For further comments or to arrange an interview, contact Head of Communications Kate Andrews: email@example.com | 07584 778207 Commenting on Ed Miliband's upcoming announcement on energy policy, Deputy Director of the Adam Smith Institute Sam Bowman said:
The recent collapse in wholesale oil prices and the resulting fall in retail energy prices has highlighted Labour's price freeze policy as misconceived and irresponsible. Energy companies raised prices when Labour first announced this policy and it is possible that prices would be falling more quickly now if these firms did not have to safeguard against a price freeze under a Labour government.
According to Ofgem, 46% of the cost of a dual fuel bill is wholesale costs, which British energy firms have no control over at all. Network costs, operating costs and taxes account for almost all the rest of energy bills, with only 5% going to energy firms as profit.
Fixing a price that is almost entirely driven by shifts in the global market is stupid and counterproductive and is likely only to hurt consumers through brownouts and higher prices in the long term.
The Adam Smith Institute is an independent free market think tank based in London. It advocates classically liberal public policies to create a richer, freer world.