Published: November 16, 2013
Burnham's MP hits out at energy price rises and Labour 'freeze'

Burnham-On-Sea's MP has called on energy firms to lower their bills but attacked Labour's plans for a price freeze during a House of Commons debate.

Tessa Munt claimed that Labour's proposed energy price freeze would not solve the problem of soaring prices across the country.

The MP told the Commons debate: "Labour's 20-month price freeze has hit the headlines and will prove superficially popular with the voters, but there are many reasons why it will not work, much as we all want to reduce people’s bills."

"It is a hopeless strategy to try to control the sales price of businesses that have volatile raw material costs, because prices will go up before the freeze as companies try to hedge against the risks of a Labour election win. In fact, that has probably already begun. Prices will go up again after the freeze as companies seek to recover any losses that they think they have sustained."

"During any freeze prices will stay artificially high even if raw material costs go down. Having begun to take the drug of price fixing it would be hard to kick the habit after 20 months. Why not 24 or 30, or doing it again the following winter, or the one after that? The proposal risks further damage to the market as a result of uncertainty, which may well spread to other industries. There would be huge political pressure to freeze prices in other sectors, risking further chaos and a return to the situation facing us in the 1970s."

"We should ensure that Ofgem does its job; keep up the pressure on the big six suppliers; look at encouraging more new entrants; do lots more to save energy in the first place; get a fair deal for people on pre-payment cards and meters; ensure that consumers receive bills that they can understand; support the development of many more green energy provisions on a local basis such as the Wedmore power co-operative solar array and make it swift and easy to switch suppliers."

Her comments come after British Gas raised its prices by 9.2 percent for 7.8 million customers, RWE npower raised its by 10.4 percent for 3.1 million customers, and ScottishPower hiked up its costs by 7 percent for 2.2 million customers.



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