Energy Prices

David Wright Excerpts

Wednesday 18th June 2014 Commons Chamber

[Caroline Flint (Don Valley) (Lab)]

May I be one of the first to add my congratulations to the hon. Member for Totnes (Dr Wollaston) on winning her election today to become Chair of the Health Committee?

I beg to move,

That this House notes the policy of Her Majesty’s Official Opposition to freeze energy prices for 20 months while the energy market is reformed; further notes that in recent months wholesale gas and electricity prices have fallen significantly, with gas prices for next day delivery 38% lower than their level this time last year and electricity prices 23% lower; believes that in a properly competitive market wholesale cost reductions should be passed on as quickly and as fully as cost increases; and calls on the Government to provide the energy regulator for Great Britain with powers to force energy suppliers to pass on price cuts to consumers in all parts of Great Britain when wholesale costs fall, if suppliers fail to act.

Last week we learned that wholesale energy prices have fallen significantly since the start of the year, and yet there has been no reduction in consumers’ energy bills. Indeed, bills are more than £60 higher this year than they were last year. So today we put before the House a very simple motion. It notes this sustained and substantial fall in wholesale prices in recent months, and it calls for decisive action from Government.

Other proposals could have been included, to which the Opposition remain committed, including a price freeze for 20 months while the energy market is reformed, which the motion notes and the Opposition reaffirm, which, just to be clear, would stop energy companies increasing their prices, but would not stop them cutting them; put a ring fence between the generation and retail arms of vertically integrated energy companies; create a pool for all electricity to be traded in; and provide greater transparency for trades in the gas market. But we have debated and voted on those many times before in the House without agreement. So in the interests of securing consensus today, the motion proposes only one measure, on which we hope it will be possible to find agreement: new powers for the regulator to be able to force suppliers to cut their prices when wholesale costs fall if they do not do it first.

We believe that we need to establish a new regulator with a clearer mandate to protect consumers, because in this respect alone, we believe Ofgem has failed. But again, given there is not consensus on this point, the motion simply proposes that the regulator—whether the current regulator, or a new one, as we have proposed—be invested with tough new powers to ensure that consumers see the benefit of falling wholesale energy prices. This is a motion that the whole House should be able to support, and I want to set out why.

[David Wright (Telford) (Lab)]

Is not this just the kind of issue on which politicians can reconnect with the public? One fact that emerged from the recent elections is that people feel that politicians are powerless. When energy companies flout public opinion, they feel that we have very little to say from this House. Should we not be supporting the motion because it is a real opportunity for politicians to reconnect with the public? The public are not stupid. They see prices rise—