Transport for Towns

Debate between Barry Sheerman and Caroline Flint

Tuesday 19th February 2019 Westminster Hall

[Caroline Flint]

That is an important point about young people. I will talk later about the fatalities in my constituency of young drivers, who are often forced into getting a car as it is the only means of getting around. These young people are not drinking or anything else but are just inexperienced drivers on our country and rural roads. That is a big problem.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

My right hon. Friend and I have been good friends for many years, and I think we share the desire for a really good rail link across the northern regions and the northern midlands. That is absolutely essential. We now know that HS2 will cost £100 billion. Does she agree that it would be better if we invested that money in good local transport across the north of England?

[Caroline Flint]

My hon. Friend is right to point out the rising cost of those major infrastructure projects. Many people around the country find it hard to believe how much money is spent on HS2 and other projects—in some cases misspent if the projects are not kept on budget—when they find it hard to find a few thousand pounds for something that could make a big difference locally.

Finance Bill

Debate between Barry Sheerman and Caroline Flint

Monday 5th September 2016 Commons Chamber

[Caroline Flint]

There is a debate about where best to recoup the money from those who trade and the profits they make. Different options are available, but perhaps that is a wider debate for another day. The BEPS—Base Erosion and Profit Shifting—debate was partly about addressing that, but transparency has to be at the heart of all this, whatever system we set up to identify what is a fair contribution for business. I hope that my amendment will be supported and will be one small step forward.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

My right hon. Friend knows that I support this amendment and the wonderful work she does. Does she remember all the difficulties we had with the banking sector and the people who were supposed to be the auditors—these great companies that are specialising in obscurity, hiding ownership and moving ownership? Surely this must go in tandem with taking on those big people who did not audit the banks properly. They are the same people who allow these big companies to evade taxation.

[Caroline Flint]

My hon. friend is right about that. As the Parliament that represents the people of this country, we have a duty not to allow markets to be unfettered, but to provide a framework in which they should operate, work, be successful and do the right thing. I must say that there are companies doing the right thing. Increasingly, companies are volunteering to do the right thing by publishing the sort of information that I am asking to be made more public today.

Climate Change

Debate between Barry Sheerman and Caroline Flint

Wednesday 10th June 2015 Commons Chamber

[Caroline Flint]

It is extremely worrying that so many Government Members are still in denial and refuse to accept the views of the majority of scientists around the world. Not only are they a threat to the environment; they are a threat to the jobs and opportunities these changes bring.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

My right hon. Friend and I have worked on environmental issues for a long time. Does she agree that there are very good people on the Government Benches who are extremely good on the environment and would like to speak out more, but are worried that that might harm their prospects in their party?

[Caroline Flint]

My hon. Friend is right. We want to hear more of those voices in the months ahead. Despite the fact that we will have our disagreements across the House, on this issue political consensus is key to playing our part not only on our national stage, but on the world stage.

--- Later in debate ---

[Caroline Flint]

Of course there should be a debate and people should raise their concerns. That is what the planning framework is about, but the hon. Gentleman knows as well as I do that the former the Secretary of State for Communities and Local Government sat on planning applications that had been agreed at a local level. I do not know what the answer to that is. It seems that when the public agree with something a big Secretary of State sits on them and—[Interruption.] By big, I mean the office of the Secretary of State. As we know, DCLG is a big office—it is much bigger than DECC, sadly, but there we go. I digress. The hon. Gentleman seriously cannot have it both ways. During the Parliament, we had a consultation on the guidelines. A number of Conservative Back Benchers thought that that was great and we were going to see an end to onshore wind farms. Actually, the consultation did nothing to change the guidelines on that. They were led up the hill and down again. I believe that there are ways in which we can enable communities to see greater benefits from these projects. I would like to see more community-owned wind farms. I would like communities to get more out of the wind turbines and the benefits to go directly into households in the communities. Rather than taking a more positive approach to the issue, the Tory party is just saying no.

[Mr Sheerman]

I am sure that my right hon. Friend would agree that Labour Members and many Members on the Conservative Benches want evidence-based policy—there has not been an ideological knee-jerk reaction saying all wind power is bad. I could give the example of the east coast of Yorkshire, where we have had an all-party, positive attitude. We have been working across parties together to get the vast investment with Siemens to get wind power from the sea.

[Caroline Flint]

I agree. There is a gap between what the Government say and what they do. That is bad—

Energy Prices

Debate between Barry Sheerman and Caroline Flint

Wednesday 18th June 2014 Commons Chamber

[Caroline Flint]

It is regrettable and worrying that, as I understand it, the number of families in fuel poverty is higher now than 10 years ago. All families deserve a good deal, whether they are in fuel poverty or not, but of course we need to give full attention to those who are most vulnerable.

As is to be expected, the companies have come up with all kinds of excuses, and I shall deal with each of them in turn. The first excuse is that even if wholesale costs have fallen, other costs have increased. Given that wholesale costs are by far the biggest single component of a household’s energy bill, making up about half of it, we would need evidence of quite dramatic increases in other costs for this claim to hold true. What might those other costs be? Energy bills are made up of five components: wholesale costs, network charges, environmental and social policies, and the supplier’s operating costs and profits. If we leave aside the operating costs and profits, which are within the company’s control, that leaves only two possibilities—network charges and policy costs, both of which, helpfully, are regulated by Ofgem or mandated by Government, meaning that we can test the companies’ claims.

According to Ofgem, network costs are up slightly, by about £7 on the average bill compared with last year, and are forecast to remain flat this year. So that cannot explain the gulf between wholesale costs and retail prices. What about environmental and social policies—the levies that pay for investment in clean energy, insulation and support for the most vulnerable? Given the cuts to schemes such as ECO, the energy company obligation, the fact that the warm home discount is now funded by the taxpayer and the cuts to the forecast increase in the carbon floor price, the claim does not ring true.

Undoubtedly, there are cost pressures, particularly from the small-scale feed-in tariff, but I hope the Secretary of State, who, after all, sets and monitors these costs, will agree that in no way can they account for the scale of the gap we are now seeing between the prices that companies pay for energy and what they charge their customers.

The second excuse we have heard is that the companies’ hedging strategies prevent them from passing on the reductions. What are these hedging strategies? One would be forgiven for thinking that they are a convenient device that enables the companies to complicate matters and confuse people whenever they are challenged about their prices. In fact, they are simply companies’ trading strategies, which determine how far out and in what quantity they begin to buy the energy they need for any given day. So what the energy companies are saying, in effect, is, “Sorry, we bought our energy on another day when it happened to be more expensive”—which, by the way, just happens to make their generation businesses more money, but let us not get into that for now.

It is impossible for anyone to verify the companies’ claims because they never disclose their hedging strategies, but I invite the House to be sceptical. In a properly functioning competitive market, we would expect that, given that wholesale costs are the largest single component of bills, there would be some motivation for companies to try to out-compete their competitors on that price. Adopting a different hedge might allow them to do that. Just to say that companies have different hedging strategies does not address the substantive question of whether they are adopting trading strategies that impose higher than necessary costs on consumers.

An even less persuasive version of that argument has been suggested. Some so-called analysts have suggested that the reason the companies have failed to pass on the cost reductions is the prospect of an energy price freeze. Although I welcome their confidence in a Labour victory at the next general election, I must say that of all the excuses I have heard in my time in this job, that has to be the most ludicrous. The idea that the day after my right hon. Friend the Leader of the Opposition made his speech on 24 September last year all the energy companies went out and bought up all their energy for the next four years does not stand up to the slightest scrutiny.

Let me be clear: if there is any evidence of suppliers colluding to inflate their margins, which I am sure the Competition and Markets Authority will monitor with great interest, and if this Government refuse to take action, we will. Of course, if we had greater transparency in the way energy is bought and sold in the first place, as Labour has proposed through our electricity pool and ring fence, the issue would be a lot clearer for everyone.

The final excuse we have heard is that nothing untoward could possibly be happening because the energy market is so competitive. Switching is up, we are told, and competition has never been more vigorous, but the facts speak for themselves: wholesale costs have fallen substantially, and over a sustained period; and not only has none of the major suppliers cut its prices, but none has even indicated that it has any intention of doing so. Indeed, some suppliers have actually ruled out price cuts this year. In its interim management statement, published last month, Centrica reported:

“No change expected in residential energy prices this year”.

However, as today’s motion notes, if competition was working effectively, we would expect wholesale cost reductions to be passed on as quickly and fully as wholesale cost increases, but we never see that. A report published by Ofgem in 2011 stated:

“We have found some evidence that customer energy bills respond more rapidly to rising supplier costs compared with falling costs.”

In its “State of the Market Assessment” this year, which led it to make a referral to the CMA, Ofgem again found that:

“There appears to be an asymmetry in how suppliers respond to changes in costs. We found that suppliers pass on cost increases more fully and more quickly than cost decreases.”

Furthermore, it observed that:

“The asymmetry we found was greater than when Ofgem performed a similar exercise in 2011.”

It is not just wholesale costs. It must be a bitter disappointment to the Secretary of State that four of the big six have still not passed on the full £50 saving to 3.7 million customers following the deal he struck with them on green levies in December.

This is not some passing trend that will correct itself in the fullness of time; it is a systemic problem in our energy market that is a result of deep-seated and fundamental flaws in its structure and regulation. Waiting for the CMA to report is not an option. Wholesale prices have been falling for the past six months, with no signs that consumers will benefit, and the CMA investigation, which has not even begun, will take a further 18 months to complete.

That being the case, the question raised is this: what should we do about it? In theory, there are two things that can protect consumers: competition, where companies compete on pricing and customer service to win and retain customers; and regulation, where consumers enjoy certain defined protections. But in the energy market competition is at best immature and regulation, at least on pricing, is non-existent.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will my right hon. Friend give way?

[Caroline Flint]

I will give way one last time.

[Mr Sheerman]

My right hon. Friend is very kind. Is there not another dimension to this? In the country, including my constituency, the consumer base is getting angrier and better organised, through social media and other ways. They will not put up with this for much longer.

[Caroline Flint]

Absolutely. People were told that technology—doing things online, for example—would always make things better, but that is not the case. The point applies to those who do not have the confidence to challenge and those with busy lives who just do not have the time. I seem to recall a previous Energy Minister admitting that he spent at least half a day trying to sort out his own energy bill. If he cannot do it, what hope is there for others?

Energy Price Freeze

Debate between Barry Sheerman and Caroline Flint

Wednesday 2nd April 2014 Commons Chamber

[Caroline Flint]

I am not surprised that energy suppliers, big or small, do not like having their prices frozen. I would be surprised if they did support it. However, when Stephen Fitzpatrick, the chief executive of Ovo, was asked whether it would affect his company model, he said:

“No I don’t think so, we set up our business to make sure that we are able to pass on the greatest amount of savings possible to energy customers.”

When asked, “Will you be affected?” he replied:

“No I think it will probably be great for our business to see any kind of pressure put on the big six.”

The same goes for Co-operative Energy. The big prize for Good Energy, Co-operative Energy, Ovo and the others is a reforming of the market to ensure that they have greater access to the products they wish to sell. There is a big prize for them that many of them support through our reforms.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I hesitate to interrupt a very good speech. Those of us who support the reference to the CMA worry that there will be another 18 months—there will be a new Government, which will obviously be a Labour Government—when we still will not have tackled the deep disaster of the mess that the Conservative party made of the privatisation of the energy sector. We need a fundamental look at energy, root and branch.

[Caroline Flint]

My hon. Friend is right. In the statement last week, I thought he made a very fair contribution, saying, “Look, there are real problems here that we all have to acknowledge, address and deal with.” I welcome the reference to the CMA, but we cannot allow the silence that some Government Members would now like to follow on this issue of public importance. That is why we have to draw a line in the sand and have a freeze. It is also why we should get on with some of the other ways in which we can address the reforms that are necessary in this market. I have been very open that there may be aspects of the CMA investigation into this murky world that will find other issues that Labour has yet to look at and that might be helpful to our reform programme. I very much welcome that, but we cannot allow this issue to be kicked into the long grass.

The report clearly highlights the need for reform in our energy market, as we have made clear for the last three years. It identifies five significant problems that are preventing consumers from enjoying the full benefits of competition. None of them is new.