Industry responds to Labour's Energy Green Paper

2nd December, 2013

Ed Miliband and Caroline Flint have launched Labour’s plan for the biggest reform of Britain's electricity and gas market since the privatisation of the 1980s.

The Energy Green Paper sets out the steps a One Nation Labour government will take to reset the market during the 20 month price freeze to ensure energy is affordable and available for the long term by:

  • Improving competition and transparency in both the wholesale and retail market;

  • Establishing a new Energy Security Board to plan and deliver the capacity Britain needs;

  • Replacing Ofgem with a new regulator with real teeth to prevent overcharging

Speaking at Manchester Town Hall, Miliband said: "Over the past two months we have been talking about how we would take on the Big Six energy companies and begin tackling the cost of living crisis by freezing energy bills for millions of businesses and customers.

"But today I want to focus on the long term change we would bring about while we reset the market during the 20 months of Labour's energy price freeze.

"Change that will make sure electricity and gas is affordable and available for the long term.

"When Britain's gas and electricity was privatised 25 years ago, the government of the time embarked upon a huge advertising campaign boasting about how brilliant privatisation would be - and not just the people to whom they were selling cut price shares.

"You may remember it. ‘Tell Sid,’ they said.

"In the past three years it has become clear to everyone but this government that the energy market is broken. Prices are rising year on year without justification. And Britain is not getting the investment in energy we need to secure supplies for the future.

"Today, a quarter of a century on I have a new message for Sid:

"Labour is setting out our plan to make sure gas and electricity is affordable and available for this generation and generations to come."

Miliband said that this Green Paper on Energy is a clear and workable plan for the biggest reform of Britain’s energy market since the privatisation of the 1980s.

He said: "We have a new message for Sid: We will freeze your bills for 20 months. We will reset the market with real competition and proper regulation so that prices are affordable. We will secure the investment we need.”

Neil Marshall, chief executive of the NIA, commented: “We welcome the fact that reducing energy demand through increased energy efficiency forms an integral part of the plan and we will respond to the questions posed in due course. In terms of Labours plans in respect of changes to the Energy Company Obligation (ECO) and Green Deal, we would urge them to ensure that home insulation is a key area of focus.”

Marshall added: “The NIA would like to see a national home insulation programme which is designed to systematically insulate the 5m cavity walls, 7m solid walls and 7m lofts that still need insulating in the most efficient and effective manner. In terms of ‘Telling Sid’, we should all be telling consumers that solid wall insulation can save £490 per year, cavity wall insulation £140 per year and loft insulation £180 per year.

Director of policy at EEF, the manufacturers’ organisation, Steve Radley, said: “Industry is facing major unilateral increases in energy prices and will welcome the Green Paper’s focus on competition, transparency and value for money. Its commitment to Contracts for Difference and, a 2030 decarbonisation target, provide a clear sense of direction which is vital to get investment in low carbon energy flowing. However, in setting a 2030 target, both here and at European level, it is vital that it is sufficiently flexible that we don’t lock ourselves into energy technologies that are uncompetitive.”

Gary Smith, GMB national secretary for energy, said "Labour has set the agenda on energy and this is a useful contribution to the debate. The Tories are on the back foot and their response will be to try and hold down prices until after the election when prices will continue to rise.

The real strategic issues have yet to be dealt with. The idea that competition will deliver lower prices is fanciful, driven by ideology and wishful thinking.

The question remains as to how we are going to deal with the challenge of energy prices going up and the likelihood of less competition not more."

Source: EAEM

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