Miliband's energy price cap is a brilliant trap for the Tories

The Tories' natural aversion to price controls means they will struggle to support a cap, leaving Miliband free to present Cameron as siding with the companies over the consumers.

After spending the summer telling voters that they're worse off under the Tories, Ed Miliband knew that he needed an emblematic policy that would show them how they'd be better off under Labour. The result, unveiled in his speech, was a pledge to freeze energy prices until 2017. Miliband said: "The next Labour government will freeze gas and electricity prices until the start of 2017. Your bills will be frozen, benefitting millions of families and millions of businesses. That is what I mean by a government that fights for you. That's what I mean when I say: Britain can do better than this."

One senior Labour strategist told me after the speech that the party had focused-grouped the policy and that voter approval was "off the scale". Polling has consistently shown that of every 'cost-of-living' issue, it is energy prices that are the public's greatest concern. With this intervention, Miliband has framed himself as a strong leader prepared to stand up to predatory firms on behalf of the little guy. He noted that "the companies won't like it because it will cost them money" but added: "they have been overcharging people for so long because the market does not work. And we need to press the reset button." The party calculates that the move, which will be backed by legislation in the first month of a Labour government, will save consumers £120 and businesses £1,800.

While the Tories have capped benefits and immigration, Miliband has smartly borrowed this device to show how Labour would tackle the 'cost of living crisis" it has so often bemoaned. The question now is how the Conservaties will respond: will they steal it or kill it? David Cameron has promised action to force firms "to give the lowest tariff to their customers" but this falls well short of Miliband's pledge, and charities and consumer groups warn that it will have little meaningful effect on prices.

So far, the Tory attack machine has responded by claiming that Miliband's commitment to a 2030 decarbonisation target would add £125 to households' energy bills but soon Cameron will be forced to answer the question that Labour will inevitably pose: are you for a cap or against one?

The Tories' natural free-market aversion to price controls means it will be hard for Cameron to support any form of cap, but he will be reluctant to allow Labour to claim that he has taken the side of companies over consumers and again stood up for the "wrong people". At the moment, the Tories' response to Miliband's cap seems to be to change the subject. But as Labour found in the case of welfare and immigration, that is a politically fraught course. With his announcement today, Miliband has set a brilliant trap for Cameron that the Conservatives will struggle to avoid walking into. 

Ed Miliband delivers his speech to the Labour conference in Brighton. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Show Hide image

A global marketplace: the internet represents exporting’s biggest opportunity

The advent of the internet age has made the whole world a single marketplace. Selling goods online through digital means offers British businesses huge opportunities for international growth. The UK was one of the earliest adopters of online retail platforms, and UK online sales revenues are growing at around 20 per cent each year, not just driving wider economic growth, but promoting the British brand to an enthusiastic audience.

Global e-commerce turnover grew at a similar rate in 2014-15 to over $2.2trln. The Asia-Pacific region, for example, is embracing e-marketplaces with 28 per cent growth in 2015 to over $1trln of sales. This demonstrates the massive opportunities for UK exporters to sell their goods more easily to the world’s largest consumer markets. My department, the Department for International Trade, is committed to being a leader in promoting these opportunities. We are supporting UK businesses in identifying these markets, and are providing access to services and support to exploit this dramatic growth in digital commerce.

With the UK leading innovation, it is one of the responsibilities of government to demonstrate just what can be done. My department is investing more in digital services to reach and support many more businesses, and last November we launched our new digital trade hub: www.great.gov.uk. Working with partners such as Lloyds Banking Group, the new site will make it easier for UK businesses to access overseas business opportunities and to take those first steps to exporting.

The ‘Selling Online Overseas Tool’ within the hub was launched in collaboration with 37 e-marketplaces including Amazon and Rakuten, who collectively represent over 2bn online consumers across the globe. The first government service of its kind, the tool allows UK exporters to apply to some of the world’s leading overseas e-marketplaces in order to sell their products to customers they otherwise would not have reached. Companies can also access thousands of pounds’ worth of discounts, including waived commission and special marketing packages, created exclusively for Department for International Trade clients and the e-exporting programme team plans to deliver additional online promotions with some of the world’s leading e-marketplaces across priority markets.

We are also working with over 50 private sector partners to promote our Exporting is GREAT campaign, and to support the development and launch of our digital trade platform. The government’s Exporting is GREAT campaign is targeting potential partners across the world as our export trade hub launches in key international markets to open direct export opportunities for UK businesses. Overseas buyers will now be able to access our new ‘Find a Supplier’ service on the website which will match them with exporters across the UK who have created profiles and will be able to meet their needs.

With Lloyds in particular we are pleased that our partnership last year helped over 6,000 UK businesses to start trading overseas, and are proud of our association with the International Trade Portal. Digital marketplaces have revolutionised retail in the UK, and are now connecting consumers across the world. UK businesses need to seize this opportunity to offer their products to potentially billions of buyers and we, along with partners like Lloyds, will do all we can to help them do just that.

Taken from the New Statesman roundtable supplement Going Digital, Going Global: How digital skills can help any business trade internationally

0800 7318496