Energy bills
Labour says that it will be “one of the first bills” that they introduce Reuters

Labour's Ed Miliband has promised to give market regulator Ofgem the power to cut annual fuel bills to the tune of £100 savings per household.

Miliband has already pledged to freeze bills until 2017, with predicted savings of £120 a year. He says the latest proposal would almost double that saving for most consumers by 2017.

Miliband will say that if Labour wins the forthcoming general election Ofgem will be given additional powers, which will include the ability to cut bills by up to 10%; it would be "one of the first bills" that his party would introduce, coming into effect by the winter.

Wholesale gas prices have fallen by an average of a fifth over the last 12 months, but energy firms have failed to match the drop, with the big six discounting by as much as 5%.

"What better evidence do we need of the chronic overcharging, the broken market and the ripoffs being faced by millions of families and businesses across Britain?" Miliband will say.

The legislation will mean the watchdog will have a legal duty to ensure that prices are reasonable.

Caroline Flint, Labour's shadow energy secretary, told the BBC Radio 4's Today Programme: "We've seen recently that actually they have started to pass on some of those costs but it's only between 1% and 5%, and on gas alone, not electricity.

"Now when we've seen costs fall by an average of 20%, I think it's fair to say that something isn't right here."

However, it will not mean that Labour will go back on its pledge of disbanding Ofgem in the future.

Conservative energy minister Matthew Hancock described Labour's policy as "chaotic".

He said: "This is now the sixth version of a chaotic Labour energy policy that would have put up families' bills by £100 and could do the same again - their record at setting prices has been a disaster.

"And only Ed Miliband could propose giving a new power to a regulator he plans to scrap."