Energy Markets Competition Assessment

Mark Lazarowicz Excerpts

Thursday 27th March 2014 Commons Chamber

[Mr Davey]

It is always nice to be able to agree with my hon. Friend on the odd occasion—[Interruption.] Not necessarily on everything he said—the right hon. Member for Don Valley (Caroline Flint) is very worried about that—but on his point about the Labour party and competition, I do agree.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

One of the headline findings of the market assessment in the Ofgem press release is that switching has fallen in recent years:

“There was a brief spike in late 2013 but no indication of a permanent increase.”

Indeed, there has been a substantial reduction since January this year. Given that switching has so far not really had the effect in driving down prices that the Secretary of State suggested it might, why should we expect consumers to wait for two years for the outcome of this assessment to see some action being taken to drive down prices?

[Mr Davey]

I am glad the hon. Gentleman has raised that point. Switching rates have fallen in this country primarily because of the end of doorstep selling. That method of trying to persuade people to switch was one of the reasons why switching numbers increased in the early days after privatisation. However, all Members in their constituencies will have experienced cases of doorstep mis-selling, and it was the many problems that that caused that led many people in this House and the regulator to say that it was not an acceptable way of driving competition. Doorstep selling has gone out of the picture and that has been the main cause of the reduction in switching. We have therefore had to address that and look at new, innovative ways to try to get the rate of switching going back in the right direction. That is why we are looking at simpler bills, fewer tariffs, collective switching and faster switching times. We are relentless in trying to get those switching rates back up again, and the recent evidence suggests we are on the right track.