Energy Market Reform

Luciana Berger Excerpts

Wednesday 24th October 2012 Commons Chamber

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

It is one week since the Prime Minister sent the Government’s energy policy spinning into chaos, yet after this afternoon’s debate, I am not sure that we are any closer to knowing what actually is their policy. One thing, however, is clear: the soap opera of the past week has shown that the Prime Minister’s shambolic, “make it up as you go along” approach to energy policy has failed, and will do nothing to help hard-pressed consumers struggling with rising bills this winter.

As my hon. Friend the Member for Wansbeck (Ian Lavery) said, the Government are in disarray over energy. Even the Liberal Democrats did not know what the coalition’s policy was, and during last Thursday’s urgent question, the hon. Member for St Ives (Andrew George) was reduced to asking the Energy Minister:

“Do I understand from his reply…that this is not a firm policy proposal, but merely an item that is currently under consideration?”—[Official Report, 18 October 2012; Vol. 551, c. 490.]

Since that urgent question, neither the Secretary of State nor any Back-Bench Member of the coalition has defended the Prime Minister’s policy announcement that he made last week during Prime Minister’s questions.

Despite the confusion on the Government Benches, we have heard a number of excellent speeches this afternoon. In his response, will the Minister address the serious points raised by a number of Members about the circulating rumours that the UK is set to lose out on up to €600 million for CCS because the Chancellor has blocked the match funding?

Members have rightly highlighted the public’s concern about increased energy prices and the urgent need for Government action to curb those prices. As my hon. Friends the Members for Luton South (Gavin Shuker) and for Islwyn (Chris Evans) said, it is a whole year since the Government’s infamous energy summit. The situation for all our constituents has got worse not better, and it is set to get even worse.

As the hon. Member for Nuneaton (Mr Jones) said, we have a cost-of-living crisis. My hon. Friend the Member for Wansbeck reminded the House that in the two years since the Government were elected, energy bills have risen by £200, with the average household now paying more than £1,300 for their dual fuel bill. That was before we heard last week that three of the big energy companies are imposing another round of price hikes, adding a further £100 to people’s bills this winter.

Some 850,000 people are already in debt to their energy companies. My hon. Friends the Members for Glasgow North West (John Robertson) and for Islwyn highlighted in their contributions the shocking prices and conditions that many of their constituents will face this winter. A constituent has e-mailed to tell me that their energy company wrote to them last week to say that their bills will rise by 14.1% for gas and 16.1% for electricity this winter. Faced with those huge increases, it is no wonder the public cannot understand why the Government are not doing anything to help them.

Millions are suffering in fuel poverty, as my hon. Friend the Member for Brent North (Barry Gardiner) and my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) said. On this Government’s watch, the number of households spending 10% or more of their disposable income on electricity and gas has increased to one in four—a staggering figure. As my hon. Friend the Member for Wansbeck exposed, that is 5.7 million people. As my hon. Friend the Member for Glasgow North East (Mr Bain) said, 3 million pensioners are in fuel poverty.

What about when people try to switch? The hon. Member for North Swindon (Justin Tomlinson) rightly drew the House’s attention to a recent investigation by Which? showing that a staggering 44% of consumers who called their energy supplier to find out the best deal were not offered it.

In his opening remarks, the Secretary of State mentioned the record of the Labour Government—I am delighted he wanted to talk about the Labour Government, because I am proud of our record. We lifted 1.75 million people out of fuel poverty; an average of 200,000 every year were helped under Warm Front; and 6 million homes were insulated thanks to obligations placed on energy companies. We had the decent homes standard, winter fuel payments and the world’s first climate change legislation.

What have we had from this Government? We have had an energy summit that was nothing more than a photo-op, and a check, switch and insulate campaign that led to fewer people switching suppliers. The number of people getting help through Warm Front, which the Government are scrapping, is down by 80%. We have had an energy efficiency scheme—the green deal—but the Secretary of State’s Department predicts that it will lead to an 83% reduction in the number of people getting loft and cavity wall insulation.

A number of hon. Members, including the hon. Member for Tiverton and Honiton (Neil Parish), made representations on how the golden rule does not stack up. From next year, support for fuel-poor, low-income vulnerable households will halve, with no Treasury-funded scheme to help the fuel-poor for the first time since the 1970s. I do not know about the Secretary of State, but I would rather have Labour’s record than his. Every day the public are paying the price of his incompetence through higher and higher energy bills. It simply is not good enough.

In her opening speech, my right hon. Friend the Member for Don Valley (Caroline Flint) laid out very clearly the problems of how our energy market works. There is a lack of competition, with six companies supplying 99% of homes, squeezing out new entrants. We have some of the highest pre-tax energy prices in Europe. The Secretary of State went to great lengths to talk about switching, but on his Government’s watch, the number of people switching supplier is the lowest on record. Bills shoot up when wholesale costs rise, but they never seem to come down when energy prices fall.

No one is saying that the energy market is not complicated, or that changing it is easy. Difficult questions need answering. How do we move from a high-carbon, high-cost economy to a low-carbon, low-cost one? How can we meet our climate change obligations while keeping the lights on? How can we help those who are off-grid as much as those who are on-grid? A number of hon. Members made representations to that effect.

Those are fundamental challenges for the future of our country, but because of the scale of the challenges, we need to raise our ambitions and not lower them. It is not good enough for the Government to stand aside and tell people, “You’re on your own.” The public need a Government who will face these problems head on, not simply accept business as usual, yet all they offer is more of the same.

Despite the Government’s claims to the contrary, the Energy Bill contains nothing fundamentally to change our energy market, nothing to help people who cannot afford to stay warm this winter, nothing to change how power is bought and sold, nothing to support co-operatives or community energy schemes and nothing to make the market more competitive or more transparent. What is needed is proper market reform, not an acceptance of the status quo. Our motion offers real change.

Today’s debate has shown a clear choice between a shambolic, out-of-touch Government making policy on the hoof and lurching from one disaster to the next, a Government whose only answer to rising bills is to tell people they are on their own, and a Labour party that would provide help now for people struggling to keep warm and have the determination to take on the big energy companies and make the market simpler and more responsible. That is the choice hon. Members face when they vote today. I commend the motion to the House.