Energy Prices

Debate between Luciana Berger and Thérèse Coffey

Wednesday 19th October 2011 Commons Chamber

[Luciana Berger]

The point of the debate is that we are trying to get action from the Government now, this winter. We have not seen anything from the Government that will help my constituents and those of all hon. Members. Anyway, as I shall say later, we are very grateful for the Government’s support for our motion.

First, we believe that we need an immediate investigation into mis-selling by energy companies and compensation for consumers who have been ripped off. For too many years, cold-call doorstep sales have led to hundreds of thousands of people paying more for their energy after switching to a worse deal. As I said only a moment ago, the news that four of the big six have ended that abusive practice is welcome, but questions remain about selling methods. We want an immediate investigation with proper sanctions to restore trust. The Secretary of State said before that there will be compensation for anyone ripped off in the future, but we are concerned about the thousands of people who have already been affected.

Secondly, the energy companies should use their ballooning profits to help families and businesses struggling to make ends meet by cutting their bills now. Last week, Ofgem published research showing that the average dual fuel bill is now a mammoth £1,345 per household, but at the same time energy companies have seen their profits soar, with their margin now standing at a whopping £125 per customer, up £110 in just four months. It is wrong that energy companies are raising their profits by 700% when consumers are being told that bill increases are unavoidable.

Thirdly, the Opposition believe that we need transparency, meaning that companies need to be clear and open about how much it costs them to buy their energy. Only then can customers be clear that they are getting a fair deal.

Fourthly, we want simple tariffs. We need tariffs that are fair to consumers, but that are also easy to understand and compare. Something is wrong when 70% of consumers say that they find the number of tariffs on offer confusing. A daily standing charge covering the cost of delivering energy to people’s houses and a unit price so that people can see clearly how much they are paying would mean an end to confusing charges, making it easier for them to compare suppliers’ prices properly.

Finally and most importantly, we need reform of our energy market, which for too long has been dominated by a handful of companies. At one time that seemed to be working, but no longer. It is clear that those vested interests are looking after themselves handsomely, while their customers struggle. As Ofgem has shown, and as many Members said this afternoon, as soon as the wholesale price goes up, so do people’s bills; but when wholesale prices come down, bills do not follow.

The market is broken and we need to fix it. We want all generators to sell all their power on a long-term market to any supplier. By reforming the market in that way and by opening it up, new entrants can join, increasing competition and lowering bills.

We also need action on securing our future energy supply, which means taking tough decisions now. Investing in low-carbon energy generation will create thousands of new jobs and drive our economy. However, under this Government, sadly, we are going backwards.

[Dr Thérèse Coffey]

I hear a lot of talk about the energy companies and recognise that we want to be critical friends. Does the hon. Lady think that they are producers or predators?

[Luciana Berger]

The point is that we want responsible business, which is what this debate is all about.

The challenge currently is that the Government are creating uncertainty for investors by playing political games with climate change. The Opposition do not believe that that will grow our economy. Talking down the green economy might sound good to a Conservative party conference, but what does it say to the companies that want to put their money behind carbon capture and storage or those that want to invest in renewables? What does it say to the small business owner who is thinking of providing energy-efficient goods or the manufacturer that is planning to build parts for a new generation of wind farms or solar panels? To them, talking down the green economy says: “Think again.”

We have a choice: we can be a leader or a follower. The jobs, investment and prosperity can come here, or they can go elsewhere. We want Britain to be a world leader, but for that to happen, we need a Government who get it. We have seen today that this Government do not get it.

For households in the squeezed middle, for vulnerable people and for millions of small businesses who need lower bills, now is the time to take action. Now is the time to make pricing transparent, to simplify tariffs, to tackle mis-selling, to demand that the energy companies use their profits to help to reduce energy bills this winter, and to reform the energy market. I urge hon. Members to take that action today, and I am delighted that the House supports Labour’s motion.