Oral Answers to Questions

Alex Cunningham Excerpts

Thursday 16th December 2010 Commons Chamber

[Hugh Bayley (York Central) (Lab)]

3. When he last met representatives of (a) Ofgem and (b) energy suppliers to discuss consumer energy prices.

[Alex Cunningham (Stockton North) (Lab)]

11. What recent discussions he has had with gas and electricity suppliers on trends in energy supply costs to domestic consumers; and if he will make a statement.

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

With permission, Mr Speaker, I shall answer Questions 11 and 12 with Question 3.

Department of Energy and Climate Change Ministers and officials meet both Ofgem representatives and suppliers regularly to discuss market issues. Ofgem monitors the market closely, and reports quarterly on retail prices. Its latest report shows large increases in estimated supplier margins—that is, profits—for the year ahead, which are mainly due to recent price increases. I am disappointed by that development, and I welcome the announcement of Ofgem’s review of the retail market. We are also taking other measures to encourage new market entrants to provide new competition.

--- Later in debate ---

[Mr Speaker]

May I remind the House of my keenness to get down the Order Paper and accommodate as many Back-Bench Members as possible?

[Alex Cunningham]

According to the House of Commons Library, between 1996 and 2004 the number of households in fuel poverty fell from 6.5 million to less than 2 million, but now, in the face of massive increases in energy prices, it has nearly doubled again to more than 4 million. Does the Secretary of State agree that energy companies must cut prices now and reflect the reality when wholesale prices go down, and does he also agree that those companies should play a greater part in tackling fuel poverty?

[Chris Huhne]

This is a real problem, in part because fuel poverty reduction is an objective for which the Government are not solely in control. Clearly, as energy prices bounce around, people get brought into or leave fuel poverty. As part of the fuel poverty review, I want us to set clearly obtainable objectives to deal with the root causes of fuel poverty. One key issue is that those on the lowest incomes often have enormously variable energy bills—varying, in fact, by a factor of six. If they are in modern social housing they can have low energy bills, but they can have very high bills if they are in private rentals. We must deal with energy efficiency issues.