Domestic Gas and Electricity (Tariff Cap) Bill Debate
Full Debate: Read Full DebateJohn Redwood
Main Page: John Redwood (Conservative - Wokingham)Department Debates - View all John Redwood's debates with the Department for Business, Energy and Industrial Strategy
(6 years, 3 months ago)
Commons ChamberWe have to bear in mind that people will be introduced to a new tariff. Indeed, we hope that by the time the market returns, the issue of people remaining on SVTs for years and not switching will be a thing of the past and there will not be SVTs in the system, but also that there will be other tariff arrangements that effectively prevent SVTs from playing the role they have played before.
In amendment 6, the hon. Gentleman is trying to ensure that people get money off, which we would all like to see, but would it not be necessary to include some kind of rider so that it applies only if people are burning the same amount of energy year after year? If we went from a warm winter to a very cold one, presumably he would not think we could guarantee the same amount.
Amendment 6, as I recall, would simply place the Prime Minister’s words into legislation. It was estimated that a saving of at least £100 would result from the measures, and one aim of the legislation was to bring that saving about. It does not mean that the amount would be exactly £100—indeed, had the Prime Minister not reported that to The Sun, we might have got a rather more complex version of that price promise. We are merely reflecting what was heard on that occasion, and I hope the right hon. Gentleman will take the amendment in the spirit in which it is intended.
As my right hon. Friend says, he and I have had many conversations about this over many months. I can only say to him that if his argument is that Ofgem might come up with a version of an absolute cap that is a bit less absolute and a bit closer to what I am proposing—in effect, one that caps the gap: a relative cap—I would agree with him that that is a good thing, but if that is the case, as a source of advantage for the cap, why would it not be even better to go the whole hog and have a relative cap in the first place?
Does my hon. Friend think that a relative cap is more likely to deliver a better deal for the customer than an absolute cap?
Yes, absolutely. We heard from the hon. Member for Southampton, Test (Dr Whitehead) what I thought was actually rather a good explanation about why such a cap is so wonderful. The Opposition disagree about the purpose, but the fundamental reason why we are all in the Chamber is that we agree about the injustice in the way the energy market works at the moment, which is that people can start off on one tariff and then get secretively pushed on to a much higher one. It is the clandestine mark-up that riles everybody and really upsets people. By definition, a relative cap would affect what is hacking everybody off, and it would be precisely targeted on dealing with the mischief that is the reason behind the Bill in the first place.