Labour energy law 'within months', Ed Miliband pledges

A Labour government would press ahead with its planned energy price freeze with new legislation within months of taking office, Ed Miliband has said.

The Labour leader said the freeze and new powers for a regulator to cut prices would be "one of the first bills" Labour would introduce.

The freeze was first announced at Labour's 2013 party conference.

But the Conservatives have said the policy is "in chaos" now that bills have started to fall.

The "big six" energy firms have all cut their gas prices by between 1.3% and 5.1% in the past few weeks and critics have said they were holding off going further in anticipation of the freeze being introduced if Labour takes power.

But Labour's shadow energy secretary, Caroline Flint, told BBC Radio 4's Today Programme said she did not accept that argument.

'Review prices'

"We always have 101 reasons from the energy companies and those in the sector about why they can't pass on wholesale costs.

"We've seen recently that actually they have started to pass on some of those costs but it's only between 1% and 5%, and on gas alone, not electricity.

"Now when we've seen costs fall by an average of 20%, I think it's fair to say that something isn't right here," she said.

Labour says it has always proposed a freeze against rising bills that would not stop them falling.

Labour's price freeze would last for 20 months

Under its plans, regulator Ofgem would be legally required to "review prices" by the autumn and given the power to order price cuts.

If further cuts of 10% in bills are made this year, it would save a typical family at least £100, Labour says.

Energy companies would also be split up and required to trade their energy in a central "pool".

Labour also wants to give the regulator access to energy companies' books - commercially sensitive data - to allow oversight of consumer bills.

"The regulator will need to have access on a company-by-company basis on what is going on within those companies," Ms Flint told the BBC.

'Legal duty'

Mr Miliband said wholesale energy costs are "tumbling down" because of "global changes in oil and gas supply".

"The sky-high prices that families pay have only fallen by a fraction of that. Gas bills have declined by between 1% and 5%. Electricity bills haven't fallen at all."

Labour would "go ahead" with the freeze, he said, adding: "We will pass a law to ensure falling costs are passed on to the consumer this winter.

"A law giving the regulator a legal duty to ensure fair prices this winter. A law giving the regulator the power to cut prices and keep homes warmer this winter."

Chancellor George Osborne said Labour's energy policy "doesn't add up".

"The truth is that under this government energy bills have been falling. But if we'd adopted Ed Miliband's plan, energy bills would be higher for families and families would be worse off."

'Competitive pressure'

Last month consumer body Which? said energy suppliers had failed to keep standard variable energy tariffs in line with falling wholesale prices over the past two years.

As a result, households on standard energy tariffs were £145 worse off last year, or a total of £2.9bn, it said.

Energy companies say they are already passing on price cuts to customers, with "competitive pressure" forcing bills down.

Regulators are to investigate whether the "big six" UK energy suppliers prevent effective competition in the UK energy market, which could take up to 18 months.

The government says its energy reforms have increased competition in the market and made it easier for consumers to switch suppliers to drive down prices.