Retail Energy

Alan Brown Excerpts

Thursday 12th October 2017 Commons Chamber

[Greg Clark]

I pay tribute to my hon. Friend’s personal energy in this matter. He has been assiduous and tenacious in pursuing consumers’ welfare. The reason for publishing the Bill for pre-legislative scrutiny was to build the consensus that I know he will participate in. Our proposal is for an absolute cap—to ensure a clear limit on what can be charged—but I know he has thoughtful views that he will want to convey during the scrutiny process.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I thank the Secretary of State for early sight of the statement and pay tribute to the hon. Member for Weston-super-Mare (John Penrose), the right hon. Member for Don Valley (Caroline Flint) and my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) for the cross-party way in which they have brought this to the House. I am sure that that is what has forced Government action.

With 18 million customers on default tariffs, today’s announcement is a welcome step forward. I hope that those customers get the benefit of the savings that have been talked about. We need to make sure, however, that there is not too much equalisation or coalescing of pricing around the cap and that customer service is not affected as a consequence of companies trying to find other ways to save money. As the Secretary of State rightly said, standard variable tariffs themselves are a problem. How will the Government guarantee that people are moved off them once and for all?

The end supplier is only a small component of energy bills. What steps will the Government take to review the profits that the distant network operators make? They make up a huge cost in energy bills. Government energy policy also impacts on energy bills. I refer the Secretary of State to the Hinkley project and the fact that future auctions have been announced but onshore wind cannot bid. To keep energy prices down, clearly we must have the most cost-effective energy generation policies in place, so it must be allowed to bid in the electricity generation market. In Scotland, the First Minister has announced that a public sector supplier will be set up and allowed to bid in the markets. Does the Secretary of State welcome that and is it something that the UK Government will follow? Energy efficiency is also a key component. The Scottish Government are committed to a warm homes Bill. Will the UK Government do likewise?

[Greg Clark]

I hope that the hon. Gentleman will be able to stay for the statement by my hon. Friend the Minister for Climate Change and Industry.

[Alan Brown]

indicated assent.

[Greg Clark]

He says that he will. I hope he will give a warm welcome to the proposals in the clean growth strategy, which will include something that many of his colleagues in Scotland, from all parties, have pressed for, which is the remote islands being entitled to bid in renewables auctions. I hope he will welcome that and, indeed, our leadership in renewables, not only in deployment—we are the world’s leader in offshore wind—but in the jobs being created around the United Kingdom in the supply chain.

When it comes to the proposals in the retail market that we have set out, I can confirm that it is absolutely the Government’s intention and requirement that competition should be preserved—indeed, extended—in this market. The Competition and Markets Authority said there was not enough of it at the moment. That is why part of its panel said that interim measures were needed while that competition comes in. That is important, and the requirement of the draft Bill is that Ofgem should take steps to ensure choice and vigorous competition as part of that.