MP hits out at energy price rises and Labour 'freeze'
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.
Munt claimed that Labour's proposed energy price freeze would
not solve the problem of soaring prices across the country.
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 peoples bills."
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.