Energy Prices

Debate between John Penrose and Alex Salmond

Thursday 16th March 2017 Commons Chamber

[John Penrose]

That is one of the underlying concerns about the way that this industry operates. People are not necessarily asked at the moment they are switched to the default tariff, so when they notice that they have been—if they notice—they feel that they are being ripped off, because those default tariffs are so much higher. That leads to distrust of the suppliers, and that is one of the things corroding the underlying trust in the industry as a whole. It is incredibly dangerous. I think some forward-thinking people in the industry understand that and the brand damage that is being done, not just to individual firms but to the sector as a whole. Trust is slow to gain and easy to lose. My hon. Friend has a background in marketing and consumer business, so I am sure that he understands what I mean.

Rolling out the end-to-end services that I mentioned, which are still in their infancy, should persuade a new group of customers who currently do not switch at all to do so, extending the number of people in that stubborn two thirds of the customer base who do not switch, or do so very rarely.

These changes, taken together, are essential steps to solving the underlying fundamental problems that make the energy market such a rip-off. If the Government, the regulator—Ofgem—and perhaps even enlightened energy firms themselves are willing to take those steps, abuses and consumer detriment will start to fall and customers will finally be in the driving seat, as we already are and expect to be for everything else, from toothpaste and coffee to cornflakes and soap.

But how long will this take to fix? How quickly will the rip-off stop? Even then, will there still be stubborn pockets of problems left over here and there? Given that fully two thirds of all customers are on these rip-off tariffs and that proportion has been glacially slow to change, there is an awfully long way still to go. Even under the most optimistic scenarios, an unacceptably large number of households will still be being ripped off for too many years yet. So we need a stopgap—a temporary solution—while all those other changes to make switching easier and less scary start to take effect.

The answer is a relative price cap—a maximum mark-up between each energy firm’s best deal and its default tariff. If someone forgot to switch to a new deal when their existing one came to an end, they would not be ripped off too badly, but people would still be able to save plenty of money when they got round to switching again, so it would always still be worth their while to become engaged and take that additional action, should they be so minded.

Under these proposals, energy firms would still be able to compete on price—they could still decide whether they wanted to be the Aldi or Lidl of the industry, or the Waitrose or Marks and Spencer—and could still have as many tariffs as they wanted, so there would be plenty of customer choice. If someone wanted a green energy tariff, that would be fine. If someone did not like computers or wanted to do it the old-fashioned way with offline paper and an ink deal, that would be no problem.

I am delighted to confirm today that the idea of a relative cap is supported by three of the largest challenger brands—OVO, Utility Warehouse and Octopus Energy, which cover hundreds of thousands of customers between them—and I hope to persuade others to join the cause in due course.

Crucially, a relative cap is a lot better than a normal price cap. A relative cap would mean that each energy firm could still adjust its prices whenever the wholesale price of gas or electricity went up or down, but a normal cap would mean that Ofgem had to approve any changes, which inevitably would be slower and create work for lawyers and lobbyists. A relative cap would also mean that energy firms still had plenty of incentives to innovate and find new ways to please particular groups of customers however they wanted, without needing Ofgem’s approval first.

Lobbyists and lawyers will hate a relative cap, because there will be much less lobbying and lawyering to do. Putting customers in the driver’s seat would mean fewer fat fees and fat lunches. If customers could switch their supplier as easily as changing their brand of cornflakes or soap, we politicians, and the bureaucrats and regulators, would rightly matter a lot less in this area. Because of the extra clarity and simplicity, a relative cap would mean that we could deregulate, too, by striking out reams of regulations, red tape and guidelines that complicate the market and stop energy firms thinking about their customers first and foremost and make them focus on their regulators, lawyers and compliance directors instead. A relative cap would reduce red tape rather than add to it.

But the people who would hate a relative cap the most are the big six, because it would force them to treat us, their consumers, fairly, to reward loyalty rather than exploit it and to fight hard to keep long-standing customers rather than take us for granted. In other words, it would force the industry to be a normal industry with normal firms where the customer, not the regulator or politicians, is king.

I know that both Ministers and regulators understand this problem. They have spoken to me and many others in this House about it, and both the Secretary of State for Business, Energy and Industrial Strategy and the Prime Minister have been trenchant in criticising the sector for not delivering an economy that works for everyone, so I hope that they will accept the thrust of this motion.

The time for action has come. We simply cannot argue, as others have tried to, that even though fully two thirds of the country is being ripped off, we are not going to help or protect those victims because it is their own silly fault if they are not savvy enough to switch. Yes, we need to make switching easier and safer so that, eventually, most of us do it most of the time. That is clearly the right long-term answer. But I hope that Ministers accept that, until that glorious day, we cannot simply sit back and allow consumers to be harmed on this scale for this long and do nothing. We need to do more.

[Alex Salmond (Gordon) (SNP)]

On a point of order, Madam Deputy Speaker. This is further to a point of order I raised a couple of hours ago with Mr Speaker about a prime ministerial statement on the Scottish constitution that he pointed out was hypothetical at that time. He said that if such a statement were made, he would entertain a statement from the Dispatch Box by the Prime Minister. That statement has now been made by the Prime Minister, and it has been interpreted as an attempt to bounce the Scottish Parliament’s vote next Tuesday on a Scottish referendum. She seems to be dictating the timing of any such referendum. These points were put to her at Prime Minister’s Question Time yesterday, and she had a full and fair opportunity to give her answer and to be questioned.

Madam Deputy Speaker, you will understand that parliamentary accountability means that if somebody such as the Prime Minister makes a statement about a change of policy, Members of Parliament are prepared to ask questions about it—questions such as, “What happens if the Scottish Parliament is not bounced and votes for a referendum next week? Why does the Prime Minister believe that the timing is not right when this House is going to be asked in 18 months’ time to take or leave a deal with Europe?” Fundamentally, there is arrogance in saying to people in Scotland that they shall not have the right to an act of self-determination or saying to this Parliament that we do not have the right to examination.

Madam Deputy Speaker, have you had a request from the Prime Minister to come to the Dispatch Box and go for parliamentary accountability, or does she feel that Scotland is some sort of county as opposed to the country that it actually is?

EU Referendum: Timing

Debate between John Penrose and Alex Salmond

Tuesday 9th February 2016 Commons Chamber

[The Parliamentary Secretary, Cabinet Office (John Penrose)]

I am delighted to respond to this important debate, and I commend the long-standing support of the Democratic Unionist party for the principle of holding a referendum on the European Union. As was pointed out by the right hon. Member for Belfast North (Mr Dodds), its members were there earlier than many, and I think that their consistency and constancy in respect of that principle can serve as a model for others.

Before we get too far into the debate, let me say that I think it is important for us all to remember that any debate about the referendum date needs to be undertaken in the conditional mood. In other words—if I may make a statement of the blindingly obvious—the date has not yet been set. As the Prime Minister has consistently said, it is renegotiation and then referendum. As the renegotiation is not yet complete, there is, as yet, no referendum date.

[Alex Salmond]

Given the breadth of the range of interests among the parties in the devolved nations that are asking for the referendum not to be held in June, and given that no date has been set, why are the Government so reluctant to accede to the views of the right hon. Member for Belfast North (Mr Dodds)?

[John Penrose]

I am coming to that, but I think it would be, at the very least, disrespectful to the principle behind the European Union Referendum Act 2015, which requires the date of the referendum to be set through a debate in the House on a statutory instrument, under the affirmative resolution procedure, in due course. When that point comes, there will be plenty of opportunities to debate the issue. I think that it would be premature to start ruling too many dates in or out, although I will be specifying the dates that we have already ruled out.

--- Later in debate ---

[John Penrose]

May I first congratulate my hon. Friend on sitting in a different place in order to demonstrate flexibility of mind and his ability to take a different approach once in a while, just to keep us all on our toes? On the specifics of his question, I have to confess that those elements have not been factored into any of my discussions on potential dates so far. Perhaps they should be, however, and I will take that information away if I possibly can.

The motion also notes the recommendations of the Electoral Commission on best practice for referendums. The commission has produced reports on previous referendums and we have taken on board many, if not all, of its recommendations in the European Union Referendum Act, including those on pre-poll reporting of donations and loans. We have also taken on board its views in other areas. For example, we followed its recommendation to change the wording of the referendum question. We also consulted it on the draft conduct regulations, which set out the detailed framework for the administration of the referendum poll. Those are just a few examples of how we have listened to the commission’s thoughts.

[Alex Salmond]

I am slightly puzzled as to why the Minister is praying in aid the fact that the Government have ruled out 5 May—the date of the elections in Scotland, Wales, Northern Ireland and London. My certain memory of the process last year during the passage of the Bill is that the Government did that only unwillingly when they were facing certain defeat on the legislation, so why is he now presenting this as a great Government concession?

[John Penrose]

I am just referring back to my notes, because I do not think I said that we did anything in that regard. I said that “both those dates are expressly excluded in the primary legislation that we passed last year”—that is, the legislation that this Parliament passed last year. I will leave it to Kremlinologists and others to decide whether that was done under pressure, with grace or in any other way. None the less, I hope the right hon. Gentleman will agree that the will of Parliament was expressed and that it was listened to extremely carefully.

European Union Referendum Bill

Debate between John Penrose and Alex Salmond

Thursday 18th June 2015 Commons Chamber

[John Penrose]

I refer the hon. Gentleman to the comments made by the right hon. Member for Wolverhampton South East (Mr McFadden). There is a degree of symmetry here and it would be bizarre indeed, as my hon. Friend the Member for Torbay (Kevin Foster) pointed out, to allow 16 and 17-year-olds to vote on an issue of such national importance when they cannot vote on their local council and on who collects the bins. This needs to be done on a broader basis, and I shall come on to that point in a minute.

Hon. Members have also said that young people are engaged and politically active. That is absolutely true, but it is also true of many 15-year-olds and not of some 50-year-olds. Political engagement is not a strong enough justification in and of itself for giving or denying the vote. Another argument that we have heard is that people can marry or join the Army at 16, and we have heard of a series of other activities that can or cannot be done at 16, 17, 18 or 21. I think the examples given included driving steam tractors. The important point is that in this country we have always viewed attaining adulthood and majority as a process rather than an event. It is not neat—I do not think it can be—and it varies from person to person and by activity to activity. If we want to compare different activities, the list on the parliamentary website that has been mentioned of things that are allowed at 16, 17, 18 or otherwise includes body piercing and having a tattoo at 18. I do not think that those are necessarily fruitful or relevant comparisons. We need to accept adulthood as a process, not an event, and that it is therefore tricky to deal with.

A number of my colleagues have said that they agree with, or are at least sympathetic to, the principle of votes at 16, but are concerned that it should not be done just for this election. I agree with that point. Many Members, such as my hon. Friends the Members for Warwick and Leamington (Chris White), for Norwich North (Chloe Smith), for Colchester (Will Quince), for South Suffolk (James Cartlidge), for Eastleigh (Mims Davies), for Torbay (Kevin Foster) and for Bath (Ben Howlett), felt the same way and said that this is an important decision that needs to be taken for the franchise as a whole rather than for an individual election. I believe that that is right and I do not believe that this Bill is the right place to make significant changes to the franchise.

[Alex Salmond]

Is it not reasonable to make the case that if the Scottish Parliament, Government and the then First Minister had not legislated to allow 16 and 17-year-olds to vote in the Scottish referendum, the current Scottish Administration would not be in a position to legislate for 16 and 17-year-olds to vote in next year’s Scottish election? Is it not time to start the process?

[John Penrose]

I am coming to the timing in a minute, if the right hon. Gentleman will allow me.

Although I do not think that this Bill is the right place to make significant changes to the franchise, the debate on the voting age is important. The Prime Minister himself has said that he thinks that it is right that it should take place, but making a change on this scale for a single specific vote will simply invite criticism that we are choosing a franchise that has been deliberately skewed for a low and partisan party political advantage. It is far better to hold the debate when the long-term question of votes for 16 and 17-year-olds at all future elections can be properly and soberly debated, and a moment’s glance at the Conservative party’s election manifesto, something that I am sure is bedtime reading for everybody on the Opposition Benches, will show that there should be opportunities to do just that during the course of this Parliament.

I now come to the amendments proposed by my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips)—I am never sure whether that is pronounced “Hickham” or “Hikeham”, and I apologise to his constituents if I have mispronounced it. He asks why the Bill does not enfranchise Irish citizens resident in Gibraltar. It is extremely hard to identify Irish citizens in Gibraltar on the voting register, and it is not something that is done currently. At present, we do not have agreement from the Government of Gibraltar to do that, because it would clearly impose duties and work on them. It is also true that no one is quite sure how many Irish citizens there are in Gibraltar, although most estimates are pretty low. Although I cannot predict the outcome, I promise my hon. and learned Friend that we are already discussing the matter in some depth with the Government of Gibraltar and will continue to do so.

My hon. and learned Friend also asked about the definition of Commonwealth citizens. For the purposes of elections, schedule 3 to the British Nationality Act 1981 sets out the list of relevant countries. Two are not currently members of the Commonwealth, and citizens of those countries would be affected by the amendment. The first is The Gambia, which withdrew from the Commonwealth in October 2013. The Government have not yet removed The Gambia from the list of countries in schedule 3, but will do so at the next suitable opportunity. Once we have made that change, citizens of The Gambia will no longer have Commonwealth voting rights. Crucially, the second is Zimbabwe, which left the Commonwealth in 2003. At the time, the Government decided to maintain Commonwealth rights for Zimbabwean nationals, based on the view that Zimbabwean people should not be punished for the actions of a Government that the UK did not consider democratically elected. Given our serious concerns about the 2013 elections in that country, this view remains.

Amendment 52 deals with votes for life. I think the hon. Member for Ilford South is trying to be helpful by tabling an amendment that is closely in line with my own party’s manifesto, and I thank him for that. I am not sure how his party’s Front Benchers feel about it, but he has not let that stop him and I salute his courage and determination. I am now hoist on my own petard, though, because having made the argument that this is the wrong Bill through which to deal with 16 and 17-year-olds voting, I must abide by my own logic on this point. However, I can give the hon. Gentleman the same assurance as I gave my hon. Friends, including my hon. Friend the Member for Totnes (Dr Wollaston), who was worried that we were kicking the question of 16 and 17-year-olds voting into the long grass. There will be opportunities in this Session of Parliament to vote on the matter, because we will be introducing our own Bill on votes for life, which will apply to all franchises, to make sure that British citizens who live abroad who are not currently able to vote and exercise their democratic rights, even though they are citizens of this country, are able to do so. I look forward to having the hon. Gentleman’s support, even if not that of those on his Front Bench, on that very important matter.

European Union Referendum Bill

Debate between John Penrose and Alex Salmond

Tuesday 16th June 2015 Commons Chamber

[John Penrose]

We have heard an extensive set of contributions in this debate, including from my hon. Friend the Member for Gainsborough (Sir Edward Leigh), the hon. Member for North East Fife (Stephen Gethins), my hon. Friends the Members for Stone (Sir William Cash) and for Harwich and North Essex (Mr Jenkin), the right hon. Member for Gordon (Alex Salmond), the hon. Member for Glenrothes (Peter Grant), my hon. Friends the Members for Aldershot (Sir Gerald Howarth) and for North East Somerset (Mr Rees-Mogg)—he was kind enough to say nice things about the constitutional impact of Somerset—my right hon. Friend the Member for Wokingham (John Redwood) and my hon. Friend the Member for Daventry (Chris Heaton-Harris).

I will start by saying a few words about clause 3 in general. I will then speak to the Government amendments before endeavouring to respond to the various points that have been made by colleagues on both sides of the Committee. Clause 3 sets out that part VII of the Political Parties, Elections and Referendums Act 2000—PPERA—applies for the purposes of this referendum. It has been in place since 2000, so it provides a well-established and understood framework for regulating referendums in this country. For example, part VII sets the spending limits for campaigners during the referendum period and the rules on donations.

However, the legislation for two recent referendums—on the voting system in 2011 and on Scottish independence last year—although based on PPERA, also provided examples of how the controls on campaigning and the framework for conducting a referendum could be improved. Where those changes have improved the regulation of referendums, with the support of the Electoral Commission, we have sought to replicate them in the Bill.

[Alex Salmond]

The Minister is quite right about building on experience to try to augment the PPERA recommendations. If the Government have done that with regard to finance, why did they not do it with regard to purdah?

[John Penrose]

We have already discussed that, and I understand that promises were made from the Dispatch Box earlier this afternoon by my colleague the Minister for Europe. Further proposals will be brought back to the House in due course, and I hope that the right hon. Gentleman and other colleagues will be pleased by what is brought back at that point.

Clause 3 therefore introduces schedules 1 and 2, which make further provision, and it modifies PPERA in relation to the campaigning and financial controls that will apply for the referendum. It also introduces schedule 3, which makes further provision, and it modifies PPERA in relation to the framework for administering the referendum.

Rather than spending a great deal of time on the detail of those schedules, I will move on to the Government amendments and then try to respond to the other amendments in the group, particularly those tabled by colleagues on the Government side of the Committee. The Government have tabled two amendments, which I will briefly explain. Amendment 14 will increase the spending limits for permitted participants at the EU referendum. The limits will apply instead of those provided for by PPERA. The increase takes account of inflation since PPERA was passed in 2000 but goes no further. The changes will apply to the spending limits for all those campaigners who are eligible to become permitted participants on both sides of the debate, including the designated lead organisations and political parties. It should be fair for both sides.

Amendment 15 gives effect to a recommendation of the Electoral Commission. It provides that where campaigners register as permitted participants but do not incur regulated spending, the responsible person must submit to the Electoral Commission a declaration that no regulated expenses were incurred. It will apply only for the purposes of this referendum. It is a technical amendment. Under the current provisions, there is no provision for a nil return. Although that can perhaps be seen as a logical approach in the event of a campaigner not spending, it creates a challenge for the Electoral Commission in undertaking its statutory duties. When a registered campaigner does not submit a spending return after the poll, it is not always clear whether that is an act of non-compliance, or because they have not incurred regulated spending. The amendment will make the situation clearer. Every registered permitted participant will be required to submit a return or declaration of some sort. Failing to do so without reasonable excuse will be a criminal offence. That should help to ensure that the Electoral Commission can focus its attention on clear cases of non-compliance. Given that it applies only to people or organisations that have already registered as campaigning groups, it ensures that transparency will be paramount.

Let me move on to some of the other amendments in the group. I will begin with amendment 9, tabled by my hon. Friend the Member for Stone, which a number of colleagues have addressed. The amendment seeks to extend the referendum period from the currently envisaged 10 weeks to up to 16 weeks. Having listened to my hon. Friend’s speech, I think that he is particularly concerned because at the start of any campaign the Electoral Commission needs to go through a process of designating the lead campaigning groups, and in the past there have been great concerns. In fact, the designation process has occasionally lasted for five or six weeks. If that six-week period begins at the start of 10 weeks of referendum campaigning, we will effectively end up with lead campaigning organisations being designated as such, and getting the public funds to which they are entitled, with a period of only four weeks to go before polling day. My hon. Friend rightly pointed out that that might put a crimp in the way in which the campaign was run, for both sides, which would not leave enough time to air important issues or make preparations. His proposed solution is to extend the period from 10 weeks to 16 weeks. I suggest a slightly more flexible alternative, which I hope will achieve the same outcome.

The Bill states that Parliament must agree to an affirmative statutory instrument to fix the date of the referendum in law. As my hon. Friend knows, an affirmative SI takes about six weeks to go through Parliament. Therefore, after the announcement of the election date, the House will consider the SI for a period of about six weeks before it approves the date of the referendum, and only then can the 10-week period start. Clearly, that will not help unless the designation of lead campaigning organisations can be done in parallel.

As my right hon. Friend the Member for Wokingham and others have mentioned, stirrings of campaigns are already under way. Campaigns are already gearing up, and the organisations involved are already co-operating and co-ordinating with each other, although we are at an early stage. I encourage those on both sides of the debate to engage at an early stage with the Electoral Commission, because both sides will, in all probability, start campaigning unofficially long before the eventual official start of the referendum campaign. Because they will be able to start engaging with the Electoral Commission at an early stage, not only will we be able to begin designation six weeks before the beginning of the 10-week period, but we stand a decent chance—with the Electoral Commission’s blessing, of course—of getting through the designation process rather faster than we otherwise could.