Energy Prices

Debate between Caroline Flint and Susan Elan Jones

Wednesday 14th January 2015 Commons Chamber

[Caroline Flint]

I shall be happy to do so later in my speech.

[Susan Elan Jones (Clwyd South) (Lab)]

Does my hon. Friend agree that one of the Government’s total betrayals has been their failure even to consider requiring Ofgem to regulate oil prices in the first place? When they speak of rural communities they talk about bringing back fox hunting, but what most people in rural communities want are lower energy costs and lower oil prices.

[Caroline Flint]

I think that in a number of policy areas, the Government are—to put it in a not very academic way—all over the shop. When it comes to energy, they contradict themselves daily, and I can provide the House with evidence of that.

Our motion raises four questions. First, have wholesale costs fallen, and are they continuing to fall? The answer to both parts of that question is clearly yes. Ofgem—the independent regulator with access to market data—confirms that that is the case. Its most recent estimate suggests that contract prices for the delivery of gas and electricity this winter are, respectively, 17% and 7% lower than they were this time last year. The Government’s own figures also show a fall. In a written parliamentary answer that I was given on 26 November 2014, the Minister for Business and Enterprise revealed that wholesale gas prices had fallen by 20% between November 2013 and November last year, and that wholesale electricity prices had fallen by 9%. Those figures relate to the day-ahead market. Platts, one of the price reporting agencies, thinks that the fall has been even more substantial: its estimates suggest that gas prices fell by 26% last year. On the forward market, in which energy companies are buying and selling energy ahead of time, the fall has been bigger still, with gas prices falling by as much as 30%.

There can be no doubt that the wholesale prices of both gas and electricity have fallen—not just a little, but quite a lot, and not just in the past few days or weeks, but for a sustained period of more than a year.