Energy Company Licence Revocation

Lord Barker of Battle Excerpts

Wednesday 3rd September 2014 Commons Chamber

[Jonathan Reynolds]

There is not a tension between the pursuit of affordability and the pursuit of decarbonised energy supplies—or, at least, there is not a problem that we cannot resolve. Yes, renewable energy is more expensive than, for instance, coal, on which the hon. Gentleman may be particularly keen, but surely that makes the transparency of our energy market more rather than less important. The need for us to ensure that there is a downward pressure on energy prices becomes more of an imperative when we are making that transition.

I am sorry that I did not respond to the hon. Gentleman’s point about solar tariffs. No one opposes the digression in tariffs and subsidy structures, but surely he recognises—

[Gregory Barker (Bexhill and Battle) (Con)]

rose—

[Jonathan Reynolds]

I will give way to the right hon. Gentleman in a moment.

Surely the hon. Gentleman recognises that the way in which Governments do that is important—and this Government have been notorious for chopping and changing policy on so many occasions. A business that is trying to invest and to provide jobs in this sector simply cannot continue unless the Government make the position clear.

--- Later in debate ---

[Jonathan Reynolds]

I am afraid that I must now give way to the right hon. Member for Bexhill and Battle (Gregory Barker), who is, I believe, the longest-serving energy Minister for a decade. I certainly cannot allow the debate to end without allowing him to intervene from the Back Benches.

[Gregory Barker]

I am grateful to the hon. Gentleman for giving way. He says that no one would oppose the digression in solar tariffs. May I point out that the entire Opposition Front Bench opposed it, and that their opposition would have forced up energy bills? He may not have been on the Front Bench at that time—it was some time ago—but I am sure that he would have been among the serried ranks of Labour Members who voted to keep bills higher.

[Jonathan Reynolds]

I was there on that day, and I am sorry that the former Minister cannot remember that moment. Let me simply say to him, again, that the way in which the Government have gone about policy changes of that kind has caused terrible damage to important low-carbon parts of our economy. Let us look at what has happened quite recently. Let us look at the green deal for home improvement. There have been quick changes in policy which businesses cannot survive and with which they cannot contend. The same thing happened in the case of the energy companies obligation.

[Gregory Barker]

rose—

[Jonathan Reynolds]

I will give the right hon. Gentleman one more go, although he has not been present during the debate.

[Gregory Barker]

May I make one last point? The hon. Gentleman says that the digression that we imposed caused terrible damage. May I point out that since we reformed that feed-in tariff, more than 3 GW of solar have been added? Ours has been among the fastest-growing solar markets in Europe, and it is a legacy of which I am incredibly proud.

[Jonathan Reynolds]

The right hon. Gentleman and I have had this discussion before, and he knows that I am always keen to give credit to the Government for the increase in solar. By that, I mean the Chinese Government. They have done fantastic things to bring prices down, and we in this country have been able to benefit from that.

I will end my speech soon, Madam Deputy Speaker. Let me end by saying that if the Government vote against our proposal to create a real deterrent, we will point out— every time further action is taken—that they did not use the opportunity to give the regulator real power to hold companies to account. Labour candidates for constituencies up and down the country will make clear that they support the measures that we propose. We will also tell people not just how long we have been discussing these issues, but how long it will be until the next general election, because then, and only then, will we have a chance to change the energy market, secure a good deal for customers, and make a switch that will truly count—the switch to a Labour Government, a Government who, for once, will be serious about taking on the issues.

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[Amber Rudd]

It is always partly carrot and stick, is it not? We have to make clear to consumers what the opportunity is; otherwise, they are going to be reluctant to change. However, I am sure that we can, and I hope to win over my hon. Friend’s support in due course.

The hon. Member for Llanelli (Nia Griffith) spoke about her concerns for consumers, and she has done so on many occasions. I am just concerned that she feels so strongly about this one motion and feels that the proposal would be a silver bullet to sort out the problems for consumers. I cannot share her view.

It was a pleasure to hear from my hon. Friend the Member for Warrington South (David Mowat), who is very experienced in the market in general. He made the point that the Opposition’s proposal, although worthy of consideration, completely fails to convince because it has no example and therefore no factual base. In his focus on lower prices for consumers, he pointed out we have the lowest gas costs in Europe. He demolished Labour’s energy policy with particular focus on how it lets consumers down.

The hon. Member for Bolton West (Julie Hilling) again focused her rationale on the Labour proposal as though it were some sort of silver bullet to rectify the entire market. We are taking action to rectify that market and we are making progress. She insists that this power is needed while failing—as did her fellow Labour Members—to give an example of which company would be liable to this nuclear option and why.

I was delighted to hear from my hon. Friend the Member for South Derbyshire (Heather Wheeler) who made a powerful speech, as always, about the importance of investment in energy in her constituency, and expressed her concern that this Opposition proposal is gesture politics and would undermine crucial investment that we are securing from international investors.

The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) chose to comment on the difference between our parties regarding regulation. I cannot let that pass. He had the temerity to refer to the regulation of the banks in 2007. The banks were regulated by the Bank of England for decades until Labour’s tripartite arrangement, which was an unmitigated disaster. If the House needs evidence of the results of Labour’s regulation, it need look no further than the banking crisis. The hon. Gentleman was also wrong on fuel poverty, which is falling, and wrong on the support that we are rightly giving to consumers.

[Gregory Barker]

First, may I congratulate my hon. Friend on a fantastic debut at the Dispatch Box? She is going to make a great Minister. She is also absolutely right to draw the House’s attention to Labour’s knee-jerk reaching for regulation. We on this side of the House are committed to helping the consumer by creating dynamic competition and crowding in disruptive new entrants, whereas Labour will always reach for the red tape and regulation that are anathema to the real interests of the consumer.

[Amber Rudd]

I thank my right hon. Friend for his remarks. I am delighted to be following on from the good work that he has done.

It is good news that our work to break down barriers to entry in the retail energy market in order to create greater competition has resulted in an unprecedented number of suppliers operating in that market. Since May 2010, 12 new companies have entered the market, challenging the status quo, competing hard with the large established players and offering choice to consumers. During this period, more than 2 million electricity customers have switched to independent suppliers. The big six bequeathed by Labour are being replaced by the new challenger companies. We are driving competition in the market, and delivering more choice and a better deal for consumers. In 2010, there were just seven independent suppliers, all of which had fewer than 50,000 customers. Now, there are four independent suppliers with more than 250,000 customer accounts each, compared with zero in 2010. In that year, the share of the market held by the independents was around 1%, but it now approaching more than 7%.

We know that competition is not working as effectively as it should be, which is why we commissioned the first ever assessment of competition in energy markets from the competition authorities. It is also why we support the subsequent decision of Ofgem, based on a thorough, evidence-based assessment, to refer the energy markets to the Competition and Markets Authority. Tackling concerns about competition through a formal reference process undertaken by the expert authority will provide consumers, companies and investors with confidence that the process will be evidence-based, fair, transparent and free from political interference.

This Government are taking real action to make a real difference to hard-working households and businesses. We will continue our work to identify and address barriers to entry and growth, and to provide the right environment for the investment needed for the future. We will continue to build on the reforms that are already giving people a better deal on their energy bills. These include taking about £50 off average household bills, and introducing faster, easier switching and simpler tariffs and bills. We will allow the expert competition authorities to undertake their forensic examination of the energy markets. We must insist that reform of the market is driven by facts. We will not resort to the knee-jerk responses that we so often see from an Opposition seeking a headline. This motion epitomises such a response, but it would fail consumers, fail the market and fail in what it sets out to do. The Opposition have failed to make any sort of case in support of the motion, and I urge the House to resist it.

Question put.

The House proceeded to a Division.