Energy Price Freeze

John Robertson Excerpts

Wednesday 2nd April 2014 Commons Chamber

[John Robertson (Glasgow North West) (Lab)]

I find the Secretary of State’s rather patronising attitude towards my right hon. Friend the Member for Don Valley (Caroline Flint) somewhat distasteful. [Interruption.] I know he is not listening, but it will be in Hansard. He can read about it later. If he wants to conduct his politics in that manner, may I suggest he goes out in the street to do so? Or he should try to conduct himself in a manner befitting of the House.

Let me explain something to the Secretary of State. He obviously does not understand what the word “freeze” means. It means that something is stopped. It is solid and it stays where it is. He seems to have missed that. I noticed that he said he had challenged the big six. I would be interested to know when and what he did to make them do anything, other than be very nice to them and help them to increase their prices, as they have done. The Energy and Climate Change Committee has done more to attack the big six and make them toe the line than his Government have done.

[Mr Jim Cunningham (Coventry South) (Lab)]

My hon. Friend raises an interesting point in asking what the Secretary of State has done to challenge the big six. The big six actually bought off the Secretary of State by proposing a £50 reduction on people’s bills, amounting to 97p a week. They were laughing at him.

[John Robertson]

I thank my hon. Friend for that; he is of course right.

Let us face it: we are where we are. It does not really matter what the Con-Dem Government have done in the past four years, or what the last Labour Government did in the previous 13 years. The problem is what is happening now. Fuel poverty is a bigger problem today than it ever was. We could say that that is a result of bad government and that it is this Government’s fault because they have been in power for four years and they should have done something. Well, they did do something. The Secretary of State talked about getting reports and asking for suggestions, and he has done that. His predecessor also did it, resulting in the Hills report.

The Hills report stated that nearly 2.4 million people were still in fuel poverty, and the gap between their bills and what they could afford was getting wider. It also found that about 3,000 people could be expected to die over the course of a winter as a result of Government policy. That was not necessarily all to do with energy, however; it referred to Government policy overall, and it applied to all Governments. This was a good report, and it was commissioned by a Liberal Secretary of State. But what have the Government done since then? How many lives have been saved since the Hills report? What action have they taken to tackle fuel poverty?

The answer, Secretary of State, is that you have done absolutely nothing. Sadly, more people are dying now than when the Hills report first came out. An energy freeze might not be the answer to everything, but if you are happy with the way Ofgem is running things, with the way the energy market is conducting itself and with the present state of affairs, then do as you are doing now: do absolutely nothing—

[Mr Speaker]

Order. May I very gently exhort the hon. Gentleman not to use the word “you”? I know that he is doing it for the purpose of emphasis, but it is undesirable if it is widely mimicked. He is felicitous of phrase—he can express himself in a different way.

[John Robertson]

I apologise, Mr Speaker. Thank you for pointing out to anyone who might have thought I was talking to you that I was actually talking to the Secretary of State.

It is up to the Secretary of State to look at this problem. He has called the proposal from my right hon. Friend the Member for Don Valley a “con”, but I do not think it is a con if we try to do something. I believe that we need to fix the industry, because the big six are not doing the job that they should be doing. It is they who are conning people. It is a bit rich for the Secretary of State to say that we are conning the public, when it is the energy companies that are doing the conning. They are the ones putting up the bills, and the public have to respond by paying them their money.

So let us have a freeze. Let us look at the energy companies and see what they are doing, and if we have to fix the situation—as I believe we will—let us try to do it in a window lasting between 18 months and two years. If we can fix it in that time, and if the energy companies end up out of pocket, it will be up to the Government to fulfil the need that has been lost, rather than the general public, because the freeze will have been imposed by the Government of the day, which I hope will be a Labour Government. The most important thing is to look after the people in this country who are living in fuel poverty. In Scotland, 1 million people classify themselves as fuel poor. When we add that to the figure for England, it takes us well above the 2.4 million figure that we had years ago. We need to do something about that.

The energy companies have shown their true face recently. The chief executive officer of British Gas—a company that had a monopoly on gas supply for years—has said if a price freeze were imposed, there would be blackouts. If the Secretary of State believes that that is right, it will be up to him to sort out the problem, because it is the duty of the Government to ensure that the lights do not go out. The CEO might try to blame people for proposing a freeze, but I believe that a freeze would be helpful in sorting out the energy business in the long term.

The Secretary of State has not expressed the hatred for Ofgem that some of those on my Front Bench have done. I believe that it has got worse, rather than better, over the past two years, despite the discussions that the Select Committee and others have had with it. It has never worked quickly. Some might say that that is a good thing, because if it worked quickly, it might make mistakes. They would prefer that it took its time, in order to ensure that it did the right thing. However, I believe that it takes so long to act because it is frightened to make certain decisions and because it does not think it will have the backing of the Government.

[David Mowat]

On the hon. Gentleman’s point about the CEO of Centrica, what Sam Laidlaw actually said was that, if there was a possibility of his business being split into two halves in a couple of years, it would affect his propensity to invest in one of those halves until the matter had been sorted out. That seems quite a reasonable statement to make. He did not say that the lights would go out.

[John Robertson]

I thank the hon. Gentleman for his intervention. If he is right and I am wrong, I apologise, but that is not what it said in the newspapers. That is not how the CEO was quoted. He was quoted as saying that the lights could go out. To me, that sounded like the big bully threatening people in the playground: “I’m going to put your lights out.” That is basically what he was saying to us. Well, I know how to deal with bullies, and it is not my lights that will be going out. I say to the CEO of British Gas that if he and his company cannot do their job, there are plenty of other companies that would like to take it on. If that is the case, let us sell it off to other people who are willing to do the job. We do not need to listen to bullies telling us how they want to run the country. That is a matter for the Government, after all.

We have heard a lot about the green levies, which the Government have reduced. Some of us felt that that was not the right thing to do. Having said that, if people’s bills were to be reduced by £50 as a result, that would have been great. But their bills were not reduced by £50; they have gone up by £60. The energy companies are saying to our constituents, “Hey, good news! The Government have just saved you £50”, but a lady in my constituency could not even afford the bills before the £60 increase, so no credit is due to the Government there.

I ask the Government to look into this matter, and it would be much better to do this in a cross-party manner. I believe that this Secretary of State is doing his very best to stop the multi-party arrangements in energy, but in the past we have always got on well together. We ought to work together as a team to try to get the country back together again and to put an end to this point scoring.

[Mr Sheerman]

My hon. Friend makes a good point about the importance of working together across the parties. Does he agree that, if the Secretary of State and the Secretary of State for Business, Innovation and Skills did not have the Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon) standing guard over them to ensure that they keep to the Conservative line, we would get a much more rational response from this Liberal Democrat Secretary of State?

[John Robertson]

When more than one Department is involved in this place we always have a problems—it does not seem to matter what is done. If we involve a Secretary of State for Business, Innovation and Skills and a Secretary of State for Energy and Climate Change, they are going to have their own drivers, which are not always the same. A Minister put in place to cover both Departments has a hard job, because it cannot be easy dealing with the Secretary of State for Energy and Climate Change, let alone the other one. So good luck to the right hon. Member for Sevenoaks—we will see where he goes. We certainly need to look at how energy is governed, and it should not be done across Departments. One Department should be dealing with it, although it could be done by a bigger Department.

I have no objection to companies making profits, but profits have gone up by £3.3 billion since 2010. The Secretary of State talked about what happened in 2009, 2006 and 2007, but he never said anything about what happened after that. The fact of the matter is that an increase of £3.3 billion since 2010 is a touch excessive. Public affairs consultants in the big six say they make only 2% profit while bragging to their shareholders that profits have gone up 20 times as much. That deals with what the hon. Member for Warrington South (David Mowat) was saying about the splitting of wholesale and retail. Everybody knows that I have spoken about that for a number of years. I believe that they should be split, because all we ever get from energy companies is that they have an increase in profits—it could be 4%, 5% or 6%—but that it is not enough to help them invest.

[Mr Mike Weir (Angus) (SNP)]

Is the hon. Gentleman’s position that the companies should be split into separate companies or two separate divisions? I cite, as I have done before, the position of E.ON, which apparently has two separate divisions but has complicated loan arrangements within them that reduces the profits. We must have transparency if this is to happen.

[John Robertson]

The hon. Gentleman is right about that. I am not a business man. I was an engineer, so I only like to fix things—I do not particularly like to break them, although in the case of the Government that is perhaps something else I would like to do. What he describes is a problem. When we split these companies up, do we say, “You can have either wholesale or retail, but you cannot have both”? Or do we say to a large company, “You have to split, as happened with BT, where it was split into wholesale and Openreach”? Do we say, “You have a choice, you can be one or the other but you cannot cross-fertilise and give people loans”? I do not know whether that is a good idea, but we have a regulator and a Government to deal with these things. Cleverer people than me will be able to work out what the best fit for the nation will be. But what I do believe is that the people I represent are the ones nobody consults but they are the same people we want the money from at the end of the day.