Strategic Road Network: South West

Debate between John Penrose and Jesse Norman

Wednesday 19th July 2017 Westminster Hall

[Jesse Norman]

I am very grateful to the hon. Gentleman for raising that question. The answer is that we have a number of funds available and we look forward very much to the submission of bids, which will be given the full scrutiny that they deserve and merit.

Let me turn to the questions raised by my hon. Friend the Member for Bridgwater and West Somerset. He started by referring to the A39, which I will touch on for a second. He will be aware that that is a local road, but as he also knows, the Government recently announced that from 2020, under the new roads fund that we have set up, which is entirely funded by vehicle excise duty—that is a tremendous innovation, or rather a move back to the future for our road network—we will segregate what we consider to be a major road network investment programme. I think that the A39 will be eligible to be funded under that programme. Once the consultation has been done and work is under way to programme that investment, my hon. Friend and local authorities will be absolutely welcome—indeed, they will be invited—to submit bids. I am aware of his strong feelings, rose-tinted spectacles or no, and those of my hon. Friend the Member for Wells (James Heappey) about the importance of dualling that road in both directions.

Overall, the Government are investing heavily in the road network in the south-west and have committed some £2 billion to major schemes through the road investment strategy. Later this year, we will announce the preferred route for the A303 Stonehenge tunnel, which is a very significant project in its own right, and for the A358 Taunton to Southfields and A303 Sparkford to Ilchester schemes. I understand that my hon. Friend the Member for Bridgwater and West Somerset has particular concerns—concerns that he expressed with considerable pungency—about the route that the A358 should take into Taunton.

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

Will the Minister reassure us all that, regardless of which of those routes and attendant end points for the A303 are eventually chosen, utmost priority will be given to completing that work as fast as possible? My hon. Friend the Member for Wells (James Heappey) cannot contribute to this debate—he is the Minister’s Parliamentary Private Secretary—but I know that he and my hon. Friend the Member for Torbay (Kevin Foster) feel strongly that taking the pressure of long-distance traffic off the M5-M4 triangle and allowing it to make progress down the A303 corridor is absolutely essential for everyone who lives on the M5, as well as for the long-distance traffic that uses it to get through Somerset.

[Jesse Norman]

I very much take my hon. Friend’s point. Of course, the point of the tunnel is not merely to safeguard the extraordinary and historic global asset we have at Stonehenge; it is also part of a much bigger programme of trying to improve the A303 for trunk purposes, in a way that is designed precisely to lift some of the pressure off other arterial routes. I take his point very well.

I should say that I do not recognise the description that has been given of Highways England. From my limited experience as a Minister, I know that it is not a perfect institution, but it has made significant progress since becoming Highways England. It is undoubtedly focused on the task of the effective delivery of schemes in order to get the best outcome for local people, which my hon. Friend mentioned.

[John Penrose]

May I reassure the Minister that there are those of us who do rather enjoy working with Highways England? It is certainly being helpful on the question of junction 21 of the M5 and junction 21A in my constituency. I can vouch for his point of view.

[Jesse Norman]

I am glad of that intervention, and if I may, I will proceed with my remarks.

To return to the A358, of course my hon. Friend the Member for Bridgwater and West Somerset made some quite colourful remarks about that. I am sure he will understand if I do not take a position on the issue, but he has made his concerns, and the public concerns of others, very well, and they sit in the record for further excavation and inquiry.

As my hon. Friend will know, Highways England recently held a public consultation on the routes that the A358 should take, and it will work closely with local partners to advise the Secretary of State and myself on the preferred route. Those schemes are just the first part of the £2 billion plan I mentioned to create a new dual carriageway route from the south-west to London.

If I may range slightly further outside the specific issue of the A358 and the A303, improvements to the A30 in Cornwall—both a planned improvement and one nearing completion—will extend dual carriageway standard road as far as Camborne. The Temple to Higher Carblake section opened last week and Highways England announced the preferred route for the Chiverton to Carland Cross scheme earlier this month.

Highways England is also creating a new junction on the M49 to support development at Avonmouth. The port of Avonmouth and the Avonmouth Severnside Enterprise Area to the west of Bristol currently have no direct access to the M49, which is hindering proposals to support economic growth in the area. A new junction on the M49 will improve access to those areas, ease congestion and contribute to the economic growth of the region.

Energy Prices

Debate between John Penrose and Jesse Norman

Thursday 16th March 2017 Commons Chamber

[Jesse Norman]

It is an interesting suggestion that the changes may have cushioned the effect of price rises in the way the right hon. Lady describes. I thank her for that thought, and I would certainly like to give it some reflection.

[John Penrose]

Further to the intervention of my co-sponsor, the right hon. Member for Don Valley (Caroline Flint), the point about prices versus bills is an important one. Does the Minister agree that if prices stay unfairly or unnecessarily high, one of the Government’s other main goals of improving overall productivity across the economy—energy bills are a vital and central part of the cost base for most businesses—will be much harder to achieve? We can do more with less if we are more efficient in our energy sector.

[Jesse Norman]

This is really a debate about retail energy prices. The problems are less marked in many areas of the business market, but it is undoubtedly true that business bills must be kept as low as possible to encourage productivity. As my hon. Friend knows, the Government have undertaken several steps precisely to achieve that.

Colleagues on both sides of the House have noted that, with suppliers buying their energy up to two years in advance, suppliers should be protected from recent fluctuations in the wholesale energy price. Some suppliers have chosen to act differently by freezing standard variable prices through winter and beyond, which alone shows that price rises are not inevitable. It is a fact that the majority of customers—around 66%—are on standard variable tariffs and continue to pay considerably more than customers on fixed-term deals.

The Competition and Markets Authority highlighted that such customers have been losing out by an estimated £1.4 billion a year—that figure is disputed—over the past few years. There have been persistently high differentials between the cheapest fixed deals and standard variable tariffs. The latest published Ofgem data show the differential to be some £200. There has been good focus today on fuel poverty, as there was the other night, and it is those who can least afford it who are most likely to lose out. Households with low incomes, people with low qualifications, those in the rented sector and those over 65 are more likely to lose out than others. The recent price rises serve only to underline the fact that the majority of consumers are paying more than they need to pay.

What can be done about it? The House widely recognises that, in many markets, effective competition drives down prices, promotes innovation and assists improvement in customer services. The Government have worked hard with Ofgem to try to improve competition. The right hon. Member for Don Valley (Caroline Flint) mentioned “Groundhog Day,” possibly inadvertently casting herself in the role of Andie MacDowell, which is certainly how I see her. It is not fair to say that we are in “Groundhog Day” because there has been some progress. Members rightly point to the fact that there are now more than 50 energy suppliers in the domestic market, up from 13 in 2010, and of course there are potential new entrants, including local authorities, waiting in the wings—we welcome them to the market. Independent suppliers now have more than 18% of the dual-fuel market, up from less than 1% seven years ago.

I was pleased to hear from the hon. Member for Bristol East (Kerry McCarthy), who mentioned Bristol Energy and the social conscience it brings to energy supply, which is typical of a tier of new and wider-ranging suppliers, including not-for-profit suppliers, that have entered the market—there are housing providers, too. Smaller suppliers are leading the way in using smart, pre-pay and other technologies to support customers in finding the best deal using their mobile phone.

We had a good discussion on switching, and it has been rightly noted that an increasing number of households are switching their energy supplier. There were some 7.8 million energy account switches last year, an increase of 28% on the previous year. Switching is putting increasing competitive pressure on the big six—although, as my hon. Friend the Member for Weston-super-Mare noted, there is a great deal of churn—but it is still only 15.8% of gas and electricity customers, so we are a long way from a position where anyone should feel that a large number of people are actively availing themselves of the opportunity to switch, as one might expect in a more competitive market.

For too long, too many customers have been left on poor-value deals. At the end of last year, the Government announced new measures to increase transparency for consumers. I welcome the point the hon. Member for Southampton, Test (Dr Whitehead) made about transparency, and he is right: several studies have found that the markets are less transparent here in many different ways than one might like. An effort was made to begin to crack that and increase transparency for consumers, including through the publication of an energy supplier league table by Ofgem, which was designed to shine a light on the most expensive standard variable tariffs.

We know that some consumers worry that switching supplier may be difficult and time-consuming. This is not just an economic matter; it is also a cultural matter. We must recognise that and not allow purely economic analysis to take over. We are also taking forward proposals to mandate Midata in the energy sector, which should also have an effect. Midata will allow consumers to get hold of their energy data electronically and use them to find the best deal. It will make the switching process quicker, easier and more accurate, and, with luck, it will allow people to switch using tablets and smartphone applications more easily. We are very keen that the benefits of this are not restricted, in any sense, to the tech savvy, but are available to anyone who owns a mobile phone at the very least. We will therefore work with industry, switching companies and consumer groups to ensure that all consumers can access and use their data to switch.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) rightly mentioned the time it takes to switch supplier. All I would say is that it used to take five weeks and the Government are working with Ofgem to get it down now to 21 days. Once we have done that, we will work to push it down to where it should be, which is at 24 hours. That will be a major improvement to our system.

There was some discussion about customer service, where some improvement has been made. The latest Ofgem data show that suppliers received more than 3 million fewer customer complaints in 2016 than in 2014, but as there were still 3.5 million complaints that is not saying much and they still have a long way to go. We are working with Ofgem and the ombudsman to identify and fix systemic issues, which damage customer service. As the House will know, an Ofgem review last year resulted in increased communication between Ofgem, the ombudsman and Citizens Advice, an organisation I greatly esteem, as I know many colleagues do. It is working on developing a rating system that will help customers to see at a glance how their energy suppliers are performing.

As Members noted, the CMA had some positive things to report after concluding its two-year energy market investigation. It found that wholesale energy markets and the retail market for larger businesses are working well, but for domestic energy suppliers the report is a wake-up call. It is important to note that the CMA’s report was not unequivocal in every sense, and it has been contested; I note a letter from some senior energy regulators who raised the question of whether it is true to see detriment in the way the CMA has. It is important to acknowledge that fact. However, the CMA’s position was clear: consumers should be able to trust energy companies and to know that they are getting a good deal. The CMA found that a lack of competition meant that about 70% of big six customers remained on their supplier’s most expensive tariff despite the savings they could make by moving to another tariff. We have encouraged, and Ofgem is introducing, a prepayment meter cap, which will protect 4 million households across Britain from the beginning of next month.

We are determined to go further and, as the House will know, we have a consumer Green Paper in prospect, which will examine specific sectors. We will respond sooner rather than later, and separately, to the CMA energy market report. Our Green Paper will examine markets that are not working fairly for consumers. In general, consumers in this country enjoy strong protections and an effective regime which help them get the best deal, but where those markets are not doing their job—where competition is not effective—the Government will look to intervene to improve competition and to strengthen outcomes.

The Green Paper will complement and sit within the Government’s industrial strategy to build on the work to deliver an economy that, as I have described, works for everyone. We announced some proposals in the Budget, including the ending of the cycle of subscription traps, the shortening and simplification of small print, and the introduction of new powers to impose fines on companies that mistreat customers. The Green Paper will provide more detail on those proposals.

Let me round up my speech with a couple of reflections on some of the helpful comments that were made in Members’ speeches. I was intrigued to notice that, according to the hon. Member for Brent Central (Dawn Butler), it is now Labour policy to renationalise the big six companies. I would welcome further clarification on that, together with an explanation of how much it would cost and how it would be funded. That was an interesting contribution.

I very much congratulate and thank my shadow, the hon. Member for Southampton, Test, for recognising the complexity of the problem we face. He is certainly right to focus on transparency. In recognition of that, I assure him and my hon. Friend the Member for Weston-super-Mare that the Government will reflect on such contributions. The Government’s record on intervening in electricity and energy markets is not absolutely unblemished. On several occasions, changes have been made, only for them to have to be unwound because it turned out that they were contrary to competitive pricing or innovation. That is worth recognising.