Lord Whitty
To ask Her Majesty’s Government what steps the Department of Energy and Climate Change and OFGEM have taken towards ensuring that energy companies offer their customers the lowest tariff, as announced by the Prime Minister on 17 October (HC Deb, col 316).
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, the Government published a discussion document on 20 November setting out proposals to deliver the Prime Minister’s commitment to ensure that consumers are on the cheapest tariffs. The Government’s proposals build on Ofgem’s latest retail market review proposals published on 26 October. We are consulting on proposals to legislate in the Energy Bill to ensure that energy companies place consumers on the cheapest tariffs that meet their preferences and have clear, personalised information to help them shop around more easily for the best deals across the market.
Lord Whitty
My Lords, I thank the Minister for that Answer but the Question asked what steps have been taken. She refers to consultation. I have read the Statement, I have read the consultation paper and I have even tried to read the Energy Bill before another place; but the consultation document deals with simplification, it deals with collective buying, it deals with issues such as the companies offering a single tariff—but there is nothing in there to force companies by regulation to offer the lowest rate, which is what the Prime Minister promised. By the way, the Energy Bill as it stands does not really say anything about consumers until Clause 117.
Baroness Verma
My Lords, I remind the noble Lord that at least this Government have taken steps to help consumers who for far too long have not had information which is simple and easy to understand on their bills. The Government are at least taking those proposals forward. Just 15% of households switched last year and that is a really unacceptable percentage. We want to ensure that through the Energy Bill and through our consultations, we are putting the consumer at the heart of what we are doing. I am sure that when the Energy Bill comes to this House the noble Lord will look at it very carefully.
Baroness Trumpington
My Lords, whose tariff is employed to heat this House? Is the tariff very low? I ask because it is very cold here.
Baroness Verma
My Lords, I am afraid that I do not take responsibility for the tariff of this House, but I will take my noble friend’s request back to the facilities department.
Lord Campbell-Savours
My Lords, is not the best way to reduce electricity consumption prices to go for voltage optimisation? What is the Government’s attitude towards that?
Baroness Verma
My Lords, we have looked at all aspects of reducing energy bills, even voltage optimisation, but we feel that the path we are taking is one by which we will be able to give a greater mix of energy supplies to consumers and a greater choice.
Baroness O'Cathain
My Lords, what is the future for smart meters? All the evidence suggests that smart meters, when installed in the home, cut the cost of electricity, but not to the detriment of heating. They seem to be able to do it in such a way, through the mechanics of the thing, as to benefit the consumer completely. Is the same attitude being taken by the energy companies as was taken by the water companies over the installation of water meters—“No, no, don’t go there, because if we do not install them they will have to pay for more water”?
Baroness Verma
My Lords, my noble friend raises a very important part of the work that the Department of Energy and Climate Change is undertaking. Rolling out smart meters in a mass rollout from 2014 will enable consumers to see how much energy they are using and to make choices about whether they need to reduce their own energy consumption. My noble friend raises the question of industry and suppliers. This is very much led by industry and energy suppliers—they are very involved in the rollout of smart meters. We are working collectively.
Baroness Worthington
My Lords, does the Minister agree that until there is proper reform of the energy market to introduce genuine competition in generation consumers cannot be guaranteed fair prices, no matter how many tariffs are on offer, and that the Government’s Energy Bill represents a missed opportunity to usher in genuine market reform?
Baroness Verma
My Lords, I do not quite know how the noble Baroness can predict what the Energy Bill will do until it arrives. When it arrives, I am sure that we will have long discussions over it. She misses out the point that the Energy Bill has brought certainty for investment. It will create a lot of jobs and ensure that consumers are at the heart of energy policy.
Lord Phillips of Sudbury
My Lords, does my noble friend agree that it is a sad if not tragic reflection on the state of big business today that one has to introduce legislation to prevent it engaging in premeditated deception of the most vulnerable consumers?
Baroness Verma
My noble friend speaks as many people feel: there is much that we need to do for the consumer. However, he will also be aware that energy bills have been rising because of wholesale prices rising, a matter over which we have very little control. Many of the increases that have taken place have occurred because of wholesale prices and not because energy companies here are raising prices.
Lord Campbell-Savours
My Lords, voltage optimisation is not an alternative to competing energy tariffs—it can be applied in the case of all companies providing electricity. Why do the Government not take it far more seriously, when very substantial gains are available under the introduction of voltage optimisation?
Baroness Verma
My Lords, I appreciate the noble Lord’s insistence on this but I will refer to my previous response. We are looking at all options, and we have looked at voltage optimisation.