Energy Prices

Caroline Flint Excerpts

Thursday 16th March 2017 Commons Chamber

[Caroline Flint (Don Valley) (Lab)]

My hon. Friend makes an important point. It is worth everybody reading that report from the Committee on Climate Change. Does he accept that part of that 9% of the bill goes on helping people—sometimes the poorest in our communities —to reduce their household bill by introducing energy efficiency measures? It is a worthwhile 9% investment.

[Mr Wright]

Absolutely, and as my right hon. Friend, who has done fantastic work on this, knows all too well, energy efficiency measures are a key plank of ensuring our competitiveness, tackling fuel poverty and addressing our decarbonisation targets. Everybody wins when energy efficiency measures are prioritised.

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[Caroline Flint (Don Valley) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Brent Central (Dawn Butler). I congratulate her on the work she has done serving communities and families that are over-reliant on prepayment meters, and it is a welcome change that they will get some help in the months ahead. I would also say that I have a number of people living in the private rented sector in my constituency—I am sure the proportion is far higher in her constituency. It is a big problem for tenants when landlords do not do enough to make sure that the homes they rent out—they often get housing benefit from the state for doing that—are not decent homes with proper energy-efficiency measures. I know that my hon. Friend will carry on working on behalf of her constituents and people elsewhere.

I would like to thank the co-sponsors of the debate, the hon. Member for Weston-super-Mare (John Penrose) and the hon. Member for North Ayrshire and Arran (Patricia Gibson), who helped to secure the support of 50 other hon. and right hon. Members to obtain this important debate.

My thanks also go to the Backbench Business Committee—Parliament’s own “Dragons’ Den”—for agreeing to our application. It was only five minutes before we went in that I realised the meeting was going to be broadcast, so I had to get my act together quickly, but we were clearly successful, and we secured this debate for today.

It is well known to family and friends that I love the movies. [Hon. Members: “Hear, hear!”] Thank you. It is still on my bucket list to be an extra in one—I just put that out there. One of my favourite comedies is “Groundhog Day”, in which the character played by Bill Murray has to replay a single day until he sees the error of his ways. For me, today’s debate feels like “Groundhog Day” because we are reliving the same arguments about our uncompetitive energy market, companies’ poor customer service and ripping-off of customers on standard variable tariffs—points I have made for the past six years. The Ministers keep changing, but I am still here, and I hope that the Minister today, like Bill Murray in the film, will break this spell, because, not for the first time, the headlines have, as hon. Members have mentioned, been full of the eye-watering price increases made recently by four of the big six energy companies—price hikes that are completely unjustified.

However, in many respects, that is not the principal reason for this debate. We sought the debate to address the fact that the energy market is not working; it is failing Britain’s consumers in almost every respect. It does not promote effective competition. The regional giants created after privatisation remain the dominant players in their home regions 30 years later. We talk about the big six, but for many regions, it is the big one.

The energy market also does not promote transparency. In the period following the Thatcher privatisation of British Gas in 1986 and of the regional electricity boards in 1989, there was a succession of mergers and takeovers. That led to companies being, at one and the same time, energy retailers and power generators. Today, the generation and retail arms of these companies remain within pretty much the same corporate structures. One consequence of that is a complete lack of transparency over the price at which these companies sell energy to themselves before retailing to the public. The reforms Labour proposed in 2015 would have resolved that.

The energy market does not promote consumer confidence. The issue is not whether, superficially, one company offers a fixed-price deal for £150 less than another; it is why 88% of consumers still refuse to switch from one supplier to another. The evidence from the CMA survey of 7,000 consumers was clear: 56% had never switched supplier, or did not recall ever switching, and 72% had never switched tariff with an existing supplier. This market is suffering a long-term crisis of consumer confidence. While a minority of customers shop around, the vast majority seem to want little or nothing to do with the energy companies.

That is not a sign of contentment—of millions of satisfied customers—but quite the opposite. The CMA found that the number of recorded customer complaints rose sixfold from 2008 to 2014. Ofgem’s own research between 2014 and 2016, which was published in September 2016, found that the proportion of domestic complainants who were very dissatisfied with how their complaint was handled increased significantly over that two-year period. The most recent figures showed that 67% of npower customers and 64% of Scottish Power customers were very dissatisfied. Even the medium-sized and smaller companies were not immune—we cannot let them off the hook. First Utility performed worst, with 63% of customers very dissatisfied. The figure for Utility Warehouse was 53%, and for OVO, it was 49%.

The Government preside over a domestic energy market that is not competitive, lacks transparency and has a hell of a lot of dissatisfied consumers. Those factors alone should ring alarm bells in Whitehall and Westminster, but it is the outcome for consumers that ensures that the Government must act. The secrecy, the dominance by a few uncompetitive companies, and the disillusioned, untrusting customer base, which is largely disengaged, all lead to one certain outcome: a consistent failure of the market to offer fair prices. That should be no surprise to any of us. We have regional monopolies—secret and inefficient—low customer engagement and unresponsive pricing. That is why this debate is so important.

I said the UK energy market does not offer fair prices, so let me illustrate that central criticism. First, as my hon. Friend the Member for Hartlepool (Mr Wright) said, the big six energy giants account for 85% of the market, and they treat their long-standing loyal customers worst, as the hon. Member for Weston-super-Mare pointed out. Those customers, without exception, will pay for energy on the most expensive default tariff. The only customers treated worse are those forced to live in a home that has a prepayment meter, either because the landlord requires it or because they have a poor credit or payment history. In 20 years, this group has grown to account for 16% of all households. Even the CMA could not ignore the fact that this group pays a premium of around £80 a year, as well as paying in advance for its energy. I therefore welcome, as I said, the decision to provide some price protection by capping the amount an energy company can charge these customers, but that measure does nothing for the remaining majority of customers who are also being overcharged year after year.

What about the overcharging of the majority of mainstream consumers? Even the CMA could not fully explain this overcharging. Its best estimate was that between 2012 and 2015 the average amount overcharged was some £1.5 billion per year, reaching almost £2 billion per year by 2015. The CMA also found that the revenue from standard variable tariff customers was 11% higher for electricity and 15% higher for gas compared with the average revenue for other customers—and this before any of the current price hikes came into effect. The CMA concluded that in any one year the “detriment”, as it describes it—the amount that is overcharged—was made up of about £600 million a year in excess profits, and the remainder, about £850 million, was down to “inefficiencies”, whatever they may be. This points to bad management by some very highly paid individuals.

[John Penrose]

The right hon. Lady is making a very compelling case, as she did with me in the dragons’ den pitch for this debate. She is absolutely right about the CMA’s figures showing such horrendous levels of customer detriment. Not only that, but the gap between the standard variable price that is being charged and the wholesale price has been getting wider over the past four years, so the situation is bad and getting worse as time goes by.

[Caroline Flint]

Exactly. We have the historical evidence that month by month people are still paying far too much for their energy bills.

It is absolutely astonishing that this is happening in what is meant to be a competitive market. The overcharging and the excessive profit margin made from standard variable tariff customers clearly provides no encouragement to move those customers on to a better deal. I believe that this is a bankrupt business model. If we are all admitting—even the energy companies have had to face up to this—that people are paying over the odds, then the companies have a business model based on that. If all these customers were miraculously to move to a lower tariff tomorrow, where would the companies be left? The inertia is compounded by a management approach that does not seem to want any form of effective change.

Unfortunately, the more the Government have publicly urged consumers to switch to save, the more the companies are absolved of any responsibility to move customers on to a better deal. A sticky, passive, unengaged customer base appears to suit some of these firms down to the ground. When, back in 2012, EDF automatically moved vulnerable elderly customers on to its cheapest tariff, sadly other suppliers did not follow up with this better practice.

The CMA’s final report concluded that to eliminate overcharging, prices would have to fall across the board by an average of 3% per year between now and 2020. It hoped that its measures to promote switching would create more competition in the market and have a downward effect on prices, but it was reluctant to say exactly how successful it expected that to be. The problem that the CMA faces is that the UK has an energy market with unhappy consumers, a dysfunctional pricing mechanism, and companies that are, I am afraid, largely immune to competitive pressures.

Ofgem has reported that some 3.3 million households switched supplier from January to December 2016. This is apparently the highest level of switching for six years, but it equates to less than 12% of households. I worry that we have a two-tier energy market: an active, informed class of consumer who is energy-conscious, internet-savvy, shopping around and managing their accounts online, and a far bigger, less informed, less engaged, less internet-savvy, discontented majority.

[Mr Iain Wright]

My right hon. Friend is second to none in her knowledge of energy policy. She may be coming on to this, but I would be interested to get her thoughts on policy fixes. Does she think that the regulator has the powers but is not using them, or that the Government need to give the regulator more powers to help fix this broken market?

[Caroline Flint]

The regulator already has powers in its back pocket. It can intervene if it thinks that the market is uncompetitive. It can, if necessary, take customers off a company that is failing and allow them to get a better deal elsewhere from other suppliers. However, we do need Government to take responsibility. Whether we have the relative price cap that the hon. Member for Weston-super-Mare proposes or my suggestion of a protected tariff—if not permanent, then temporary—to fix this market, it is clear that more reform is needed. I wish that the regulator would use its powers; it has been very slow to do so, although it has speeded up in recent years. There is more it could do, but there is more that Government could provide it with to do a better job.

One of the CMA’s proposals is that data on customers should be shared so that other energy suppliers can send their offers to customers. The problem is that people will be bombarded with leaflets and emails from operators in a sector in which their trust is already so low that they may not put any more in this marketing mechanism. These are the very people—immune to direct mail, annoyed by calls from would-be energy suppliers, and mistrustful of the whole industry—who are not being helped by any of the measures put forward since the CMA report.

The CMA believes that by encouraging switching and a shared database for companies to market new tariffs to each other’s customers, price competition can be made to work. However, I am afraid that this shared database seems to be a new label for an old solution. We have had six years of trying to bring a consumer benefit by switching—six years of abject failure. I must therefore ask the Minister whether it is realistic to assume that 28 million households will be able to reduce their average bills by 3% a year, as the CMA suggests, for each year between 2017 and 2020. The CMA believes that if it succeeds in its aim, this steady price fall would eliminate the overcharging—the detriment—but even if it did, it would not repay one penny of the money already unfairly taken from consumers. I see no mechanism in the CMA’s prescription that can achieve even the objective it has set. Adding customers who have remained on a standard default tariff for three years to a huge marketing database for other companies to prey on will not, in itself, make this market more competitive.

In March, Ofgem published the information that January’s cheapest available tariff was 22% cheaper than the average customer’s bill, but did not identify how long that offer lasted or how many customers benefited. However, let us follow its logic. What if that tariff was widely available? What if the 12% of switchers—3.3 million consumers—all switched to this new best value tariff, and what if those 12% of customers all got a saving of 20% on their bills? This change alone might notionally cut average bills by 2%—almost the 3% the CMA hoped to achieve through its measures—but it would not reduce the detriment by one penny for the 88% who do not switch. The penalty incurred by the vast majority would remain.

Also among the CMA’s recommendations is that price comparison websites should no longer have to display every deal on the market, so consumers may only see the deals that give the website a commission. The majority of customers who remain resistant to the lures of the marketeers will still see no gain. Those customers—some 20 million who pay the default standard variable tariffs and endure their prices going up and down as the energy provider chooses—are left at the mercy of their supplier, which the CMA has already identified as consistently overcharging them. They certainly cannot rely on wholesale prices to save them, because there is no obligation to pass on falls in wholesale prices to consumers—not even in part. Ofgem reported that wholesale gas prices fell by 44% between 2012 and 2016, yet consumers saw their energy bills rise by 7% over the same period. Such a perverse result could happen only in a dysfunctional market. Where do consumers turn to get fairness? The only avenue for the majority of consumers is the Government, who are the one agency with the powers to change the game at a stroke. How long will the public have to wait before the Government finally act as a consumers’ champion?

In 2011, when I became shadow Energy and Climate Change Secretary, I advised the Government that energy bills were soaring, but they did nothing. In October 2011, the then Prime Minister convened an energy summit and proposed to write to millions of consumers about switching, but that did not work. In November 2013, Mr Cameron tried a different approach: “get rid of all the green crap,” a senior source reported him as saying.

As has been touched on in this debate, the big six always like to divert discussion of bills on to green levies, even though investment in renewable energy and low carbon energy is exerting a downward pressure on wholesale prices. It is ironic that domestic consumption of energy, in kilowatt hours, has gone down, but we are paying more in our bills. The former Prime Minister said, “get rid of the green crap”, and he did so. The Government shortly afterwards reduced some of the environmental obligations and network charges and cut bills by between £39 and £50. Unfortunately, that year energy bills rose by an average of £120, so that did not work.

Mr Cameron always ridiculed Labour’s energy price freeze, which was a proposal to cap energy prices for 20 months while the energy market was reformed. Instead, in 2014 he announced the CMA investigation. Its initial findings the following year and its final report in June 2016 entirely vindicated Labour’s concern about unfair energy prices. We now have it on the record from one of the Government’s regulators: Britain’s consumers were ripped off year after year for a period of four years—that we know of. About that there is no dispute. It is an £8 billion scandal, and every month the financial punishment for customers grows.

So what do we want? My plea to the Government is simple. Recognise the scale of the problem. Recognise that switching campaigns, which have now become a gimmick, can only scratch the surface. They will never get to the heart of the problem. Recognise that the industry needs reform, and that until it is reformed, the Government need to introduce price protection for consumers.

I believe that that protection should take the form of a protected tariff, and I first argued for such a tariff after the general election in 2015. Consumers need nothing less than some sort of regulated maximum charge that companies can levy, which is based on wholesale prices, network costs and an acceptable level of profit. I do not believe that that can be left to the companies. Any voluntary measure is welcome, but the approach has been too piecemeal. We need the Government to act by introducing a protected tariff, which is set by Ofgem. We know that Ofgem is capable of that calculation, because it has just done a similar exercise for 3.5 million prepayment meter customers.

Am I asking for something outlandish? No. Northern Ireland still has price regulation, and a majority of countries in the European Union still have price controls of one sort or another. In the matter of price controls, we are not thwarted by the European Union. We cannot blame either the EU or Brexit for the Government’s failure to address this injustice. The problem lands on the doorsteps of No. 10 and the Department for Business, Energy and Industrial Strategy. The Government have the power and the means to end the unfairness in our energy market, or at least to offer a temporary respite, as they have done for prepayment customers, until more substantial reforms can be enacted.

In November the Secretary of State said:

“Customers who are loyal to their energy supplier should be treated well, not taken for a ride. It’s high time the big companies recognised this. I have made clear that this cannot go on and they must treat customers properly or be made to do so.”

I say to the Minister: now is the time. This problem is not going away, and I urge the Government to listen to the voices of Members of all parties who believe that the current energy market does not serve the British people well. Action is long overdue.

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[Dr Whitehead]

Indeed. The hon. Gentleman makes an important point about the relationship of the customer to those transactions. However, with vertical integration, those transactions could cause money that should go to the customer to be siphoned off into different areas as a result of those opaque trades, and that is important to the customer in the long term. That is why we need full transparency in all those market trade arrangements.

[Caroline Flint]

My hon. Friend makes an important point about the vertically integrated nature of these companies. In this dark, dark world of electricity generation and supply, is it not the case that the big six generate energy, sell it to themselves and then sell it on to us? That not only impacts on the fairness of pricing but excludes others, including independent generators and retailers, from coming into the market to put downward pressure on prices.

[Dr Whitehead]

My right hon. Friend’s point is spot on. It demonstrates the need to understand a lot more about how those trades work, who is doing what to whom and, sometimes, who is doing what to themselves. This is a complicated picture, involving trading right up to closure and trading in times of scarcity. There has been a suggestion that traders can pull back on their generation in order to trade when the generation becomes more scarce in order to get more money. The lack of accountability in those companies and the opacity of the system mean that we are badly served in regard to knowing what money goes where and who is benefiting from it, and what is happening to the customer in the end.

We need to open up the market to full transparency but we need to go still further and introduce a pool system of trading, so that all trades into the pool and all trades out of it are conducted transparently and, most importantly, on a level playing field for all suppliers. This works in other European countries—Scandinavia has the Nord Pool, for example—so why can it not work here? That does not mean that companies cannot make money. As Ofgem says, if companies have a good purchasing and hedging strategy, they can make money. What they will not be able to do is pass benefits on to themselves that otherwise ought to go to the customer.

We need urgent action, which is perhaps a little ironic. My right hon. Friend the Member for Don Valley will recall that we have between us been through several Bills, now Acts, and reforms that have passed through the House under the heading of energy market reform. We have seen a great deal of reform, but we certainly have not seen reform of the energy market in all that time. It is time that we got serious about reform of how the energy market works, of its opacity, and of how it does not serve sticky customers properly, victimising and demonising the majority of them. We need urgent action on that. Otherwise, we will be condemned to the same old cycle of price rises, muttering, remedies being tossed around, commissions being engaged, remedies gathering dust on shelves, and then another round of price rises. I commend the motion, but it should herald the start of a serious look at how the whole market works and how the customer can finally be brought into its centre. It is a fine start, but we need to follow it through to the end.

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[Caroline Flint]

It is important that we have a candid, open and honest discussion. The Minister makes a good point about prices versus bills, because the amount of energy that we use has gone down significantly over the past 10 years. Is he as concerned as I am that the big six might be keeping their tariffs unwelcomely high because they are having to compensate for the fact that we are using less energy?

[Jesse Norman]

It is an interesting suggestion that the changes may have cushioned the effect of price rises in the way the right hon. Lady describes. I thank her for that thought, and I would certainly like to give it some reflection.

[Jesse Norman]

This is really a debate about retail energy prices. The problems are less marked in many areas of the business market, but it is undoubtedly true that business bills must be kept as low as possible to encourage productivity. As my hon. Friend knows, the Government have undertaken several steps precisely to achieve that.

Colleagues on both sides of the House have noted that, with suppliers buying their energy up to two years in advance, suppliers should be protected from recent fluctuations in the wholesale energy price. Some suppliers have chosen to act differently by freezing standard variable prices through winter and beyond, which alone shows that price rises are not inevitable. It is a fact that the majority of customers—around 66%—are on standard variable tariffs and continue to pay considerably more than customers on fixed-term deals.

The Competition and Markets Authority highlighted that such customers have been losing out by an estimated £1.4 billion a year—that figure is disputed—over the past few years. There have been persistently high differentials between the cheapest fixed deals and standard variable tariffs. The latest published Ofgem data show the differential to be some £200. There has been good focus today on fuel poverty, as there was the other night, and it is those who can least afford it who are most likely to lose out. Households with low incomes, people with low qualifications, those in the rented sector and those over 65 are more likely to lose out than others. The recent price rises serve only to underline the fact that the majority of consumers are paying more than they need to pay.

What can be done about it? The House widely recognises that, in many markets, effective competition drives down prices, promotes innovation and assists improvement in customer services. The Government have worked hard with Ofgem to try to improve competition. The right hon. Member for Don Valley (Caroline Flint) mentioned “Groundhog Day,” possibly inadvertently casting herself in the role of Andie MacDowell, which is certainly how I see her. It is not fair to say that we are in “Groundhog Day” because there has been some progress. Members rightly point to the fact that there are now more than 50 energy suppliers in the domestic market, up from 13 in 2010, and of course there are potential new entrants, including local authorities, waiting in the wings—we welcome them to the market. Independent suppliers now have more than 18% of the dual-fuel market, up from less than 1% seven years ago.

I was pleased to hear from the hon. Member for Bristol East (Kerry McCarthy), who mentioned Bristol Energy and the social conscience it brings to energy supply, which is typical of a tier of new and wider-ranging suppliers, including not-for-profit suppliers, that have entered the market—there are housing providers, too. Smaller suppliers are leading the way in using smart, pre-pay and other technologies to support customers in finding the best deal using their mobile phone.

We had a good discussion on switching, and it has been rightly noted that an increasing number of households are switching their energy supplier. There were some 7.8 million energy account switches last year, an increase of 28% on the previous year. Switching is putting increasing competitive pressure on the big six—although, as my hon. Friend the Member for Weston-super-Mare noted, there is a great deal of churn—but it is still only 15.8% of gas and electricity customers, so we are a long way from a position where anyone should feel that a large number of people are actively availing themselves of the opportunity to switch, as one might expect in a more competitive market.

For too long, too many customers have been left on poor-value deals. At the end of last year, the Government announced new measures to increase transparency for consumers. I welcome the point the hon. Member for Southampton, Test (Dr Whitehead) made about transparency, and he is right: several studies have found that the markets are less transparent here in many different ways than one might like. An effort was made to begin to crack that and increase transparency for consumers, including through the publication of an energy supplier league table by Ofgem, which was designed to shine a light on the most expensive standard variable tariffs.

We know that some consumers worry that switching supplier may be difficult and time-consuming. This is not just an economic matter; it is also a cultural matter. We must recognise that and not allow purely economic analysis to take over. We are also taking forward proposals to mandate Midata in the energy sector, which should also have an effect. Midata will allow consumers to get hold of their energy data electronically and use them to find the best deal. It will make the switching process quicker, easier and more accurate, and, with luck, it will allow people to switch using tablets and smartphone applications more easily. We are very keen that the benefits of this are not restricted, in any sense, to the tech savvy, but are available to anyone who owns a mobile phone at the very least. We will therefore work with industry, switching companies and consumer groups to ensure that all consumers can access and use their data to switch.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) rightly mentioned the time it takes to switch supplier. All I would say is that it used to take five weeks and the Government are working with Ofgem to get it down now to 21 days. Once we have done that, we will work to push it down to where it should be, which is at 24 hours. That will be a major improvement to our system.

There was some discussion about customer service, where some improvement has been made. The latest Ofgem data show that suppliers received more than 3 million fewer customer complaints in 2016 than in 2014, but as there were still 3.5 million complaints that is not saying much and they still have a long way to go. We are working with Ofgem and the ombudsman to identify and fix systemic issues, which damage customer service. As the House will know, an Ofgem review last year resulted in increased communication between Ofgem, the ombudsman and Citizens Advice, an organisation I greatly esteem, as I know many colleagues do. It is working on developing a rating system that will help customers to see at a glance how their energy suppliers are performing.

As Members noted, the CMA had some positive things to report after concluding its two-year energy market investigation. It found that wholesale energy markets and the retail market for larger businesses are working well, but for domestic energy suppliers the report is a wake-up call. It is important to note that the CMA’s report was not unequivocal in every sense, and it has been contested; I note a letter from some senior energy regulators who raised the question of whether it is true to see detriment in the way the CMA has. It is important to acknowledge that fact. However, the CMA’s position was clear: consumers should be able to trust energy companies and to know that they are getting a good deal. The CMA found that a lack of competition meant that about 70% of big six customers remained on their supplier’s most expensive tariff despite the savings they could make by moving to another tariff. We have encouraged, and Ofgem is introducing, a prepayment meter cap, which will protect 4 million households across Britain from the beginning of next month.

We are determined to go further and, as the House will know, we have a consumer Green Paper in prospect, which will examine specific sectors. We will respond sooner rather than later, and separately, to the CMA energy market report. Our Green Paper will examine markets that are not working fairly for consumers. In general, consumers in this country enjoy strong protections and an effective regime which help them get the best deal, but where those markets are not doing their job—where competition is not effective—the Government will look to intervene to improve competition and to strengthen outcomes.

The Green Paper will complement and sit within the Government’s industrial strategy to build on the work to deliver an economy that, as I have described, works for everyone. We announced some proposals in the Budget, including the ending of the cycle of subscription traps, the shortening and simplification of small print, and the introduction of new powers to impose fines on companies that mistreat customers. The Green Paper will provide more detail on those proposals.

Let me round up my speech with a couple of reflections on some of the helpful comments that were made in Members’ speeches. I was intrigued to notice that, according to the hon. Member for Brent Central (Dawn Butler), it is now Labour policy to renationalise the big six companies. I would welcome further clarification on that, together with an explanation of how much it would cost and how it would be funded. That was an interesting contribution.

I very much congratulate and thank my shadow, the hon. Member for Southampton, Test, for recognising the complexity of the problem we face. He is certainly right to focus on transparency. In recognition of that, I assure him and my hon. Friend the Member for Weston-super-Mare that the Government will reflect on such contributions. The Government’s record on intervening in electricity and energy markets is not absolutely unblemished. On several occasions, changes have been made, only for them to have to be unwound because it turned out that they were contrary to competitive pricing or innovation. That is worth recognising.

[Caroline Flint]

I listened positively to what the Minister said about the Government being prepared to intervene when a market is not working. I remind him that the Confederation of British Industry refers to the energy market as a managed market, because energy is an essential-to-life product; it really is set apart from the products that we discussed earlier, such as toothpaste, that we buy every day. I urge the Minister to stand up for what Governments should do, which is set the framework in which markets operate.

[Jesse Norman]

The right hon. Lady’s point is well taken. One does not need to have read far into “The Wealth of Nations” to know that markets are most effective not only when they are as deep as possible—when the benefits of specialisation and the division of labour, and therefore value generation, can be realised—but when they are supported by a strong state and a strong system of justice and enforcement. That is absolutely the tone of our approach to the market in this case.

I thank right hon. and hon. Members for a thoughtful and interesting debate that has covered a great deal of ground in a limited time. As the House will know, the Government are acting to make switching easier and quicker. We are rolling out smart meters and we are continuing to help the vulnerable and those in low-income households with their energy bills. The CMA did important work to highlight how much consumers are currently losing out, and we recognise that the recent price rises underline the fact that the majority of consumers are paying more, it appears, than they need to. We believe that current practice is not acceptable, and we will set out proposals to address the issues shortly.