the energy market and stop consumers being ripped off. Energy companies must be forced to pool the power they generate and open it to any retailer, resulting in a more open market and downward pressure on prices. Consumers need protection from these profit thirsty companies and it is the government's role to protect them.
If this policy is implemented it would require the energy companies to put all those over 75 on their cheapest tariff, this would save four million pensioners as much as £300 a year on their annual energy bills. The overall outcome would result to an active industrial strategy which will enhance green growth and create a huge number of jobs in a low-carbon economy. This policy would have many benefits and save costs for the government in various departments.
We have a cost of living crisis, since 2010 the average household salary is down by £1500. Prices are rising faster than wages and people are struggling to pay for necessities such as gas and electricity. This winter thousands of people will have to make a decision between heating and eating. If a price freeze is introduced it would save the taxpayer more than £100million in reduced bills for public services.
If this current coalition government implemented a price freeze, £40million would be cut from NHS costs, £28million from schools and £21million from defence,. Energy companies are continuously putting their prices up and the consumers have to bare the costs. The government needs to take action but they are proving themselves too weak to stand up to the energy companies.
The coalition government argue that wholesale prices are increasing and that a rise in retail prices is justified. However, figures show that wholesale prices have been steady in the last year and the energy companies are putting their prices up simply because they can. Another one of the government's arguments has been consumers should switch suppliers. Again this is not an option for consumers as all of the energy companies are putting their prices up.
Downing Street has suggested people who are struggling to pay their energy bills should wear an extra jumper this winter. This answer from the government is mocking the people of Britain who despite working very hard can't afford to pay their bills because of the cost of living crisis. We need to reform the energy market by starting off with freezing energy prices and tackling the cost of living crisis.
The six big energy companies are acting like a cartel and need to be stopped. Energy bills are rising, inflation is up and this is contributing to the cost of living affecting millions of families. The long term outcome of this policy would result in a more transparent energy market and a better deal for consumers and businesses.