26 Sep 2013

Energy – Labour’s ‘2001 reset’

The Tories think Ed Miliband’s energy bill freeze policy won’t really fly with voters because he’s not trusted on economic matters.

The analogy that’s been heard in No.10 is that just as the Tories couldn’t sell popular  immigration message in the 2005 election because of their own branding issues, so freezing energy bills might have sounded great from someone else (Tony Blair, for instance) but not from Ed Miliband.

Ed Miliband's energy policy

The Tories acknowledge that Ed Miliband raised his game in content and delivery but think he’s misjudged the next election if he thinks it won’t be about how the next government deals with the outstanding billions still to be squeezed out of spending or tax.

The bigger policy move which follows the 20-month bill freeze – “re-setting” the energy market by splitting up generators and suppliers and forcing generators to put into a “pool” that suppliers can buy from – may sound familiar.

It was part of the original privatised energy set-up which was “re-set” in 2001 and done away with by the last Labour government .

Ed Miliband was special adviser to Gordon Brown at the Treasury at the time and you can bet his boss was all over this particular reform even if it wasn’t Ed M’s special brief at the time.

Experts say there were different forces in play back then, but the end result was that vertical integration between generators and suppliers was given the green light and it’s that which Ed M wants to reverse.

Whisper it quietly, but the latest “re-set” policy was actually announced a year ago (minus the eye-catching bill freeze offer)  and you can see in the policy documents how graphs show the household bills rise like a rocket and fall like a feather.

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5 reader comments

  1. dennis ward says:

    So all this was happening under Labour before 2010. What you forgot to point out was the effect of the green energy tax (for wind and solar power subsidies) which has forced up household bills by 15% since it was introduced by Ed Miliband. Get the deceitful politicians to add that to the graph.

  2. Dougie says:

    Good post, Gary. Next time Channel 4 News gets to interview Ed – or any other Shadow Cabinet member – perhaps you could ask “If Ed thinks the energy market is broken, why didn’t he fix it when he was Energy Secretary?”.

  3. alexW says:

    Spooky: read this paper on California’s rolling blackouts following retail price controls and fumbling political interference… It seems like Milliband is following their recipe for disaster almost to the letter:


  4. Philip Edwards says:


    “Branding issues”?

    Tells you everything you need to know about politics in a capitalist society.

  5. Andrew Dundas says:

    This gamble will come off.
    Wholesale energy prices around the world have peaked. The Dollar is shading down too (£1.60 = $1 today). Both of those trends will ensure that UK energy companies will make bumper profits over the next two years.
    Which excessive profits will make the Miliband’s “freeze” and re-structure seem entirely reasonable.

    Ofgem has fallen right into the “Regulatory Capture” trap. All regulators get captured. Which is why their regime need changing frequently.

    Fracking oilfields around the world is an inevitable tech response to outrageous high prices. As oil prices fall, all other fuel prices will be pulled down too. Remember: You read that prediction here first.

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