Energy Tariffs

Caroline Flint Excerpts

Thursday 18th October 2012 Commons Chamber

[Caroline Flint (Don Valley) (Lab)]

(Urgent Question): Yesterday, the Prime Minister threw energy policy into confusion, causing chaos—

[Mr Speaker]

Order. At this stage, all that the right hon. Lady needs to do is to ask the Secretary of State to make a statement on the matter.

[Caroline Flint]

I ask the Secretary of State to make a statement on the matter.

[The Minister of State, Department of Energy and Climate Change (Mr John Hayes)]

Rising energy prices are a cause for concern in these difficult times, particularly for those vulnerable consumers who struggle to meet their bills. I am profoundly concerned and disappointed to hear of the recent energy price rises, and I will be seeking to discuss them with the relevant suppliers as a matter of urgency.

My Department has already taken a number of different actions to assist consumers with their bills. Programmes such as the carbon emissions reduction target, Warm Front, the green deal and the energy company obligation will make homes more energy efficient. In addition, the warm home discount will provide no less than £1.1 billion of support up to 2015 to help 2 million low-income and vulnerable households annually.

Following the Prime Minister’s announcement yesterday, I am pleased to confirm that we will be bringing forward legislation to help energy consumers to get the best deal. We have already regulated, we have plans to improve competition and simplify tariffs in the retail market process, and we will improve liquidity and competition in the wholesale market, through the Energy Bill, in weeks rather than months. A number of options are being considered. For example, the voluntary agreement with energy suppliers announced in April secured a number of measures which will be evaluated to see whether we should make the legislation binding. This is a complicated area, and we will have discussions with the industry, consumer groups and the regulator in order to work through the detail.

[Caroline Flint]

As I was saying, the Prime Minister threw energy policy into confusion yesterday, causing chaos in the energy industry and leaving his own Ministers at a loss over what Government energy policy actually is. It is no wonder that the Secretary of State has avoided coming to the House today to explain a policy that he knew nothing about until yesterday.

As energy bills have gone up by over £200 in the last two years, the public deserve an answer. Switching has fallen to its lowest level ever, and in recent days three of the big energy companies have announced another round of price hikes this winter, so it was not surprising that there was a great deal of interest when the Prime Minister told the House yesterday that

“we will be legislating so that energy companies have to give the lowest tariff to their customers”.—[Official Report, 17 October 2012; Vol. 551, c. 316.]

But now it appears that energy companies will not be forced to put all customers on cheaper tariffs after all.

Let me ask the Minister three straightforward questions. First, did he know about the announcement before it was made yesterday, or was the Prime Minister making it up as he went along? Secondly, can he confirm today whether the Government will be legislating to force the energy companies to put all their customers on the cheapest tariff—not through a voluntary agreement or through sending a letter once a year, but, as the Prime Minister said, legislating to make the energy companies put all their customers on the lowest tariff? Is that their policy or not? Thirdly, if that is their policy, will the Minister explain how it will work and when it will be implemented? If not, will he explain what the Prime Minister meant and tell us when he will return to the House to put the record straight?

We all mis-speak from time to time, and the Prime Minister was under a lot of pressure yesterday, but for the Government to spend a day pretending to have a policy that they have no intention of implementing is no way to run the country. It is like something out of “The Thick Of It”. In the past year, I have made the case for a radical reform of Britain’s energy market. The millions of families and pensioners who are worried about how they will heat their homes deserve better than policy made on the hoof, and the House needs answers.

[Mr Hayes]

You know, Mr Speaker, that it is not my habit to be excessively partisan in this House, and the British people will judge how to define “excessive” in the light of the fact that in 13 years the Labour party did so little to plan for our energy future. The right hon. Lady, who was a Minister when that party was in government, dithered and delayed and deferred key decisions about energy policy and investment, which has left us in the situation we face today. It is not so with this Government, who will bring forward the Energy Bill to reform markets, increase competition and secure investment, which should have been done years ago.

Let me answer the right hon. Lady’s questions very directly. She asked whether I knew what the Prime Minister was considering. Of course we understand what the Prime Minister was considering, as we have been debating and discussing the provisions of the Energy Bill for months. The draft Bill has been carefully scrutinised by the Select Committee—the excellent Select Committee on Energy and Climate Change, if I may say so—while the Opposition have made their views known, the industry is in constant dialogue with the Government on these matters and consumer groups are regularly consulted, so of course all these matters have been discussed and considered over the months.

With an alarming misunderstanding—or, at least a supposed misunderstanding—of parliamentary process, the right hon. Lady then asked how this policy would work and how would it be implemented. She will know that this Government take the Energy Bill so seriously that we are determined that it should have proper scrutiny in this House. During that scrutiny, we will of course discuss how these things will work and how they will be implemented. That is a fundamental part of the process by which legislation passes through this Parliament.

The right hon. Lady asked for an affirmation of our determination to tackle the issue of tariffs. Had she had the good fortune to be at the Conservative party conference, she would have heard me on a number of occasions articulating, with some style, the case for lower tariffs as a means of reducing demand and placing an emphasis on demand- side measures that the previous Government failed to do for almost their entire stewardship of the energy brief.

The answer is yes, we will use the Energy Bill to get people lower tariffs. There are, of course, different options to be considered in that process, but those options will be discussed with the industry and with consumer groups. More than that, they will be effective in a way for which only this Government—and I am bound to say, this Minister—are renowned. If I may say so, I have brought fresh energy to this brief, and I am determined that this Bill will be a landmark piece of legislation in the interests of the British people, delivering lower energy prices for businesses and households across the country.