Oral Answers to Questions

Bill Esterson Excerpts

Thursday 13th December 2012 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

10. What steps he is taking to help households with their energy bills.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

19. What steps he is taking to help households with their energy bills.

--- Later in debate ---

[Mr Davey]

The hon. Gentleman got a lot of questions in there. I have looked at the headlines but I cannot say that I have read the full report, although I certainly intend to do so. I agree that it poses some challenges to those who debate energy policy, because it suggests that with a high gas price prediction, we could see energy bills going up by, I think, £600, whereas under a renewables strategy it would be only £100. The Government are adopting a mixed-energy approach, so that we are not dependent on any single energy source and can therefore manage the risks, because we cannot know the future of gas prices or predict how the cost of renewables will go down. I believe that our approach is the best one for the British economy.

[Bill Esterson]

The cost of energy is crucial for the nearly 10,000 pensioners in my constituency, and I am worried about the Government’s policy to get people on to the lowest tariff. What would happen if the energy companies simply raised the price of the lowest tariff? How would the Secretary of State address that problem?

[Mr Davey]

We have taken a balanced approach in our tariff reform proposals, on which we are now consulting. We have tried to ensure that those people who are on so-called dead tariffs, or on unnecessarily high tariffs, will automatically be switched down to the lowest tariff, given their preferences. We have also tried to ensure that there will still be competition, in that there will be four classes of core tariff so that the energy companies will be able to compete using those tariffs. The key is to try to help people who do not engage with the energy market to get a good deal, as well as to ensure that competition can deliver for consumers and for businesses.