David Cameron Reveals Energy Pledge

Prime Minister David Cameron unexpectedly announced during, Prime Ministers Question’s (PMQs) on Wednesday 17th September 2012, his initiative to commit energy firms to a pledge to put all customers on the lowest tariff available under new laws.
Published: Mon 22 Oct 2012

This solution to the rising energy bills has left everyone, including government ministers, asking questions. The Department of Energy seemingly had no knowledge of this new legislation. A representative eventually stated that the government was looking into “all options” for the lowest tariff deals. Following this announcement a spokesperson for the MP offered: “The point is, in practice, this market is not operating for everyone. A small minority of the public are actually switching deals. Therefore we need to push some of this responsibility on to the energy companies.”

What the Energy Officials say

On Thursday 18th September 2012, in a speech, the Energy Secretary, Ed Davey stated: “Our reforms will stabilise consumer prices. We will shift decisively away from volatile global prices, making sure we have competitive markets and consumers have the lowest price. That is the number one priority.” The energy minister John Hayes reinforced this claim: I think some of the larger energy companies might withdraw some of their subsidised deals, but what you're going to see is this surge of competition from independent energy companies.” However director of consumer policy, Anne Robinson retaliated: "This has to be a mistake - the unintended consequences would be to kill competition. There would be "no spur, no choice, no innovation and no reason for consumers to engage any more".

Shadow Energy Secretary Caroline Flint pointed out: “The cheapest deal in an uncompetitive market will not be a good deal for the public. We need a more competitive market. Six companies dominate 99% of the customer base in the UK. So what do we need? We need a tougher regulator, and we have announced that we would abolish Ofgem.”

What the Energy Sector says:

The major energy firms claim this policy was sprung on them. They were not given any time to plan strategy. The main concern is the neutralising effect this policy may have on their competitive edge. A spokesperson for the Department of Energy and Climate change stated this policy will not affect competition. They reinforced that the government is looking at “all options” for low tariffs. However they point out the best tariff deals may not necessarily be the cheapest and this is what the government has to address. 

The Result

In the UK, two of the biggest energy providers; Npower and British Gas have increased gas and electricity prices. They state this is the result of the government's policies and wholesale prices.   

Shadow energy secretary Caroline Flint said Mr Cameron had thrown energy policy into "confusion", causing "chaos" in the energy industry. Full details on this policy are expected to be included in the Energy Bill, due for release this November.  

This latest antic from Cameron has brought forward Ed Miliband’s resonating question: "Have you ever seen a more incompetent, hopeless, out of touch, u-turning, pledge-breaking, make it up as you go along, miserable shower than this Prime Minister and this Government?"