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5 May 2014updated 09 Jun 2021 9:21am

Cameron has let the energy companies pocket his £50 bill cut

By failing to ensure companies pass on the full reduction, the PM has allowed them to boost profits at the expense of the consumer.

By Tom Greatrex

David Cameron’s timidity has left millions of customers with higher bills after his supposed £50 cut was exposed as a sham. Today’s figures show that his trademark complacency has let four of the six large suppliers by-pass the supposed £50 cut he trumpeted in December – meaning many of the Big Six have pocketed the benefit from Cameron’s changes to green levies, rather than passing it on to the consumer.And with 400,000 people without help to heat their homes as a result of government cancelling energy efficiency measures, it is the hardest pressed of customers that are hit.

Last December, at the time of Cameron and his hapless Lib Dem sidekick Ed Davey’s announcement, Labour warned that it would be at the discretion of the energy companies to pass on these reductions. We warned that the government’s plan did nothing to challenge the spiralling profits at the Big Six and we warned that they might seek to pocket some of the benefit, reducing the average £110 increase in bills by less than Cameron’s headline “£50” (meaning his cut was still a rise of at least £60 for consumers). And now it turns out they have.

Four of the Big Six will pass on just a fraction of the £50 cut in their costs. E.On, EDF, Npower and Scottish Power have all indicated that customers on fixed price deals will see just a £12 reduction in their bills. A total of 3.7 million customers are estimated to miss out on over £140m of savings.

By failing to pass on the full reduction, Cameron has helped the energy companies to boost profits at the expense of the consumer. Once again, he has been caught out standing up for the privileged few, aided and abetted by a hapless Lib Dem Secretary of State whose boast that “consumers are the ones who are winning” seems, at best, ill-judged.

Time and again, the big energy suppliers and their trade body claim to be sorry for their past behaviour, say that they have learnt lessons, proclaim that they want their customers to trust them, and that they are committed to working for fairness and transparency in the energy market. Yet today’s exposure shows that if they can find a way around a half-hearted government announcement, some of them will. It is this attitude that has caused the crisis of customer confidence in the energy sector – and it is a crisis that the government are either unwilling or (as demonstrated today) unable to address.

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The UK energy market is in clear need of urgent reform, to make it clear, fair and transparent for the future. Only Labour has proposed to break up the Big Six, make their trading more transparent and scrap the discredited regulator Ofgem. Meanwhile, our price freeze for a fixed, defined and specific period of 20 months will protect consumers whilst we push through these vital reforms, saving the average household £120.