Energy Price Freeze

John Redwood Excerpts

Wednesday 2nd April 2014 Commons Chamber

[Mr Davey]

That is simply not true. We were reforming the markets from day one because we had inherited the big six from the Labour party.

Let us return to the small independent competitors. In its response to Labour’s Green Paper, Good Energy said:

“The proposed price freeze poses a disproportionate impact for smaller companies such as ourselves as we do not have the same level of vertical integration as the big 6 which allows us to control our costs.”

If raw energy costs rise during a freeze, vertically integrated firms with deep pockets can withstand a profits squeeze, but smaller, retail-only firms would go bankrupt. Result: reduced competitive pressure on the big six and higher overall prices when the freeze comes to an end.

[Mr John Redwood (Wokingham) (Con)]

Given the very high cost of wind energy, does the Secretary of State think there should now be some limit on the subsidy going to that sector to try and keep bills down?

[Mr Davey]

There is a limit, of course. The right hon. Gentleman ought to follow this debate more closely. Indeed, we have reduced subsidies and our policy is to reduce them still further.

The truth is that, rather than helping consumers, Labour’s price freeze is a pro-big six policy. For all the bluster about taking on the big six, the right hon. Member for Don Valley is just playing into their hands. If Labour makes the smaller competitors go bankrupt, the people who will enjoy that are the big six, and the right hon. Lady knows that.