Energy Prices

Christopher Pincher Excerpts

Wednesday 18th June 2014 Commons Chamber

[Christopher Pincher (Tamworth) (Con)]

It is a pleasure to follow the hon. Member for West Dunbartonshire (Gemma Doyle) and to speak in this important Opposition day debate. By my recollection, it is the fourth energy debate tabled by the Opposition. It is an important issue and we should reflect the concerns of our constituents. However, it is a pity that Labour has chosen to table the motion from the relative comfort of the Opposition Benches, given that it had 13 years, the money, and the majority to do something about the issue that it now seems so concerned about.

This is an important debate and it is a pity that the motion makes no mention of diversifying our energy supply, which is inextricably bound up in high energy prices because of our reliance on imported hydrocarbons. Labour has talked about this issue in the past, but it does not seem to be in its motion today. What it does have, luckily, is an interest in passing on prices quickly and in making sure that there is a properly competitive market. It is just unfortunate, again, that the market the party bequeathed to us is not competitive.

The right hon. Member for Oldham West and Royton (Mr Meacher) said in a speech in the last energy debate that the big six are Labour’s oligopoly. He is absolutely right—it is Labour’s oligopoly, and it is this Government who are sorting out the competition issue by bringing in new players who want to be a part of our energy supply industry: nine new players in just the last two years. That will help us to drive down our energy costs, not drive them up.

I also note that the Opposition said that their price freeze will not affect investment. I do not think that that is true. Tony Cocker, the chief executive of E.ON, says that every time the right hon. Member for Doncaster North (Edward Miliband) opens his mouth, he drives up the cost of capital for firms such as his. That is the cost that they bear when they try to invest in our energy infrastructure.

We know that we need to spend about £110 billion in the next 10 years on our pipes, pylons and power stations to keep the lights switched on and the water warm. However, Labour’s proposals will damage that investment flow. E.ON itself, during the past five years, has invested about £7 billion in infrastructure. If we extrapolate that over the big six, over 10 years they will be investing about £75 billion in our infrastructure. That leaves a £35 billion gap between what we need invested and what is being spent. We need that extra investment to come from private enterprise, because if it does not, the poor old taxpayer—the GP, the factory worker or the van driver, who pay their taxes—will have to pick up the bill. Alternatively, it will have to be put on the bills of consumers, which means that bills will go up, thanks to Labour’s policy, which will cause investment to dry up.

The Opposition proposals are superficially attractive, but they will cost consumers and taxpayers more. I do not believe that if our voters and constituents think about it, they will be prepared to accept those costs. The way to deal with the challenge is not to freeze prices, but to reduce them. We could reduce prices quickly by rolling back some of the green levies that have been imposed in recent years. That would save consumers £50. Making it easier to switch and moving towards 24-hour switching could save consumers £200. Reducing the vast array of tariffs to just four and putting people on the tariff right for them could save them about £158. Those are ways in which we could help our constituents deal with the challenge—a long-term challenge that has been running for 40 or 50 years—of increasing oil and gas prices, rather than the con that the Opposition know they are proposing.