Nick Palmer, Query for Mr Cameron: Where’s Our Utility Price Cut?
Following my non-political update on Beeston development, this is a political question. WHY is the Government allowing the utility companies to sit on the huge drop in oil prices without cutting domestic energy bills? In the last year, wholesale energy costs have fallen by up to 20% (and they’re continuing to fall), without a single price reduction to households.
Contrast this with the petrol price war that’s building up, and the position is obvious: whereas filling stations are in fierce competition, the domestic energy market is broken, since each supplier is content to pocket cost reductions without bothering to pass them on.
Isn’t there a regulator? Yes, it’s OFGEM. They estimate that the Big Six suppliers have doubled their profit margins in the last year. So why don’t they take action? Because the Government has explicitly decided not to give them the power. On June 18 2014, Labour proposed that “the energy regulator for Great Britain be given powers to force energy suppliers to pass on price cuts to consmuers when wholesale costs fall, if suppliers fail to act”. Conservative and LibDem MPs, including Broxtowe’s MP Anna Soubry, voted to reject it. OFGEM the regulator is specifically forbidden to regulate: they can observe, comment, complain – but not take effective action.
The proposal to give them effective powers is being put forward again by Labour on Wednesday. Will the Government accept it? Will Ms Soubry support it if they don’t? I very much doubt it.
And yet, if wholesale prices rise again, what do we think energy suppliers will do? They’ll put up prices in a flash.
The Government grumbles that the economy is recovering but voters aren’t grateful. But the problem is exactly this kind of asymmetry which prevents recovery from working its way to households. When the interests of big companies are involved, the Government is willing to help. When it’s ordinary households, they are sadly AWOL. And, frankly, an MP who always votes with the Government whether they’re right or wrong is unable to shift policy by an inch.