Domestic Gas and Electricity (Tariff Cap) Bill

Debate between Antoinette Sandbach and Mark Menzies

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

[Mark Menzies (Fylde) (Con)]

I pay tribute to my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy for bringing forward the Bill and for his hard work on delivering what the Conservative party promised—dealing with unfairness in the energy market. His dedication, and that of my right hon. Friend the Minister for Energy and Clean Growth, to ensuring that the most vulnerable customers are not left behind to pay extortionate prices for their energy should be commended by Members on both sides of the House.

However, I cannot escape the fact that, as a Conservative, I question it when any Government seek to intervene in markets. I accept that on occasion markets need some interference. Many require regulation, and unfair practices need to be tackled robustly, but the question is whether the level of market interference is necessary and proportionate. As we consider this Bill, we must ask whether energy companies are in fact employing unfair tactics against their customers. If so, can those customers avoid paying over the odds for electricity and gas? Is introducing a price cap on certain tariffs the only and/or best way to deal with this issue?

I point to significant increases in the number of new energy suppliers—their market share has risen from 2% in 2012 to around 18% in 2017—and the increasing number of customers who are now switching suppliers regularly. I would argue that that shows an improving picture, thanks to the measures that this Secretary of State and his predecessors have implemented to ensure that the energy market is open to new and smaller companies and to encourage switching. As a result of that success, I would argue that the Bill is unnecessary— I would argue that, but I cannot. We committed to introducing the Bill in the Conservative manifesto, and introduce it we shall, but that does not mean that I would wave it past without considering whether its provisions are entirely proportionate or if there are opportunities for improvement. I have marked reservations about a key part of this Bill—or, more to the point, a lack thereof.

No part of the Bill allows energy providers to challenge the level at which Ofgem sets the price cap, other than by judicial review. I have asked a number of written questions on this point, and it appears that the Government are simply not prepared to admit that this is an inadequate means of appeal against the cap. As a non-lawyer, I am always very suspicious of matters that are settled in the court, so let me explain why it is so important to get this aspect of the Bill right, why judicial review is inadequate, and why the right for energy companies to appeal to the Competition and Markets Authority must be written into the Bill.

In January, prior to the Government publishing the Bill, I asked them to name the countries that they had looked at that currently regulate retail energy prices. In reply, my right hon. Friend the Minister for Energy and Clean Growth stated that Canada, the United States, Spain and New Zealand had all been studied. However—this is hugely significant—as their markets were not previously liberalised, or had only recently been liberalised, all are in very different situations from that in this country.

The Government are clear. They accept that what the Bill seeks to do in this country—to impose a price cap in a long-standing liberalised energy market—has never been done before. We are sailing into completely unchartered waters. Should we not therefore proceed with some caution? The Bill does not; it sails off with abandon, trusting Ofgem to set the level of the cap. This major new power has the potential to alter the UK energy market with as yet unknown consequences, as the Government have effectively admitted through their decision not to release quantitative data in their impact assessment, but the Bill provides no check nor expert oversight of Ofgem’s decisions.

[Antoinette Sandbach]

Judicial review provides a remedy when Ofgem is acting unreasonably. If it is acting reasonably, it would not be possible for the energy companies to review the matter, but what they would do, as evidence given to the Business, Energy and Industrial Strategy Committee suggests, is to seek to delay the process through endless appeals to the Competition and Markets Authority.

[Mark Menzies]

My hon. Friend makes a valid point. We would not want a situation in which energy companies, especially big energy companies, seek to delay the implementation of the measure for that reason through appeals to the Competition and Markets Authority. Perhaps the Government could consider having a time-limited window of appeal lasting for a matter of weeks in which any appeal could be looked at by the CMA. I am not sure whether recourse to judicial review, with a case tied up in court and argued by incredibly expensive lawyers, is the solution to the problem. I am not sure where the transparency is in that, and I am not sure that judges are the best people to make a determination. I shall say a little more on that as I proceed.

Appeals on price controls are always to the Competition and Markets Authority. This is consistent with every other comparable sector, including telecoms, water, and aviation, and there are very good reasons why. Energy suppliers, just like National Grid and distribution network operators, invest huge sums into our energy infrastructure. The Treasury has estimated that approximately £250 billion of projects are in the pipeline in the coming years. All companies require certainty to deliver these projects and they only get this if Ofgem sets a fair and accurate price.

In most cases, if Ofgem gets it wrong, National Grid, DNOs and their shareholders can make their case to the economic experts at the CMA. They know that they have effective recourse against Ofgem’s decision and they have certainty that the CMA will not allow any price cap that places these billions of pounds of investments into our vital energy network at risk. Under the Bill, however, retail suppliers are being sent out on to the high wire only to find that this effective and long-standing safety net has been removed from beneath them. Should Ofgem fail, the Government believe that judicial review will adequately cushion their landing. It will not.

As I have mentioned, the CMA is designed precisely to consider such appeals. As an expert appeals body, it has specialist panels with experience of deciding whether price controls have been set properly through consideration of the economic merits of each case. In contrast, a judicial review would consider only whether Ofgem reached its decision reasonably and in accordance with the relevant procedure. A judge with legal—not economic —training and with no specialist expertise would be asked to assess whether these deeply technical price control issues were fair and accurate.

If we follow through with this and allow such uncertainty to fester, even if only in the minds of our major energy suppliers, what assessment has been done of the impact of that on investment in our energy market? What assessment has been done of the impact that the initiative will have on the prices that consumers on non-default tariffs will be asked to pay? I have asked to be furnished with that information, but the Government do not have it. They answered that this calculation will depend on the methodology employed and the ultimate decision taken by Ofgem when setting the level of the cap.

I can be persuaded to agree that the Bill should pass without considering the future supply in this country—at least for this afternoon. I can be persuaded to agree that Ofgem sets the methodology. I can be persuaded to agree that Ofgem sets the level of the energy price cap. However, I cannot be persuaded, because it defies simple logic, that Ofgem has the sole preserve of wisdom in these matters. I cannot be persuaded that there should be no possible recourse to the Competition and Markets Authority.

Maternity Units: Bereavement Care

Debate between Antoinette Sandbach and Mark Menzies

Monday 2nd November 2015 Commons Chamber

[Antoinette Sandbach (Eddisbury) (Con)]

It is a huge honour to follow my hon. Friend the Member for Colchester (Will Quince) who has spoken with such courage about the experience that he and his wife had with the birth of their son. I know that there are many parents who will have had similar experiences, and it is a testament to the support that he received during his son’s birth and death, which he spoke about so movingly, that he has the strength to speak today.

I am grateful to my hon. Friend for asking me to contribute to his debate. Certainly I would not be able to speak in this debate without the support that I received. The night my son died, I woke to find him not breathing. Arriving at hospital, after looking at a flat line in the ambulance for more than 20 minutes, a crash team was waiting for me, but it was too late. The consultant neonatologist was a calm and reassuring presence, and the nursing staff were patient. I readily agreed to a post mortem, as I wanted to know exactly what had happened. Staff at the hospital were wonderful, but I found myself in a plain room with questions being asked of me. I was told that I had to wait for the police. I had left in such a panic that I had left my telephone behind and I could not remember any telephone numbers, and I was there on my own. [Interruption.]

[Mark Menzies (Fylde) (Con)]

I thank my hon. Friend for giving way in what is a very, very powerful and emotional contribution. Does she agree that this Government are making great strides to help support parents who are at a very vulnerable point in their lives? I look forward to seeing her, during our time in this House, helping to move the debate forward.

[Antoinette Sandbach]

I certainly do agree with my hon. Friend, and I am very grateful to him for his intervention. That night, I was given a leaflet by the Chrysalis Trust, on which there were telephone numbers that gave me invaluable information about the help that I could access.

I arrived home later that morning to find police officers going through my house. Clearly, they had to investigate the death as it had been away from the hospital. I had to explain to my six-year-old what had happened. It was then that the advice in the leaflet came into its own, because it was made clear to me that I should not say that my son had gone to sleep. It was at that point that I realised that I would need additional help, as I did not know how to cope with what had happened. I called the number for the Chrysalis charity, and it organised counselling for me, which was a lifeline.

I owe a huge debt of gratitude to John from the Alder Centre at Alder Hey hospital, as there was no counselling available in north Wales, and the counselling that was provided was funded through the Chrysalis charity with the aid of a small grant from the NHS trust. The grant was subsequently withdrawn, forcing the closure of that charity.

The two hospitals that serve my constituency, Leighton hospital and the Countess of Chester, both have specialist rooms for babies who are known to have limited life expectancy following birth, with one-to-one-care offered. The support of those staff is invaluable and Leighton, which has an award-winning maternity department, has a trained bereavement midwife. For parents who suffer loss, however, counselling services can be accessed only via a referral from their GP. The Countess of Chester has the newly equipped Lavender suite, with a cool cot that allows parents to spend time with their baby, but a parent presenting at A&E or through the child unit would not have access to that suite. There is a full-time counsellor at the trust, but the workload means that it can be several weeks before a parent can get support. Both hospitals refer to Sands, which has volunteers rather than trained counsellors.

Bliss outlines that 41% of neonatal units nationally say that parents have no access to a trained mental health worker, with 30% of neonatal units saying that parents have no access to any psychological support at all. The Alder Centre offers 24-hour bereavement support and, as the centre has said to me:

“It is important to slow down the decision making to give parents the space in which to make informed decisions, it is vital to have that talking support with someone who can say to you it is alright, take your time.”

Fifteen babies die a day, and there are five deaths a week due to sudden infant death syndrome. That figure has been the same for the past 20 years.

Charities working in this field, such as Sands, Bliss, Group B Strep Support, the Lullaby Trust and Tommy’s, need data so that they can target their research and consider potential common factors contributing to our high infant mortality rates. I urge the Minister to ensure that the British Association of Perinatal Medicine guidelines are followed and that psychological support is available for parents who suffer a perinatal, stillbirth or sudden infant death. I am aware that the Government have made a commitment to put mental health services on an equal footing to physical health services. This area clearly needs careful consideration and a greater degree of concentration by clinical commissioning groups and NHS trusts. I know that there is a national perinatal epidemiology unit at Oxford and would be grateful if the Minister updated us on that and on what has happened to the NHS England plan to support those with counselling needs, the report on which was due to be submitted in March 2015.

Support for parents is arguably just as important, if not more important, when the dreams and hopes of a new baby’s arrival are shattered. The national standards exist, but it is vital to ensure that they are complied with so that every parent has access to the help and support they need.