Energy Prices

Debate between Lord Barker of Battle and Alan Campbell

Wednesday 18th June 2014 Commons Chamber

[Gregory Barker]

I make it a policy always to agree with my Prime Minister. I can tell the right hon. Lady what we said in 2009: we called for a competition inquiry. I can also tell her what the current Leader of the Opposition did: he declined it. He ducked it—he was frit. When he was in power, standing at this Dispatch Box, he sang the tune of the big six and ducked a competition inquiry. The British people have had to wait for the coalition for a comprehensive assessment by the competition authorities.

In contrast to Labour’s lurch back to the 1970s, the coalition wants to unleash disruptive new entrants and the exciting new breed of energy entrepreneurs. We do not want to lock in Labour’s big six; we want to replace them with the big 60,000, unleashing British entrepreneurial spirit. In addition, huge steps forward in consumer-friendly technology, coupled with our smart meter roll-out programme, mean that we could be on the threshold of an exciting age of far more empowered consumers and a decentralised energy sector, with a proliferation of new, young companies vying for consumers.

However, the Government do not pretend either that there is not much more to do or that we cannot improve the market further. There is indeed more to be done. Our job is by no means finished. As the Secretary of State clearly pointed out in reply to the opening of the debate, the Leader of the Opposition may have been in denial about the behaviour of the energy companies, failing to pass on falls in the wholesale gas price while he was in office, but we are not. A sensible, objective, dispassionate and thorough investigation by the independent Competition and Markets Authority is the way to get to the bottom of whether customers are being short-changed by energy companies.

Objectively policed and well regulated markets serve the best interests of consumers and deliver substantially and sustainably lower prices, not a return to the failed economic models of the 1970s. That is the nub of the choice before the electorate: break the grip of the big six by unleashing unprecedented competition and innovation, ripping down barriers to entry and unleashing a robust and thorough market investigation; or go the Labour way, suffocating the industry with red tape, driving away competition, snuffing out the challenge from the new entrants, torching investment and wasting valuable years creating yet another Labour quango. It is a pretty simple choice: the future or the past?

My hon. Friend the Member for Rossendale and Darwen (Jake Berry) was clear: we choose the future. He was right to point out that fuel poverty doubled in the last Parliament, when Labour was in office, between 2005 and 2010. He put himself firmly on the side of disruptive new entrants such as Ovo and ambitious 24-hour switching. My hon. Friend the Member for Tamworth (Christopher Pincher) was right to point out that the big six were Labour’s creation. Every time the Leader of the Opposition opines on energy, he drives up the cost of capital, and it is consumers who pay the price.

My hon. Friend the Member for Warrington South (David Mowat) made a thoughtful and well informed contribution, like his previous contributions. Sadly, we have to conclude, like him, that Labour has nothing serious to say. My hon. Friend the Member for Daventry (Chris Heaton-Harris) comprehensively demolished the Opposition policy. He is absolutely right to point out that price controls stifle investment and kill competition.

As for Opposition Members, the hon. Member for Newport West (Paul Flynn) made a rather ideological speech about nuclear power, which contrasts with the pragmatic and considered investment in our nuclear programme announced today by China. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) made a rather sanctimonious speech, but the policies he supports would actually hit the people he professes to help and result in fuel poverty soaring, just as it did during the last Parliament. He is also in denial about the progress we are making. The hon. Member for Llanelli (Nia Griffith) might be sincere in her beliefs, but she is in cloud cuckoo land when it comes to investment. Under the coalition, investment in renewables has gone up sharply. In this Parliament, average annual investment in renewables is up to nearly £7 billion per annum, compared with £3 billion per annum in the last Parliament.

The fact is that the coalition has a plan. We have a long-term economic plan and, what is more, we are delivering for British consumers. The Labour party, by contrast, has not got a clue, and it is British consumers who are paying the price.

[Mr Alan Campbell (Tynemouth) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

Energy Price Freeze

Debate between Lord Barker of Battle and Alan Campbell

Wednesday 2nd April 2014 Commons Chamber

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

This has been a lively debate with excellent speeches from across the House on this critical issue. I apologise for leaving the Front Bench for a short while. I had to go upstairs and pass the last piece of the legislative jigsaw for the renewable heat incentive—a ground-breaking piece of legislation of which the coalition is proud.

The fact that the referral of the energy market to the Competition and Markets Authority commands cross-party support is to be welcomed, as is cross-party support for our reforms to the electricity market to support clean energy generation, and the cross-party consensus on meeting our climate change objectives. Consensus on energy policy is not a product of the soggy centre, but something to which a responsible politician in government, or opposition, should aspire.

In practical terms, I am glad that behind the bravado, if we listened carefully we could just about make out the muffled echo of the Labour party sounding a retreat, and we may be inching back towards greater consensus on the strategic direction of policy. The Labour party is being offered an elegant way out of its discredited, disastrous, made-for-a-soundbite energy policy. As attractive and tempting as it might be in the age of social media to offer electorally attractive but fundamentally undeliverable policies, the fact remains that investment certainty and a better deal for consumers that moves to a clear energy system is a complex proposition. Effective energy policy in government requires well thought through proposals that command the respect and support of consumers and investors alike.

A clear demonstration of policy grip was shown by the Chair of the Energy and Climate Change Committee, my hon. Friend the Member for South Suffolk (Mr Yeo), whose speech I thought was a tour de force. In his characteristically elegant way he made the key and most important point—which was completely lost on the Opposition—that the Government cannot control the global wholesale price of gas, and that that is the key price maker for UK electricity. The Government can no more control the price of gas than King Canute could command the waves, and to pretend otherwise is to con the British public. My hon. Friend’s second point, which is that an attempt by any Government to freeze prices with such a draconian arbitrary intervention in the energy market would have a terrifying chill on investment across the sector, was heard loud and clear across the Chamber. As my hon. Friend said, we know the price freeze is a cynical political manoeuvre, designed to prop up the dominance of Labour’s big six.

We heard many other excellent interventions. My hon. Friend the Member for Warrington South (David Mowat) spoke powerfully about how a price freeze will damage investment in new capacity, and my hon. Friend the Member for East Hampshire (Damian Hinds) was right to focus on putting consumers first and foremost in energy policy. We do not often hear from Labour about putting the consumer at the heart of energy policy, but the coalition is determined to do that.

My hon. Friend the Member for Bracknell (Dr Lee) pointed out the complexity of the energy markets and said we should focus more on energy efficiency, and I absolutely agree. We heard contributions from other Members, including the hon. Member for Southampton, Test (Dr Whitehead), who I thought was uncharacteristically ponderous and rather tiptoed around the illogicality of the Labour price freeze. We also heard contributions from the hon. Members for Angus (Mr Weir) and for Newport West (Paul Flynn). The hon. Member for Glasgow North West (John Robertson) said, in reference to the price freeze, that it is not a con to try something. I know he is sincere, but it is a con to try to sell something to the public when we know in our heart of hearts that it cannot work, and when every major commentator and expert in the field has said that it cannot work. That is trying to perpetrate a con.

The bottom line is that Labour’s hit-and-run soundbite energy policy is not credible to consumers or investors. When it comes to UK energy policy, Labour has a hashtag, but we have a long-term economic plan. Labour talks of a bill freeze; we act to cut bills. Labour’s big answer is a new quango; we are delivering real action. Labour’s answer to our problems is more red tape; we want more competition. Labour put its trust in its new super-bureaucrats; we believe that the answer lies not with more bureaucrats and their super quango, but with entrepreneurs and dynamic new entrants—those are the keys to competition. Labour wants to go back to the 1970s and put Whitehall at the heart of energy markets; we, as my hon. Friends have pointed out, want to empower consumers. Labour wants the best tariffs for the over-75s; we have acted to put everyone on the best tariffs.

Let us not just critique Labour’s record in opposition because we should not forget its record in government. Labour created the big six—[Interruption.] Yes, Labour Members may squeal; they hate to be reminded of it, but that is the fact. Labour created the big six. It had the opportunity to refer the issue to a competition inquiry, and not just Labour but the Leader of the Opposition failed to do so. Labour was responsible for the investment desert that characterised 13 years of under-investment in energy capacity. We saw contraction of competition under Labour, but the coalition is unleashing a new era of competition. Labour Members know that wholesale prices cannot be controlled. We would not know that from listening to them, but why else did gas prices double when they were in government and why else did electricity bills go up by more than 50% on their watch?

We know that we cannot control the world price, but that does not mean we stand aside from the market. We are rolling up our sleeves and making real reforms. Since day one, we have worked to make the energy market more affordable, and to increase competition and unlock much-needed investment. We have made the energy market easier to navigate by forcing energy companies to put people on to the lowest tariffs. We have slashed the number of tariffs we inherited from Labour from 400 to just four per supplier, and forced suppliers to put consumers on the cheapest variable tariff. This month we confirmed that we will halve the time it takes to switch providers to just two weeks. We plan to make that even faster: we have made a commitment to 24-hour switching and we will deliver on it. As The Sun says today, switching is the best hope for consumers.

We are making the energy market more affordable by forcing energy companies to compensate customers for mis-selling and overcharging. Labour did not do that; we have legislated for it. We have given Ofgem new powers to force energy companies to compensate consumers for mis-selling and overcharging. We have also provided discounts and financial support to help people to pay their bills, including £130 off energy bills for 2 million households this winter. We have protected 12.7 million pensioners’ winter fuel payments, made cold weather payments to more than 4 million people, and cut taxes that add £50 to energy bills.

Last week, SSE announced a price freeze. This is not a Labour-style, 1970s legislatively imposed price freeze that would kill investment and scare away investors, but a price freeze borne of competition and an increasingly competitive market. SSE said that decisions taken to reduce delivery costs of the energy company obligation, and decisions announced by the Chancellor in the autumn statement, were the principal factors in it being able to make this price commitment.

We are making the energy market more competitive by deregulating the energy market to encourage vital new entrants. Nine new entrants have entered the market in the past two years alone, and the number of customers with independent suppliers has trebled under the coalition. We are forcing the big six to play fair with small suppliers.

[Mr Alan Campbell (Tynemouth) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

Energy Prices and Profits

Debate between Lord Barker of Battle and Alan Campbell

Wednesday 4th September 2013 Commons Chamber

[Gregory Barker]

No, I will not.

The winter fuel allowance is helping 12 million pensioners with up to £300 this winter. Cold weather payments have been permanently uprated to £25 per week, and the green deal ECO programme has already made more than 100,000 homes warmer and cheaper to heat and run. The first proper, independent, thoughtful review of our fuel poverty strategy for decades was completed this year. We are targeting finite resources at the most in need in the fairest, most cost-effective responsible way.

Where Labour shrunk the domestic energy market and presided over massive corporate consolidation, we are unleashing a decentralised energy revolution on new distributors of energy on an unprecedented scale— 2.5 GW of solar alone under this coalition. Community energy, distributed energy and heat networks—all are on the up. At the same time we have begun the first new nuclear programme in a generation. Our green investment bank, created by this coalition, is now up and running and transforming the energy investment landscape. No wonder Ernst and Young last week moved the UK from fifth to fourth in the global league table for renewables, and called the UK the best place in the world to invest in onshore wind.

[Mr Alan Campbell]

(Tynemouth) (Lab): claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

Solar Power (Feed-in Tariff)

Debate between Lord Barker of Battle and Alan Campbell

Wednesday 23rd November 2011 Commons Chamber

[Gregory Barker]

I am afraid that the hon. Gentleman is wrong. The impact assessment relates to no change until April next year, and then there will be degression, as planned by the Leader of the Opposition when he was in government and set up this poorly conceived scheme last year. So, as I say, I am afraid that he is incorrect on that point.

We have had some extremely sensible contributions. The one from my hon. Friend the Member for Montgomeryshire (Glyn Davies), in which he flagged up the impact that the scheme will have on not only fuel bills but the fuel-poor, was absolutely right. Too often the voice of the fuel-poor is distorted. Yes, it is great for the few thousand who may benefit from solar panels in social housing, but what about the other 5.5 million whom Labour left in fuel poverty, who will not benefit but would still face the prospect of £80 on their electricity bills? Go and tell the other 5.5 million people who will be left out how they are going to find the extra £80 if we do not act now.

My hon. Friend the Member for Dudley South (Chris Kelly) was spot-on in his analysis and my hon. Friend the Member for Loughborough (Nicky Morgan) was right. I am afraid there is absolutely no sign of anything that even looks like a “Sorry” from Opposition Front Benchers for the mess they made of setting up the scheme. My hon. Friend the Member for Truro and Falmouth (Sarah Newton) was right: we need to learn the lessons from Labour’s failed scheme, particularly because although the feed-in tariff scheme supports solar, it also supports a whole range of other technologies. We must not forget that. We want a diverse, innovation-rich, decentralised energy economy, and there is a lot more to the feed-in tariff scheme than solar alone, important though that is.

My hon. Friend the Member for Sherwood made excellent points about Germany. He was spot-on when he said that we need to pull solar into the mainstream of the green economy, rather than leaving it as a bubble in a silo at one side. That is why the launch of the green deal will bring solar into the mainstream. That is a very exciting proposition. The hon. Member for North Cornwall (Dan Rogerson) also made some excellent points, and I share the view that we need to have a consistent regime. [Hon. Members: “They’re all on your side.”] The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) listed and spoke at length to Opposition contributions. I have very limited time, so I am going to mention those from my hon. Friends first.

However, I recognise that there is genuine concern about the implementation of the reference date of 12 December, and that it will be a real challenge for a lot of companies. We did not do this lightly. We have had to move quickly in order to protect the budget. Unfortunately, if we had not done so we would have had to do what Labour did in the past and close the scheme completely. We will not do that. We are protecting the scheme for the long term and for sustainability. This is a genuine consultation. We are constrained by the budget and by demand, which is going through the roof, but at the same time, I am listening carefully to the many sensible representations—

[Mr Alan Campbell (Tynemouth) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2) and Order, 14 November), That the original words stand part of the Question.