Fairness and Inequality

Debate between Gregg McClymont and Mike Weir

Tuesday 11th February 2014 Commons Chamber

[Mr Weir]

I am getting a bit tired of hearing that from the Labour party. I have explained our position on the energy price freeze time and again. The freeze will not work. There has already been a massive increase in bills prior to its coming in, and there is likely to be another after it comes in. We had a debate in the Chamber last week about inequalities in the system of billing by energy companies. Those inequalities will be frozen in place by an energy freeze, making things even worse for Scottish consumers. A freeze will also hit the investment needed to ensure that we have jobs for the future and can bring down energy prices through moving to renewables.

[Gregg McClymont]

Will the hon. Gentleman give way?

[Mr Weir]

No, I have given way enough for the moment.

The present UK Government have repeatedly said that they took powers in the latest energy legislation to implement the Prime Minister’s promise to put everyone on the lowest tariff. I have pointed out before, and I will do so again, that the measures in the Energy Act 2013 will not have that effect. The relevant sections do not require energy companies to do that, but only to make an offer, which may well be lost in the mass of paper that people receive from them.

Even if those changes work, they will do nothing to help some of the poorest in our society—those who have to rely on prepayment meters. It may be fine for someone on a direct debit tariff, but those on prepayment meters will be stuck on a higher tariff. Such tariffs are generally higher than those available to someone paying by direct debit, as would happen under Labour’s price freeze. That locks in price inequality. It seems to me that if the Government are truly intent on ensuring that everyone has the lowest possible bill, they need to ensure that that does not apply only within the type of contract people already have, but allows them to move to a cheaper type of contract.

I have already mentioned the particular problems with prepayment meters. As I have always said, they seem to me to be slightly perverse: it is one of the few examples of consumers ending up paying much more by paying cash in advance. It was interesting to see the hon. Member for Harlow (Robert Halfon) introduce his ten-minute rule Bill earlier this afternoon. I very much hope that it is successful, but given how many Bills are to be debated on 28 February, I somehow doubt it.

Citizens Advice Scotland recently issued a report on energy that shows the true difficulties people face. It states that

“the cases highlighted by bureaux regarding difficulty paying are most commonly with regards to prepayment meters recouping an unaffordable amount for arrears every time the consumer tops up.”

Citizens Advice Scotland quotes an example that sticks in my mind of a single parent with two children who has to lose £7 towards arrears every time she puts £10 in the meter; the £3 remaining is entirely insufficient to heat her home. That is totally unacceptable and is a clear example of the inequalities facing many of our fellow citizens. In those circumstances, she has no chance of getting out of the cycle of debt—the hon. Member for Bedford (Richard Fuller) made that point—or even keeping her home warm.

Many of our people are being forced into household debt by the difficulties they find themselves in. The rise of the payday lenders is one of the horrible side effects. We heard last week about the difficulty for those who cannot pay for their energy by direct debit and who have to pay higher prices. It was pointed out that some £2 billion sits with the energy companies, making money for them rather than for consumers—another inequality that afflicts our society.

[Gregg McClymont]

The hon. Gentleman is being most generous. He is talking about the profits made by energy companies. Is he aware that anyone in Scotland listening to this debate will be surprised that he and his party do not support a price freeze, but instead are in the same position as the energy fat cats?

[Mr Weir]

The hon. Gentleman is like a broken record. I have explained already, and have done so on numerous occasions, our objections to the energy price freeze. It is easy for Labour to say, “Let’s have an energy price freeze.” It sounds great and I am sure many people love to hear it; unfortunately, it simply will not happen. It will not lead to lower bills, it will freeze in the inequalities already in the system, and it will leave people with higher bills, while his party leader flails about trying to find some flesh to put on the bones of that policy.