Energy Prices and Profits
Debate between Caroline Flint and John Robertson(11 years, 2 months ago)
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Caroline Flint
Although some of the companies have reformed how they treat their customers, I am afraid that I receive information every day from members of the public including my own constituents—and also colleagues in this House who tell me about their experiences and those of their constituents—about what can only be described as sharp practices. Why should a customer who is paying a fair rate for their energy have to pay an uprated rate just to allow that money to sit in the coffers of the energy companies so they can benefit from any interest on it? That is just not fair and there is still a huge job of work to be done.
John Robertson (Glasgow North West) (Lab)
Some 56% of people are saying they have cut back on their use of electricity and gas yet their bills are going up. They ask, “What is the point of the green deal, when it does not matter how much I save because prices are going up anyway?” No wonder nobody wants to know about the Government’s green deal.
Caroline Flint
My hon. Friend is right, and that lack of confidence and trust in the market and how it operates is at the heart of our motion.
I want to tackle this issue head-on by turning to the question of the retail energy market. It is nearly a year ago now that the Prime Minister promised to force the energy companies, by law, to put all their customers on the cheapest tariff. Let me remind the House of exactly what the Prime Minister said on 17 October last year:
“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.]
He reaffirmed his proposal at Prime Minister’s questions earlier today, but the details show that it will not in fact apply to all customers; it will apply only to people on closed or dead tariffs, which is a tiny fraction of consumers as a whole.
Given the crucial difference between what the Prime Minister promised and what the proposals entail, it is reasonable to ask exactly how many people will benefit. Since then, I have asked one urgent question, six oral questions in the House and six written parliamentary questions to get to the bottom of this, but every time the Government have refused to answer.
This is meant to be their core offer to consumers, yet the Government cannot even tell me how many people will be moved to a better deal, when that will happen or how much they will expect to save. So I ask the Secretary of State again today: how many people will the energy companies be forced to move to the cheapest deal? Why is his Department so far refusing to answer my freedom of information request on this issue? Why has so much time and so many resources been wasted trying to shore up a policy announcement made off the cuff?
The sad thing is that there is agreement across the House and, to its credit, within industry that the proliferation of tariffs in the past few years has hindered, rather than helped, consumer choice and competition. Instead of focusing on that, the Department has wasted a year trying to dig the Prime Minister out of a policy hole entirely of his own making, creating unnecessary confusion for the public.
Energy Market Reform
Debate between Caroline Flint and John Robertson(12 years, 1 month ago)
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Caroline Flint
Of course, my right hon. Friend the Leader of the Opposition did make some changes to Ofgem, but we have given more consideration to this over the past two years and, as I will explain later, we now feel that we need to take a more radical look at it.
On Tuesday last week, in response to a question from my noble Friend Lord Kennedy, Baroness Verma, a Minister in the Department for Energy and Climate Change, told the other place:
“What we cannot do, of course, is tell big energy companies what prices they should set.”—[Official Report, House of Lords, 16 October 2012; Vol. 739, c. 1368.]
On Wednesday, though, the Prime Minister directly contradicted her when he said:
“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.]
By Wednesday evening, a spokesman for the Department had told the Financial Times that energy companies would not in fact be forced automatically to put all customers on cheaper tariffs. By Thursday morning, the Minister of State, the hon. Member for South Holland and The Deepings (Mr Hayes), was reduced to taking the ridiculous line that the Government did still want to use legislation to get people lower tariffs but could not explain how they were going to do it.
All the while, the Secretary of State, the man responsible for this country’s energy policy, had gone AWOL, leaving an empty chair on “Newsnight”, refusing to answer questions from the media, and sending his deputy to answer my urgent question. The Minister put in a valiant performance of which he should be proud; those of us who were there could say that it was parliamentary comedy gold. However, what did we actually learn from last week’s urgent question? We learned, in the words of the Minister, that
“DECC has a wonderful relationship with…the Treasury and No. 10”
which
“has improved since my arrival.”—[Official Report, 18 October 2012; Vol. 551, c. 493.]
Despite that wonderful relationship, we also learned that the Department of Energy and Climate Change is not told about announcements on energy policy until after they are made. We learned that one of the options being considered is a change to the law to require the energy companies to write to people to tell them what the cheapest deal is, even though the Government already announced that back in April and the Energy Act 2011 already gives the Secretary of State the power to force energy companies to provide information about the lowest tariff.
John Robertson (Glasgow North West) (Lab)
What kind of relationship does my right hon. Friend think that DECC has with the Treasury? When the Treasury was asked to give evidence to the Energy and Climate Change Committee, it refused to do so. Not only did it not give evidence; it did not inform DECC of the information required.
Caroline Flint
It was a very bad decision by the Treasury to refuse to attend the Committee. We know how important energy policy is for DECC, but it is also a cross-cutting issue for Government. Decisions and influence from the Treasury, and also the Department for Business, Innovation and Skills, for that matter, are essential to the perception of how our energy policy is being developed. That decision was a great shame, but I am afraid that it is just another example of a lack of joined-up government, which is to the detriment of such an important policy area.
We also learned that the Government have been working on the proposals for months and that we should expect them to feature prominently in the forthcoming Energy Bill, but there is no mention of them at all in the draft Bill, the White Paper, the technical updates or the impact assessments. Perhaps the only real thing that we learned last week was that when it comes to energy bills this Government are not just out of touch, but completely clueless.
Energy Prices
Debate between Caroline Flint and John Robertson(13 years, 1 month ago)
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Caroline Flint
We are clearly on record as saying that we need to reform this distorted market. We need openness and transparency, and we need simpler tariffs. It is not enough just to tell people to navigate themselves around the increasing number of available tariffs that are no good. This is also about breaking up the big six and opening up the energy market to new suppliers. We are clear about that, and today we are forcing the Government to tell the House whether they, too, are clear about it.
John Robertson (Glasgow North West) (Lab)
Has my right hon. Friend had a chance to look at John Hills’s report on fuel poverty? He talks about the thousands of people who will die from hypothermia this winter. Does not that make any arguments about who is at fault completely superfluous? The fact is that we have to prevent those people from dying. What are the Government going to do about this? Are they going to put profit before people’s lives?
Caroline Flint
I was pleased to be able to have a meeting with John Hills this morning to discuss his report. I would not want to make a direct comparison in this regard, but it is telling that more people die of cold in the winter than die on our roads. This is about recognising that, while certain actions will take time, we need to determine what can be done here and now. The sad thing is that Ministers are lecturing families and firms about insulating and saving, even though they have cut Warm Front by 70% and will not give anyone any information about their green deal for homes, which will not be ready for another year anyway. Labour invested more than £300 million in Warm Front during our last year in office, helping families to keep warm and save energy. We helped home owners on modest incomes to modernise their heating systems, but today that scheme has a budget of just £110 million, and it is due to end in April 2013. The Government could take action right now: they could also stand up to the energy companies and tell them to help people to help themselves. In doing that, they could perhaps save some lives.
Caroline Flint
What will be the cost if we rely on fossil fuels for ever more? What difficulties would that create, in terms not only of fuel costs but of security of supply? I refer the hon. Gentleman to a report that I believe came from both Ofgem and the Department of Energy and Climate Change last year, which outlined that something less than 5% of the price of bills was connected to investment in renewables. Of course we have to look for a balance, but I am focusing on something that we should all be concerned about. Even the Government have admitted that people are paying too high a price for their bills because these tariffs are sold in a misleading way so that people do not get a decent deal. On top of that, we have only the six big energy giants in the market, which needs to be broken up and radically reformed. That is something we should focus our attention on, along with help to people and businesses to make their homes and businesses more energy-efficient so they can pull down the costs of energy over time. There is no going back, however, to an old system of energy supply; that will not help anyone.
John Robertson
What does my right hon. Friend say to people in the poorer parts of my constituency where energy efficiency will not work? People can do nothing with the housing they have got, but they have to live somewhere. The thing that makes the biggest impression on them is the price. If they are going to get screwed by the price from the energy companies, they are going to have to work out how they are to live. What do we do with people like that? We can talk all we like about efficiency, but it does nothing for these poor people.
Caroline Flint
We stand up for them. We stand up for them when they are not getting the best deal they can for their energy. We also stand up for them by ensuring that low-income homes are supported through Government schemes, whether that is Warm Front or the winter fuel allowance for older people, but those are being cut by the Government. That is what we do and what we look at. In the long term, we look at how we live our lives and where we live and, with Government leadership and support, we help business to do the right thing to help people not to be behind the curve on energy efficiency and lowering bills. We also look at what happens now, which is why our motion demands that energy companies use some of their profits to help people, particularly the most vulnerable in our communities.
The Government do not understand the reality for families who struggle to pay the bills at the end of the month or the reality for vulnerable people who must make choices about whether to heat their home or have a hot meal. The same applies to families who believe in greening their homes, do their recycling, have low-energy light bulbs and have insulated their homes, yet still find that under the complex, distorted tariffs they pay more for every unit of energy they use—not to mention the businesses trying to keep their head above water because of an austerity programme that is not working for Britain.