Laura Sandys
Main Page: Laura Sandys (Conservative - South Thanet)
Caroline Flint
We had something like that, but I am afraid that the present Government have taken it away. If we want to get to the root of the problem, we have to think about radically reforming how the energy market works. We have to create a dynamic and more open energy market that deals with climate change and operates in the interests of the consumer, not the vested interests of the few.
At the Labour party conference, my right hon. Friend the Member for Doncaster North called for reform to the energy market to end the dominance of the big six and get a fairer deal for the people of Britain. While the Government have been failing to act to prevent sky-high energy price rises, Labour has been leading the debate and is coming up with radical ideas to reform our energy market and deliver significant reductions in gas and electricity prices for millions of consumers. Our plans would provide immediate help to millions of families now and reform the energy industry to provide a new bargain in the future.
Laura Sandys (South Thanet) (Con)
The right hon. Lady is making a critique of the current regulatory regime, which was the Labour Government’s regime. What we are doing is reforming the electricity market and there is also Ofgem’s retail market review. Those are the steps taken forward, and we will ensure that they deliver value for the consumer. The previous Government published 32 Green Papers and consultations and passed two pieces of legislation, so there was a lot of inactivity over the past 13 years.
Caroline Flint
I think I have already said that, back in 2007, we embarked on securing Europe-wide support for reform of the energy market. I am afraid to say that the negotiations on which the leader of the Labour party led have yet to be implemented. They are seven months overdue; they could have been implemented in this country seven months ago, but it has not happened yet. We are calling for further radical restructuring: we have argued for the energy giants to put all their power into a pool, but we have not heard that echoed by the Government. We have made many demands for transparent data to go to the regulator, but again we have not heard that echoed by the Government.
Caroline Flint
I will continue to expand on my theme a little, if I may, but I will be happy for the hon. Lady to intervene again if I have time.
If we want to get to the root of the problem, we must talk about reform, and our plans would provide immediate help for millions of families. First, we must deal with the sheer number and complexity of energy tariffs, which are extremely confusing and unfair. They hit loyal customers and penalise those who use less energy, and they really must be reformed. We propose a simple new tariff structure, which will be clearer and fairer and which will help all energy customers to get a better deal. It would work like a phone bill, with a daily standing charge and a cost per unit for the energy used.
Simplifying the pricing of energy would make it much easier for people to compare deals, work out which is the cheapest for them, and ditch the ones that are ripping them off. We need to get rid of expensive primary units and unregulated standing charges, so that people are no longer penalised for being low energy users, which is quite ridiculous. Instead of his “Check, switch, insulate” mantra, could the Secretary of State not try “Simple, honest, straightforward”? That might work better for customers.
What about redress? I understand that only two days ago, on breakfast TV, when asked about our proposal for a thorough investigation of past mis-selling and compensation for customers who have been ripped off, the Secretary of State suggested that that was not worth doing because it would delay other reforms. Labour Members will accept new protection measures as they are introduced, and we agreed that that should happen throughout Europe when we were in office. However—let me challenge the Secretary of State by repeating this—we are saying today that a full investigation into past mis-selling must be initiated, and that those who have been ripped off must be fully compensated.
James Morris (Halesowen and Rowley Regis) (Con)
It is a pleasure to follow the right hon. Member for Wentworth and Dearne (John Healey), who made a powerful case on behalf of his constituents and made some valuable points.
This is an important debate, because as I know from talking to my constituents in the west midlands, people are genuinely concerned about rising utility bills. As other hon. Members have pointed out, including the Secretary of State, fuel poverty urgently needs to be addressed. The west midlands as a region has the greatest proportion of people in fuel poverty in England, at 22.5% of the population or some 500,000 people. Around 20% of my constituents—7,500 people—could be defined as being in fuel poverty. This issue therefore needs to be tackled urgently. It has been around for a while: it has not suddenly emerged in the last 18 months, although I accept that genuine spikes in fuel prices have made the situation more difficult.
The Government need to respond—and they are responding—with a mix of policies. Both short-term and long-term policies need to be deployed to tackle the entrenched problem of fuel poverty and the situation that we face. However, there is no silver bullet, as it were, that could be fired to solve some of the difficult problems that we face from rising fuel prices. I know that hon. Members on both sides of the House have made some valid points; I am bucking the fashion by not having a five-point plan—because a number of the issues are interlinked. We live in a society where our houses lose energy very rapidly—something about our housing stock is weak in that regard—which is why I am supportive of the Government’s initiatives in the green deal, which I believe offers a comprehensive solution to improving energy efficiency. The green deal will also have the side benefit of potentially providing important jobs in the area of the black country that I represent. I know, having talked to many local organisations and people in the Rowley Regis area, that there is particular enthusiasm for the green deal. We need to tackle energy loss in our housing stock.
I also welcome other initiatives that came out of the summit that was held earlier in the week. The big six energy companies have a responsibility to communicate information to their customers in a much more targeted way, so I welcome the announcement that they are to write to the 4 million most vulnerable energy consumers about the opportunities that are available for home insulation. That strikes me as a fundamental responsibility, and the big six need to concentrate on the way in which they communicate basic information to some of the most vulnerable in our communities.
Just as we need to tackle the problem of energy loss in our housing stock, we also need to focus on unnecessary energy use. This is not about going around lecturing people on how they should heat their homes, but I know that the Government are committed to introducing smart meters, which will make a fundamental difference. This is a long-term project, but, as I have said, we need short-term and long-term measures to address these questions. Smart meters will introduce a major change in the way in which people consume energy, and they will certainly help them to have a clearer idea of their family or individual energy use.
The Secretary of State and others have also raised the broader strategic point that we face major issues of energy security in Britain today. The fact has been well documented that Britain is very vulnerable to energy price shocks, and our dependency on imported gas and oil has given rise to energy security issues. This is a macro question, and it is imperative that we diversify our energy sources. Hon. Members have talked about the use of nuclear power, as well as other forms of low-carbon energy and renewables, over the next 10 to 20 years. This is critical; we are not going to solve the problems affecting our most vulnerable residents and consumers unless we are clear about dealing with the diversity of our energy supply and the problems of energy security. Those factors are critical to the debate.
Other hon. Members have mentioned tariff complexity. This brings us back to the responsibilities of the big six energy companies. The market is too complicated. There are too many tariffs and it is confusing for consumers. I agree with the right hon. Member for Wentworth and Dearne that those who suffer most from this tariff complexity are the most vulnerable of our residents.
Laura Sandys
May I add that it is not only the most vulnerable people in society who do not understand the tariffs? In fact, very few people understand them. A fundamental problem is the idea of a unit. I do not know what a unit is. I do not know whether my hon. Friend knows what a unit is. We must start using language such as “an hour’s use of a bulb”, or some other form of consumer language. Companies need to be much less old fashioned, and much better at consumer communication. They need to communicate the value of the units and what we are paying for them.
James Morris
My hon. Friend makes an important point. The energy companies need to simplify the tariffs, but as she says, the language used to communicate also needs to change. The big six have a responsibility for communicating information in a way that is comprehensible and does not distort consumer choice. That is a fundamental issue. Ofgem has a responsibility here and the Government need to ensure that they keep the pressure on it continuously to monitor how information is distributed within this market to ensure that it is a truly competitive one. Ofgem must be on top of this, constantly monitoring to ensure that we get simplification both of the tariffs and of the information sent to consumers.
In the short term, as other hon. Members have mentioned, it is critical during the lead-up to this winter to maintain the winter fuel and cold weather payments, and to implement the warm home discount. Those are important short-term measures to maintain the situation and ensure that our most vulnerable residents are not put under pressure as they seek to heat their homes during what might be a very difficult winter.