Energy: Tariffs

Baroness Smith of Basildon Excerpts

Tuesday 6th December 2011 Lords Chamber

Asked By

[Baroness Smith of Basildon]

To ask Her Majesty’s Government what action they will take to ensure that all energy companies provide a straightforward and easily understood tariff structure for customers, in the light of the report by Ofgem published on 1 December.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, the Government welcome proposals published last week for consultation by Ofgem to simplify tariffs and billing information. The proposals should make it much easier for consumers to understand and compare tariffs. It is for Ofgem, as the independent regulator, to take forward the proposals.

[Baroness Smith of Basildon]

My Lords, some things work better in principle than in practice. Is the Minister aware that Ofgem admits that its proposals to do the very things he just outlined may not be implemented until after winter 2012, and even then, only if the industry fully gets behind the changes? Given that the Daily Telegraph today reports that energy company profits are higher now than at any time since privatisation, and have risen by 40 per cent in the last three months alone, are the Government ever going to do anything to tackle this problem and help customers?

[Lord Marland]

The Government are going to do a lot to help customers. Ofgem’s proposals to simplify bills and make them transparent are ground-breaking—particularly the proposals to have standing order charges on the bill and set by Ofgem. Make no mistake: the Government’s entire policy is based on what is to the benefit of the consumer. That is at the heart of every decision we make. In the consultation process, this Government will be talking through the proposals with Ofgem. It is not surprising that they will not be implemented until 2012 because they are under consultation. Until the consultation is over, and Ofgem has had reports from the electricity companies, we will not be able to see the final outcome.