Energy Prices and Profits

John Penrose Excerpts

Wednesday 4th September 2013 Commons Chamber

[Caroline Flint]

I think that the difficult thing here is for the country to understand why the Secretary of State has set his face against opening up the market and making it more transparent. This is not about companies not making a profit; it is about creating more competition. Every time we discuss the price of energy, we will have various voices, including the Government’s, defending how the companies operate. I want to create a more open and transparent market, so that we can all judge what is a fair price and, alongside that, what are fair profits. It is not fair if people cannot get to the bottom of how energy is bought and sold. It cannot be right for the market to be rigged in such a way that the vast majority of energy is sold within a company and then sold on to us. Other countries do it differently, and I think that we can, too.

[John Penrose (Weston-super-Mare) (Con)]

Does the shadow Secretary of State not accept that even if her proposals were to introduce extra transparency and potentially yield some of the benefits that she is claiming, those benefits would be unlikely to be passed on to consumers unless we also reform switching and the information available to consumers, so that more are willing to vote with their feet by moving their business elsewhere? It is not just the over-75s who are less likely to switch; the entire market is insufficiently informed or able to switch conveniently to have that kind of consumer pressure on producers.

[Caroline Flint]

I agree with the hon. Gentleman. We could look at lots of different policies to improve customer choice and the ability to move more flexibly between suppliers. My point is that, whatever we do to the retail side of the consumer offer, we must deal with how the market works. Even the best tariff that we have at the moment might still not be a good one, because of how the wholesale market works. When I met companies that are part of Nord Pool, they did not voice the concerns that the Secretary of State mentioned today about hampering investment. Actually, I am pleased to share with the House the fact that over the past 18 months I have seen some movement in a number of the energy companies in the UK as well. I think that they are beginning to realise that some openness and transparency in the market would serve them and the British public well.