Did Ed Miliband lower fuel bills but increase energy company profits?

Ed Miliband: "While I was the Energy Secretary, the average dual fuel bill fell by £110; under him, it has risen by £200, so I will compare my record to his any day."

David Cameron: "The fact is, under Labour, gas bills doubled and electricity bills were up more than 50%. When he became Energy Secretary, the companies were making a £25 loss per bill; when he left government, they were making £55 profit per bill. He did not stand up to the vested interests; he stuffed their pockets with cash."

Prime Minister's Questions, 25 October 2012

While the latest set of GDP figures released this morning delivered good news for the economy in the shape of higher-than-expected 1% growth, the cost of living remains a live topic on the political agenda.

The issue caused controversy at last week's PMQs, when the Prime Minister suggested that the Government "will be legislating so that energy companies have to give the lowest tariff to their customers," an idea which appeared to cause some confusion among Mr Cameron's colleagues and commentators in the media.

Energy bills were again the subject of heated exchanges in the Commons during yesterday's PMQs, where Labour leader Ed Miliband claimed that where fuel bills had fallen while he was Energy and Climate Change Secretary, the persent Government had overseen a rise of £200.

In return, David Cameron accused Mr Miliband of 'stuffing the pockets' of the energy companies, presiding over a jump in their profits. Is this a case of more heat than light?

Analysis

The source for Ed Miliband's claim is made clear in his question to the PM, where he cites a "Conservative party briefing document" on energy prices that was leaked to the media.

This states that:

"Just before Ed Miliband became Energy Secretary... the average dual fuel bill was £1,215...[when he left office] the average dual fuel bill was £1,105."

These figures are themselves taken from Ofgem's Electricity and Gas Supply Market Indicators, a look at the cost of domestic energy that is released every month by the energy market regulator.

Ed Miliband took up the newly-created post of Energy and Climate Change Secretary in October 2008, and if we look at the Ofgem analysis for this month we can see that it does indeed list the average annual dual fuel bill as £1,215. When we compare this to Ofgem's May 2011 report, when Chris Huhne replace Mr Miliband in the post the average dual fuel bill had fallen by £110, as Mr Miliband claims.

According to the latest set of data, the average dual fuel bill for this month was £1,310 per year, which is up £205 since the month of the 2010 election.

But how much of this can really be attributed to Ed Miliband's policies as Energy Secretary?

As we've seen before, factors beyond the Energy Secretary's control - most significantly the wholesale energy price - can have as much if not more of an influence on the cost of energy to the punter.

The Prime Minister therefore suggests that we consider instead the amount that energy companies made in profit: the difference between the sums charged to consumers and the amounts paid out to wholesalers.

According to the PM, energy company profits rocketed from an average loss per bill of £25 to a profit of £55 during Ed Miliband's time in office, and again, these figures are taken directly from the Ofgem analysis on energy firms profit margins:

For October 2008 (not shown on the table above) the 'rolling net margin' made by firms stood at -£25; by May 2010 firms were back in profit per bill with an average £55 net margin.

Again however, it's fair to ask the extent to which Ed Miliband is responsible for this. As the chart above shows, the trend for rising profit margins was established long before he became Energy Secretary, although they do seem to have levelled off since 2010.

Conclusion

While the statistics used by both David Cameron and Ed Miliband are themselves accurate, both party leaders may be trying to attach too much political significance to them, as factors beyond the control of the Energy Secretary are likely to have had as much influence over both the cost of energy to the consumer and the profit made by energy companies as the policies that were pursued by either Ed Miliband or his Coalition successors.