Retail Energy

John Penrose Excerpts

Thursday 12th October 2017 Commons Chamber

[Greg Clark]

If one thing would be disastrous for consumers, taxpayers and business confidence in this country, it would be the hon. Lady and her Front-Bench colleagues’ proposal for nationalised energy companies. It is not even clear how it would be paid for, but there are only three ways: taxing more, borrowing more, or expropriating assets. If that is about achieving the confidence of British business, she has a long way to go.

The hon. Lady asked about the action being taken and the required pace. I remind her that in 13 years of Labour Government not a single protection was put in place for consumers. It was the Conservative-led Government who commissioned the Competition and Markets Authority report—something that the right hon. Member for Doncaster North (Edward Miliband), when he had the opportunity, signally failed to do—as a result of which 4 million consumers will benefit this winter from a cap on prepayment meter tariffs, which again is something the previous Labour Government failed to do in their 13 years in office.

Since taking on this role, I have been absolutely clear, on the basis of the CMA’s assessment, that we require nothing less than the eradication of that detriment of £1.4 billion, which is why, in response to my requirements, Ofgem has announced that a further 1 million will be protected this winter, with a further 2 million to follow. I have been clear, however, that that is not comprehensive enough, and it is because I am not satisfied that we are introducing the Bill. We published it and submitted it to the Business, Energy and Industrial Strategy Committee, which I hope will give it urgent pre-legislative scrutiny so that we can reflect what I think is a broad consensus in the House that the objectives should be an energy market that works for all and, before that, protection for the consumers currently suffering the detriment identified. I hope that there will be a consensus around that so that we can proceed with the Bill.

As I said in my statement, however, it is open now to energy companies to move people off the standard variable tariffs identified as overcharging customers. Indeed, Ofgem has made it clear that it expects them to do so. They should do so now and not wait for the Bill.

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

I congratulate my right hon. Friend on embracing the huge cross-party consensus on protecting 17 million households from rip-off energy bills. This is a good day. It is great that we can now move on to discuss how, rather than if, we make it happen. In the spirit of consensus, will he listen to the widespread concerns that an absolute cap would throttle competition, be out of date as soon as the wholesale price of gas changed and mean energy companies spending more time lunching their regulator than delighting their customers, whereas a relative cap would preserve competition, make the customer king and provide far wider consumer choice?

[Greg Clark]

I pay tribute to my hon. Friend’s personal energy in this matter. He has been assiduous and tenacious in pursuing consumers’ welfare. The reason for publishing the Bill for pre-legislative scrutiny was to build the consensus that I know he will participate in. Our proposal is for an absolute cap—to ensure a clear limit on what can be charged—but I know he has thoughtful views that he will want to convey during the scrutiny process.