Energy Market Reform

Debate between Baroness Burt of Solihull and Caroline Flint

Wednesday 24th October 2012 Commons Chamber

[Caroline Flint (Don Valley) (Lab)]

I beg to move,

That this House notes that annual energy bills have risen by more than £200 since May 2010, with further price rises on the way; calls on the Government to help families and pensioners with their energy bills this winter by requiring energy companies to put all people aged over 75 on their cheapest tariff; and further calls for it to reform the energy market to break the dominance of the Big Six by requiring them to sell power into a pool, and allowing new businesses to enter the market, thereby increasing competition and driving down energy bills for all, and to replace Ofgem with a tough new energy regulator with the power to force energy companies to pass on price cuts when wholesale costs fall.

Since this Government came to power, energy bills have gone up by more than £200, and last week three of the big energy companies announced another round of price hikes, adding a further £100 to people’s energy bills this winter. People worried about how they will afford to keep the lights on, heat their homes or have a hot meal deserve a Government who understand their challenges and have the ideas to provide the change that Britain needs and the strength to see them through, but all we get from this Government is another shambles from an out-of-touch Prime Minister who seems to make it up as he goes along. From the disgraceful conduct of the former Chief Whip to the incompetence on the west coast main line that has cost taxpayers millions, this is a Government who promised change but instead are delivering chaos.

[Lorely Burt (Solihull) (LD)]

I am grateful to the right hon. Lady for giving way so early on in her remarks. Labour was in government for 13 years and, indeed, the Leader of the Opposition was Energy Secretary for almost two years. Does she agree that if her party truly thought that Ofgem was ineffective, it should perhaps have done something about it in those 13 years?

[Caroline Flint]

Of course, my right hon. Friend the Leader of the Opposition did make some changes to Ofgem, but we have given more consideration to this over the past two years and, as I will explain later, we now feel that we need to take a more radical look at it.

On Tuesday last week, in response to a question from my noble Friend Lord Kennedy, Baroness Verma, a Minister in the Department for Energy and Climate Change, told the other place:

“What we cannot do, of course, is tell big energy companies what prices they should set.”—[Official Report, House of Lords, 16 October 2012; Vol. 739, c. 1368.]

On Wednesday, though, the Prime Minister directly contradicted her when he said:

“we will be legislating so that energy companies have to give the lowest tariff to their customers”.—[Official Report, 17 October 2012; Vol. 551, c. 316.]

By Wednesday evening, a spokesman for the Department had told the Financial Times that energy companies would not in fact be forced automatically to put all customers on cheaper tariffs. By Thursday morning, the Minister of State, the hon. Member for South Holland and The Deepings (Mr Hayes), was reduced to taking the ridiculous line that the Government did still want to use legislation to get people lower tariffs but could not explain how they were going to do it.

All the while, the Secretary of State, the man responsible for this country’s energy policy, had gone AWOL, leaving an empty chair on “Newsnight”, refusing to answer questions from the media, and sending his deputy to answer my urgent question. The Minister put in a valiant performance of which he should be proud; those of us who were there could say that it was parliamentary comedy gold. However, what did we actually learn from last week’s urgent question? We learned, in the words of the Minister, that

“DECC has a wonderful relationship with…the Treasury and No. 10”

which

“has improved since my arrival.”—[Official Report, 18 October 2012; Vol. 551, c. 493.]

Despite that wonderful relationship, we also learned that the Department of Energy and Climate Change is not told about announcements on energy policy until after they are made. We learned that one of the options being considered is a change to the law to require the energy companies to write to people to tell them what the cheapest deal is, even though the Government already announced that back in April and the Energy Act 2011 already gives the Secretary of State the power to force energy companies to provide information about the lowest tariff.