Energy Company Licence Revocation
Debate between Lord Redwood and Caroline Flint(11 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Caroline Flint (Don Valley) (Lab)
I beg to move,
That this House believes that consumers have a right to be treated fairly and be confident that energy companies will meet their obligations and provide good services; further believes that where companies breach these obligations, decisive action should be taken to put things right and prevent further breaches; notes that since 2001 Ofgem has imposed at least 31 fines totalling at least £90 million; further notes that despite these financial penalties energy companies face another 11 investigations with four additional cases at informal review stage; further notes that the regulator already has the power to revoke energy companies’ licences in certain limited circumstances, but not where energy companies comply with a penalty notice and then commit further breaches of their licence; and therefore calls on the Government to provide the energy regulator for Great Britain with a new statutory power to revoke energy companies’ licences where there are repeated instances of the most serious and deliberate breaches of their licence conditions which harm the interests of consumers.
The Minister for Business and Enterprise is not in his seat, but I do want to welcome him and the Under-Secretary of State for Energy and Climate Change, the hon. Member for Hastings and Rye (Amber Rudd), who is present, to their new posts and wish them well for what I hope and expect will be their remaining eight months in office.
This summer, while those who occupy the Government Benches succumbed to infighting and some introspection, my right hon. Friend the Leader of the Opposition and my hon. Friends in the shadow Cabinet set out the choice facing the British people at the general election in 2015. We set out a picture of a Britain where public service is valued, but reform is ongoing; where fiscal discipline is matched by fairness; where aspiration is embraced, while no one is left behind; where individuals can thrive and excel, but community solidarity is not forsaken; and where new businesses and new jobs are encouraged, in markets that have fair rules, obligations and rewards. It is to that theme, and to the announcement I made in my speech on the energy market in August, that I wish to return today.
The facts speak for themselves. Under this Government, energy bills have risen by over £300—twice as fast as inflation, four times faster than wages and faster than in almost any other country in the developed world. It is faster, too, than under the previous Government; in fact, the rate of increase since the last election has been three times faster compared with the period between 1997 and 2010. Now I know the Secretary of State likes to cherry pick the dates when he compares our record with his, but even when we only look at the final five years of the last Government, in real terms energy bills have still risen by a greater amount in each year under this Government. The reason why bills have risen—and will continue to rise, unless something is done about it—is that the energy market is broken.
Mr John Redwood (Wokingham) (Con)
Will not the right hon. Lady admit that one of the main reasons why our bills are higher than those in many other parts of the world and have risen more is the policies introduced by the last Labour Government to over-green our energy and leave us short with dear energy?
Caroline Flint
No, I do not accept that. We can clearly see that where wholesale costs have fallen the public as the bill payers have not seen a reduction in their bills—this has nothing to do with other aspects asked of these companies in terms of helping to tackle fuel poverty or helping to support the renewable sector—but when wholesale costs have gone up, the energy companies, and in particular the big six, are quick to remind everyone that is because their costs have risen. We expect the reverse to happen when wholesale costs go down.
As I said, the reason bills have risen is that the energy market is broken. We have already set out a number of proposals that we will put in place if we are elected in eight months’ time: an energy price freeze until 2017, saving the average household £120; all those over the age of 75 put on the lowest tariff; a ring fence between the generation and retail arms of vertically integrated energy companies; a pool for all electricity to be traded in, and greater transparency for trades in the gas market; and a tough new regulator with new powers to police the market and protect consumers, including new powers to protect off-grid households and small businesses, and to force energy companies to cut their prices when wholesale costs fall if they do not do it first. All of these proposals have been put before the House, but Conservative and Liberal Democrat Members have voted against each and every one of them.
Energy Prices and Profits
Debate between Lord Redwood and Caroline Flint(12 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Caroline Flint
Yes, I do accept that, and in view of the Secretary of State’s comments, let me be absolutely clear about one thing. The opening words of the motion before us today rightly recognise
“the importance of the energy industry to the security and prosperity”
of the British economy. The companies that keep the hospitals warm, factories working and the lights on in 25 million homes are doing a pretty fundamental job for the British economy. They employ hundreds of thousands of people and create skilled apprenticeships right across the country. Over the next 10 years, we need these companies to invest in the UK—in new power stations, pipes and wires.
The idea, however, that the significant uplift in profits is all somehow to do with investment simply does not stack up. For one thing, if we look carefully at the profits and investment trends of the big six energy companies, as Bloomberg did last year, we see a very odd pattern emerge. The companies with the biggest profit margins have the lowest investment profiles, while the companies with the smallest margins are ploughing the most back in.
Moreover, at a time when the industry overall is enjoying unprecedented profits, we are not seeing anything like the investment that we need. Analysis by Bloomberg New Energy Finance shows that investment in clean energy has fallen by more than half since the last general election, and that under this Government just one new gas-fired power station, in Carrington in Manchester, is scheduled to open before the next election. Every other gas-fired power station that is coming on stream was commissioned, received planning permission and began to be constructed under the last Labour Government. In any case, the need for investment cannot mean allowing the energy market to fail consumers.
Mr John Redwood (Wokingham) (Con)
Does the right hon. Lady not understand that if she backs the most expensive and least rewarding forms of energy investment, to the tune of £110 billion—which is what she wishes to do—profits of less than £4 billion a year will not pay for all that?
Caroline Flint
The choice that we face is between moving to the energy market that is best suited to the future and continuing to incur the additional costs of the past. The Energy and Climate Change Committee has produced information about the cost of decarbonising our power sector, but has also drawn attention to the cost of not doing anything. I believe that the cost of staying stuck in the past would far exceed the cost of investing the amount that we need to invest in renewable and low-carbon energy for the future.
Fuel Poverty and Energy Efficiency
Debate between Lord Redwood and Caroline Flint
Caroline Flint
I agree; as I will say in my speech, when Warm Front closes on Saturday, it will be the first time since the 1970s that a British Government have not provided an energy efficiency programme. That is a shame. In answer to the hon. Lady’s second question, I believe that we should look at how we can better deal with the issue of energy efficiency. Although the motion does not cover the suggestion that she has made, we have outlined how we can use some money that is already available to get to some of the most vulnerable households.
The difference between Warm Front and ECO is that the Government pay for Warm Front, whereas consumers pay for ECO through their bills. Starting ECO is therefore no excuse for ending Warm Front before the budget is spent.
As a result of the choices that this Government have made, more people are being pushed into fuel poverty, more people are being forced to choose between eating and heating, and pensioners are going to bed early to seek warmth in a house that they cannot afford to heat. Not only Labour Members are saying that. Transform UK predicts that more than 9 million households will be in fuel poverty by 2016. The Hills fuel poverty review, which was commissioned by this Government, but about which we have heard little since its publication, warned that unless Ministers change course, 200,000 more people are set to be in fuel poverty in the next four years and millions of families will be pushed into even deeper fuel poverty. Before Christmas, the Government’s advisers on fuel poverty, the Fuel Poverty Advisory Group, predicted that 300,000 more people will fall into fuel poverty this winter.
Mr John Redwood (Wokingham) (Con)
I agree with the right hon. Lady that we want lower energy bills. Does she understand that America followed a much more successful policy than the EU by going for cheap gas? Would she recommend that the EU learns from America so that we can have cheaper gas for all our people as well?
Caroline Flint
We have to look at the diversity of our energy supply, but it is unfounded to suggest that there is a silver bullet in relation to gas, because it is unknown as yet. There is another side to what America has done. For example, 40 million people in America are involved in collective switching schemes and, at a local level, community energy generation programmes have been supported through investment. There are things that we can learn from our cousins in America and elsewhere.
However, we are debating the choices that have been made by this Government. The fact that expert organisations are telling all of us as policy makers that the number of people in fuel poverty is going up means that we have to address it. It has not happened by chance or by accident; it has happened because of the choices that this Government have made. They have chosen to end Warm Front. They have chosen to cut winter fuel payments. They have chosen to cut dramatically the support for vulnerable, low-income and fuel-poor households. I am afraid that that is something that they have to face up to.
Jobs and Growth in a Low-carbon Economy
Debate between Lord Redwood and Caroline Flint
Caroline Flint
That is the reality. That saddens me because the foundations had been laid for a journey on which I believed there was cross-party consensus, which Labour worked hard to achieve in this House. It worries me that we have a Government who are short of a coherent political vision. As a result, we are in danger of missing a golden opportunity, not just to reboot our economy, but to build a more resilient and responsible economy for the future, built on not just sustained but sustainable growth.
If we fail to grasp this opportunity, it will be the public who pay the price through jobs and growth going overseas and through higher energy bills, as we become ever more reliant on volatile fossil fuel prices. UK plc needs an active industrial strategy focused on growth, skilled job creation and a revival of Britain’s manufacturing sector, which can be both clean and green.
Caroline Flint
I will not give way to the right hon. Gentleman, because he was not here for the start of the debate.
Today, we can send out a clear message that a new industrial revolution is upon us and that Britain is determined to lead it. I commend the motion to the House.