Energy Price Hike Row

October 10, 2013 by  

Energy Price Hike Row, The row between David Cameron and Ed Miliband over fuel bills has intensified after Downing Street said the 8.2% increase in prices announced by one of Britain’s largest energy companies shows that Labour’s pledge to freeze prices is a “con”.

The prime minister’s spokesman said international pressures, which are an important factor in driving up prices, would make it difficult for a prime minister to intervene in the market.

Miliband responded to the announcement by SSE that it would increase prices by 8.2% from 15 November – hitting more than 7m households – by saying it highlighted the importance of his pledge to freeze energy bills for 20 months if he won the general election in 2015.

But the prime minister’s spokesman said the price increase was driven in large part by international factors, highlighting the weakness in Miliband’s argument that a prime minister could intervene so decisively in the market.

The spokesman, a civil servant, said: “With regard to the opposition’s policies – it is rather more for my political colleagues to help you out on that. But if I could paraphrase what they might say to you, if I were here talking about a 20-month price cap you might be putting to me that that is a con.”

He added: “The fact that we operate in an international wholesale energy market is an important factor here.”

Downing Street sources said Miliband had failed to take account of such international pressures on prices. They said the Labour leader falsely believed he could intervene on energy prices in the same way that the government was able to play a role in setting rail fares, which are influenced almost entirely by domestic pressures.

But Downing Street said the prime minister understood the impact of rising bills and was prepared to take further action to promote competition in the market. The government is legislating to force energy companies to place consumers on the lowest tariff, although this will only apply to the relatively small proportion on closed tariffs.

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