Energy Price Freeze

Debate between Caroline Flint and Eric Ollerenshaw

Wednesday 2nd April 2014 Commons Chamber

[Caroline Flint]

My hon. Friend is right. It is a temporary price freeze while we reform the market and restore faith and trust. That is absolutely necessary for the journey we are asking the British public to continue with us in relation to energy.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

Will the right hon. Lady give way?

[Caroline Flint]

I will give way shortly but I want to make a little progress.

The Secretary of State lauds the days when there were 15 energy suppliers, as if it were some nirvana of competition where consumers had choice, customer service was great, and bills were low. He does not mention that the reason there were 15 suppliers was that there were 14 regional electricity suppliers, each with a complete monopoly in their own area, and only one gas supplier, which had a monopoly across the entire country. Consumers had no choice at all; nobody could switch, and that was that. Who gave ordinary consumers the power to choose who supplied their electricity, and who tried to open up the energy market to full retail competition? It was the previous Labour Government.

--- Later in debate ---

[Caroline Flint]

I will finish this point. Good Energy: 2003; First Utility: 2008; OVO: 2009. In total, there were not just six suppliers in 2010, as the Secretary of State likes to say, there were 14, and in recent years the growth of those companies has begun to erode the market share of the big six.

Yes, there are more suppliers out there challenging the incumbents, and the market share of the big six is down from a huge 99% to a still pretty massive 95%, but that is no thanks to the Secretary of State. If he does not even understand the problems with our energy market, why should anybody trust him to fix it? Let us not forget that the only reason we are having this debate, and the only reason the energy market has been referred to the Competition and Markets Authority, is the way in which Labour, along with others, has stood up for customers and refused to be silenced.

[Eric Ollerenshaw]

Clearly, the right hon. Lady has thought carefully about the implications of a price freeze. What discussions has she had with trade unions and the energy industry about the possibility, should there be a price freeze, of a demand for a wages and salary freeze in the energy industry?

[Caroline Flint]

The energy companies have clearly been making profits that have not been reflected in efficiencies in their organisations or a fair trade off between what they should spend on getting bills down and investment. I believe in this sector and that its potential growth is enormous. The truth, however, is that staff in those organisations are not served well by a management that refuses to faces up to its responsibilities to provide good customer service and efficient services in which everyone can gain. The only people gaining at the moment are the big six chief executives and their management boards, and those who benefit from the profits they have made—unfair profits that have not been passed on and shared with consumers and investment.