On Tuesday, British Gas announced they would be raising electricity prices by 12.5 per cent from 15th September, adding £76 on average to the annual standard dual fuel bill. The move will hit over three million customers in the UK.
The announcement comes at a time when the wholesale price of electricity is falling and inflation is almost 10 per cent below the price rise. To the raised eyebrows of consumer experts, British Gas has cited government policy and increasing network costs as factors in the hike.
Centrica, British Gas’s parent company, posted profits of £816m in the first half of 2017 despite having lost thousands of customers. Meanwhile, chief executive Iain Conn received a fat-cat pay rise of £1m last year.
The energy giant is just the latest of the Big Six energy companies to hike prices in recent months, with NPower increasing their bills most sharply at 15 per cent in March. There are now fears of a fresh round of price hikes from rival suppliers in the winter.
All of this points to a broken energy system under the Tories. What makes matters worse is the fact that they seemed to recognise the problems themselves during the general election campaign – yet now they dither and delay, failing to act decisively.
Labour’s shadow energy minister Alan Whitehead has said “at the very least, the Conservatives should institute the energy price cap which Theresa May promised during the campaign”, highlighting how the government has failed to get a grip on the broken energy market despite their pledges.
At a time when wages are stagnating, services are being cut and ordinary people are struggling to make ends meet, that massive companies are making obscene profits at the expense of the ripped-off British public is simply unacceptable. Even more unacceptable is the sight of a weak government with the wrong priorities, walking by on the other side and doing nothing to help the people.
In 2015, the Tories scoffed at Ed Miliband’s suggestion that the government should intervene in the energy market to bring down costs. Just two years later and this government of chameleons adopted Miliband’s interventionist language at the 2017 general election, speaking of unfairness in the system and promising to cap energy prices.
However, talk is cheap with the Tories. They are simply unable to keep their promises to the British people. First they u-turned, watering down their proposals, and now they fail to act with any decisiveness at all. Quite clearly, in 2017 the gulf between the Labour party’s ambitions on energy and Tory neglect is stark.
The energy regulator Ofgem is looking at measures such as boosting competition and creating a price cap for two million of the most vulnerable customers, but that means many of the British Gas customers on poor value tariffs alone would still be hit. The UK needs and deserves bolder thinking on energy.
At the general election, the Labour party put forward a radical, transformative plan to tackle the excesses of bloated energy companies and create a new system for the many, not the few.
Labour will invest in new publicly owned energy provision that is genuinely affordable and democratically accountable to the people. Only with a Labour government will the British people be free from the scourge of arbitrary price hikes from energy giants such as British Gas and NPower.
Given the Tories are unable to negotiate a better deal for British families with the energy companies, this latest energy debacle also begs the question: how and why can we expect them to negotiate a good deal for the British people with the twenty-seven members of European Union and the EU commission?
On energy as much as Europe, the Tories lack unity and vision while Labour looks more and more like a government in waiting, ready to confront the country’s major challenges.
Ibrahim Dogus is an entrepreneur and chair of SME4Labour. He was Labour’s parliamentary candidate in the cities of London and Westminster at the general election.