Miliband pledges two-year energy bill freeze

Video: Caroline Flint defends proposal to freeze energy bills

Mr Miliband said bills would be frozen for 20 months if Labour wins the 2015 general election, as a way of helping people cope with Britain’s “cost of living crisis”.

The Labour leader said the move would save the typical household £120 and an average business £1,800 between May 2015 and January 2017. The energy companies, which have not been consulted about the policy, stand to lose an estimated £4.5bn if it is implemented.

Mr Miliband said: “The companies won’t like it because it will cost them money. But they have been overcharging people for too long because the market doesn’t work. It’s time to reset the market.”

He told the Labour conference that soaring energy prices were part of a “cost-of-living crisis” which had left ordinary people struggling to pay their bills, while the proceeds of economic recovery were siphoned off by a “privileged few”.

In a keynote speech delivered without notes, he said: “In the 1990s, Labour committed to a dynamic market economy,” said Mr Miliband. “We were right to do so.

“But what happens when competition fails, what happens when it just fails again and again? Government has to act – with the train companies that put the price of the daily commute further and further out of reach, with the payday lenders who force people into unpayable debt, and with the big gas and electricity companies, that put prices up and up and up.

“It’s not good for the economy – it’s not a dynamic market economy when one section of society does so well at the expense of others.”

New homes

Mr Miliband also pledged that a Labour government would ensure that 200,000 new homes were built every year by 2020, as another way of dealing with the “cost of living crisis”.

The Labour leader accused David Cameron of presiding over the lowest level of home building of any prime minister since the 1920s, with fewer than half of the new homes needed being built.

He said an average family needed 22 years to save for a typical deposit on a home, compared with three years in 1997.

By the end of the next parliament in 2020, the number of houses built should be increased to at least 200,000 a year, he told delegates.

Ed Miliband said he would launch a “rebuilding Britain commission”, which would be responsible for an increase in house building and the creation of a new generation of garden cities and new towns.

The commission, led by former BBC Trust chairman Sir Michael Lyons, would work with councils to identify sites for new towns and prepare a legislative framework for Labour to start building immediately if it wins the 2015 general election.

Mr Miliband said a shortage of housing was central to Britain’s “cost of living crisis“, leaving millions of working people unable to afford the homes they want.

The commission would look at legislation to give local authorities power to impose charges on developers hoarding land which could be used for development.

Councils could be empowered to use compulsory purchase orders to release land for housing.

Ed's many challenges at the Labour conference. Read Michael Crick's blog.

Mr Miliband also offered an £800m tax break to smaller companies as part of his plan to make Labour “the party of small business”.

Labour would do this by reversing a hike in small business rates due in April 2015 and freezing the levy the following year. It would be funded by scrapping the government’s planned 2015 cut in corporation tax from 21 to 20 per cent.

Better off now?

The Labour leader borrowed a slogan from Ronald Reagan’s successful bid for the US presidency in 1980, by saying that in 2015 voters should ask themselves: “Am I better off now than I was five years ago?”

He said growth in Britain’s economy was benefiting a minority, while life for ordinary families was harder, due to a “cost of living crisis” caused by soaring bills and wages which fail to keep pace with inflation.

“Too many of the jobs we’re creating in this country are just too low-paid, too many of the gains in our economy are just scooped up by a privileged few, including those with big bonuses,” he said.

“And too often you are left being charged over the odds. They used to say ‘a rising tide lifts all boats’. Now the rising tide just seems to lift the yachts.”

Addressing the British public, Mr Miliband said: “You’ve made the sacrifices. But you’ve not got the rewards. You were the first one into the recession, but you are the last one out.

“Will the pain be worth it for the gain under this government? No. They aren’t going to solve the cost of living crisis. Because for them, it is not an accident of their economic policy, it is their economic policy.”