Energy Company Licence Revocation

Henry Smith Excerpts

Wednesday 3rd September 2014 Commons Chamber

[Caroline Flint]

I really think the Secretary of State is clutching at straws here. We believe very strongly—this is why we set out a Green Paper for energy market reform—that we have identified and tapped into some answers as to how to reform this market. I have to caution the Secretary of State. He may be surprised, if he asks his advisers, and perhaps speaks to some of the energy companies, how in a number of areas they welcome some of our reforms. So he needs to be a little more cautious about putting down Labour’s proposals. A number of them command respect across this House—even though it might not be said publicly—and, actually, in the energy sector as well.

[Henry Smith (Crawley) (Con)]

Would the right hon. Lady not concede, however, that part of the problem with competition in the energy market was the creation of the big six energy suppliers, which of course took place under the last Labour Government?

[Caroline Flint]

The hon. Gentleman should also be aware that it was John Major as Prime Minister who took through the changes that enabled those who generate and those who supply to merge their businesses. The result was we saw a number of companies—14, I think—decide they wanted to generate and supply and the big six arose out of that. However, whatever has happened under Labour or previously under the Conservatives in terms of privatising this market, I hope we can all agree that the ambitions for how that market would work after it was privatised have not been realised in the way some of the architects of privatisation perhaps thought they would. As I have said, we cannot let the past paralyse us from changing what needs to change. That is why we have put forward a number of very practical recommendations, which, sadly, have been voted down by the coalition Government time and again.

As to today’s motion, we propose one measure on which I personally find it hard to believe we cannot agree: a new power for the regulator to revoke energy companies’ licences where there are repeated instances of the most serious and deliberate breaches of their licence conditions which harm the interests of consumers. As the motion notes, consumers rightly expect to be treated fairly and to be confident that energy companies will meet their obligations and provide good services. Where companies breach those obligations, decisive action should be taken to put things right and prevent further breaches. So where the regulator has taken action, we have supported it, and where the Government have introduced sensible new measures, such as criminal sanctions for market manipulation and consumer redress orders, we have supported them. Indeed, in the case of consumer redress orders, we urged the Government to go further, because at the moment if any malpractice that happened before 2013 comes to light, the regulator will have no legal power to impose a consumer redress order.