North Sea Oil and Gas (Employment)
Debate between Mike Weir and John Robertson(9 years, 10 months ago)
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Mr Weir
I have already referred to that; the hon. Gentleman should listen a bit more carefully. I did mention the First Minister’s announcement about what the Scottish Government were doing.
The Scottish Government have endorsed the findings of Sir Ian Wood’s review on maximising recovery on the UK continental shelf and particularly his recommendation of a stronger, more effective regulatory body, and so, too, did the UK Government. We welcomed the long-awaited announcement of the appointment of the OGA’s chief executive. However, it is imperative that progress is much quicker so that we can start to reap the benefits that an effective, well resourced authority has the potential to bring the industry and the nation.
John Robertson
Has the hon. Gentleman taken into consideration the fact that the Saudi Arabians and the Russians have enormous resources in this field, which we are trying to maintain? If they wish to keep undercutting us, the policy he outlines will become useless.
Mr Weir
In a way, I am surprised by that comment from the hon. Gentleman, because it seems to be a counsel of despair. We must do what we can to keep our industry going. Unfortunately, we cannot influence what the Saudis or anybody else do with their oil prices. As far as we can, however, we must take the action necessary in the UK to make sure that the North sea industry, and particularly the employment that it provides, survives.
Even if the Saudis do try to do what the hon. Gentleman says, they cannot do it for ever. At some point, oil prices will start to come up again; indeed, the International Energy Agency has predicted—obviously, this is only a prediction—that the price will probably return to about $80 a barrel in the current year. We will have to wait and see whether that happens and, if so, how fast.
The OGA is particularly important, given the pressures being felt by the industry. The Scottish Government were pleased to see Aberdeen confirmed as the location for the OGA’s headquarters in June, and the suggestion that there will be an increase from 59 to 145 full-time equivalent staff by 2019 is welcome, because it might help to address the serious understaffing identified in Sir Ian Wood’s review.
The challenge is to ensure that the appropriate level of expertise and knowledge is secured, but it is critical, given present circumstances, that appropriate resourcing is put in place swiftly at the new OGA, with the correct level of industry experience and expertise. Industry is clearly concerned about delays in the process. As Malcolm Webb, the head of Oil & Gas UK, has pointed out, it looks as if it will take until summer 2016 before all the processes involved in setting up the OGA are completed. I agree that that is far too long, and I would appreciate an explanation from the Minister of why the process is taking so long and what action will be taken to speed it up.
The Wood review must be implemented effectively and with increased speed and resources, in the light of the growing challenges facing the industry. On the website Energy Voice, on 6 January, Malcolm Webb said:
“Years of confused and confusing energy policy, not helped by a revolving door approach to the appointment of ministers (we’ve seen a total of 35 different Energy and Treasury Ministers given responsibility for our industry in the last 14 years), have raised serious questions about our politicians’ awareness and understanding of this industry and its vital importance to the UK economy.”
I agree, and the UK Government need to take urgent action to assist the industry at this difficult time.
Energy Price Freeze
Debate between Mike Weir and John Robertson(10 years, 7 months ago)
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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.
Government Levies on Energy Bills
Debate between Mike Weir and John Robertson
John Robertson (Glasgow North West) (Lab)
It is a pleasure to follow the hon. Member for South Suffolk (Mr Yeo). He does an excellent job as Chair of the Energy and Climate Change Committee and it is a pleasure to be a member of it.
My great fear is that we are losing sight of climate change. With the country in austerity, people see cheap fossil fuel as an answer to their prayers as they try to keep costs down. However, climate change causes long-term damage, as we have seen with the recent floods, which are more than a little unusual. Some of us believe that that is down to climate change in at least a small way, if not in a large way.
The levies are important. About 50% of the cost goes to pensioners and those on low incomes who need help from schemes such as the warm home discount. The rest goes towards increasing investment in new plants, in the hope that there will be affordable energy in the long run. I have often taken part in debates on these matters and I make no apology for wanting to look after those in society who have the least and who need the most help.
The explanation of the levy control framework by Her Majesty’s Treasury states that its aim is to ensure that the
“fuel poverty, energy and climate change goals”
are met
“in a way that is consistent with economic recovery and minimising the impact on consumer bills.”
I think all Members of the House would agree with that, but sadly it does not happen.
The National Audit Office says that the levy control board has
“focused on cost control and not the associated impacts on energy policy outcomes.”
It is looking at only one half of the equation. We need to look at the impact of the levies on consumers’ bills, whether it is as high as the energy companies say it is or not. However, we can see their worth only if we know what the impact is. The Department of Energy and Climate Change says that its energy and climate change policies will reduce bills by about 11% or £166 by 2020. How can we know if that is the case if we do not know what the impact of the policies will be? We need to be sure about the impact on people’s energy bills.
There are recommendations in the Select Committee’s report that would make the information on that clearer. For example, it recommends:
“Easily identifiable ‘costs per customer’ for each scheme on a consistent basis across years and between reports”.
Clear reporting on how levies are be raised and spent is particularly important because the levy control framework limit will increase from £3.184 billion in 2013-14 to £7.6 billion by 2020-21. Some 83% of people are worried about energy prices, so it is important to ensure that we do not contribute to the increase in prices.
Mr Weir
The hon. Gentleman is making a very good point. Is it not also important that it is made clear exactly what the impact of a levy is on individual bills? We are often told that green levies are pushing up bills, but the renewables obligation actually makes up a relatively small part of the average dual fuel bill.
John Robertson
The hon. Gentleman makes a very good point. I have always felt that the amount of information that goes out to the ordinary person in the street when he opens his gas and electricity bill is either too complicated for him to understand or too simple and does not provide enough information. The Government have to ensure that people are educated. I am not talking only about the education of the general public, but about the education of the energy companies. They need to understand exactly what their job is in relation to customers. Yes, they are there to make money and to deliver electricity and gas, but they forget that they are dealing with real people—real people’s lives and jobs.
There has to be stronger control of the companies. If we are to take money through the levies, we need to ensure that it is spent properly and, to go back to the Treasury’s statement, that it is used to look after people in fuel poverty. We need to make it easier to show that the energy companies are trying to pull the wool over our eyes.
Mr Weir
It is not my example; I refer the hon. Gentleman to the House of Commons Library note on this subject, which sets out clearly the various elements, as I do not have it with me today. Obviously, energy companies will make a profit, and part of the taxation on energy bills is 5% VAT. The point about the 8% and the 2% is that only 2% of the bill is directly relatable to the renewables obligation. The differences between the two are the social obligations—the insulation costs and the other costs for creating warmer homes and reducing future energy bills.
It will be interesting to see how these changes feed into energy costs. If, as is claimed, the major companies are operating a hedging strategy for gas that forces them to buy well in advance, there should be little immediate effect—I am referring to the current rise in prices because of what is happening in Crimea. But those who buy the bulk of their supplies on the spot market may well see an immediate impact. It will be interesting to see whether there is a turnaround in who has the higher energy prices as a result of that.
A further major element in bills is the network costs charged to energy suppliers, which, according to the note, make up 20% to 23% of the costs. I have spoken on that issue many times in this House, as well as on the unfairness of the costs, which discriminate against generators, particularly renewable energy generators in the north of Scotland compared with major generators in the south. The regulator, Ofgem, has been looking into this matter, in a seemingly endless investigation, Project TransmiT, which I understand has been put back yet again to a possible introduction in April of next year. There must be more action and a fairer system of transmission reduces the costs faced by renewable energy. That would have a positive impact on bills by reducing the cost to the consumer.
All that having been said, we do need to look at the balance between investment and the price paid by consumers. I support the idea that some of the costs that have been imposed upon consumers are taken off bills and put on general taxation, specifically those relating to providing energy efficiency and insulation measures. It is not often I agree with the Minister, but that was correct.
Mr Weir
The hon. Gentleman need not worry too much.
Under the green deal, many measures under the energy company obligation are left to the energy companies to set up and administer, but that is not working. I have raised concerns about aspects of the specific schemes, but the overriding fact is that there is now a complete lack of trust in the energy companies and having them approach people offering such schemes will not achieve the take-up we need. Suspicion alone will stop many people taking up what could be a good scheme. We should be made to examine how we deliver these things, because if we were to have a more focused scheme, we could do more, for example, in hard-to-heat homes in the areas mentioned by the hon. Member for Truro and Falmouth, by making sure that these specific issues are tackled.
I have raised other issues relating to the ECO, one of which may interest the hon. Lady, who, like me has many constituents who are off the gas grid: many energy companies will not have replacement boilers for off-gas-grid appliances. I have written to all the major companies to press them on the issue. I have raised it at ministerial round-table meetings—I am sure that the Minister is fed up with hearing about it—and in the House, but the situation remains. We really need action on such areas. We were told by Ministers that the ECO was technology-neutral, but that is clearly not so for off-grid consumers.
The Government’s usual mantra of energy efficiency and switching simply does not wash with those who are struggling to pay their bills. The savings on offer would barely scratch the surface of the problem. All too often, energy companies seem to be carrying out a follow-my-lead strategy on price rises. If someone switches when their company raises prices, they may just be delaying their own price rise until the next company makes its move. It is not surprising that cynicism has taken hold among the general public. We must make it clear to our constituents that there is no silver bullet to solve the problem of energy prices. Yes, we need to look closely at how the energy companies operate, which the hon. Member for Glasgow North West has talked about on many occasions. In fact, that is one of the things on which we agree.
We need transparency in the system to see not only how the companies make their money but the inequalities. In the Energy Act 2013, the Government sought to take powers to implement the Prime Minister’s promise to put everyone on the lowest tariff, but, as I have said many times, the Act does not seem to have that effect. What it does is to require the energy companies to facilitate the switch, but the offer to do that may well not be obvious to many people who receive a mass of paper through their doors from the energy companies. There must be a much more proactive effort to put people on to the lowest tariff. It also seems that, under this scheme, it is only the lowest tariff operated within the type of contract the person already has. As I have said before, that is fine if someone is on a direct debit tariff, but if they are on a prepayment meter, for example, they will still be stuck on a higher tariff, and there is little being done to help those people.
If we are to explain clearly what the costs of energy are and to do what we can to reduce energy bills, we need to ensure that everyone is on the lowest possible bill. We need to get away from the fact that companies can claim that bills are the result of green levies or other levies, when clearly that is not the case.
I have spoken a great deal about prepayment meters before, and I will not do so again any great length again. However, I will just say that the citizens advice bureau in Scotland cites the case of a single parent with two children. The mother currently has to lose £7 to arrears every time she puts £10 in the meter. The £3 remaining is entirely insufficient to heat her home. Such things cannot be allowed to continue if we are serious about bringing the public on board. They must understand that we are serious about not only ensuring that the infrastructure is in place and that we move towards green energy, but about doing what we can to reduce energy bills.
I have also spoken before about the fact that some people who have prepayment meters or who are in arrears often do not have bank accounts. The banks are not interested in the low-income customers. Indeed many of them have moved out of areas such as the rural parts of my constituency.
The hon. Member for Truro and Falmouth mentioned off-grid customers, so I will give another plug for my favourite campaign for earlier winter fuel allowances for elderly people who are off the gas grid. I am pleased to see that the Labour party has now adopted that as policy. I have been campaigning for it for some time, and I am glad to have its support for that policy. It is interesting to note that both major parties have supported that at one time or another. Strangely enough, they have done so when they have been in opposition, not in government—call me a cynic, but there we go. We will wait and see.
All too often when we debate energy, we focus on electricity consumers. We must look at the whole system, and I am glad that we have the opportunity to do so today. I think that I have spoken for long enough, and I will end by saying that this is a good opportunity to make the point that we should not just look at green levies. There is a reason we have this ongoing system: to decarbonise our energy and ensure that bills stay low in future.
Post Office Services
Debate between Mike Weir and John Robertson(10 years, 10 months ago)
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John Robertson (Glasgow North West) (Lab)
I thank the speakers in the previous debate for giving me some extra time for this important debate. We have had many debates on post office services, and there will continue to be more unless we manage to solve the problems of the Post Office.
Post offices play a significant role in all our communities—80% of people in Scotland say that post offices play an important role in the local community. They act as a vital service and should be seen as community hubs. Sadly, rather than nurturing those community beacons, the Government have done a lot to undermine the network and decrease the services that it provides.
There are about 11,800 post offices in the UK and customers rely heavily on them, especially the most vulnerable in our society—the elderly, those on low incomes and the disabled. The universal service obligation and other services are so ingrained in our society that I fear the loss of them. For example, 43% of elderly people use a post office to access cash. People take it for granted that they can walk into a post office and deliver items within the UK and across the world. We need to act now to keep the Post Office thriving, otherwise we might be at risk of losing that vital institution.
The announcement by the hon. Member for East Dunbartonshire (Jo Swinson) in November that additional funding had been allocated to complete the network transformation programme was a vote of no confidence. If the Government had delivered on the front office for Government work that had been promised, which I shall speak more about later, that £640 million would not be needed.
Mr Mike Weir (Angus) (SNP)
Does the hon. Gentleman share my concern that the transformation programme is working against many small post offices? In particular, the Post Office appears to be targeting some offices and persuading the postmaster to retire so that it can move into a local shop and downgrade the service.
John Robertson
The hon. Gentleman is right, and I shall come on to some of those points as we move on. There is no doubt that larger post offices—and even sub-post offices, for that matter—are shutting. When I spoke at a conference for sub-postmasters from Glasgow and Ayrshire, they let me know exactly how they felt about the Government’s position, and, for that matter, that of the previous Government. At least they were there to help and they offered some examples that I will mention later.
Although the Government will have spent around £2 billion on network transformation, we still will not have an attractive model for current or future operators. The money will have been used to subsidise exit from the network, as the hon. Member for Angus (Mr Weir) said, rather than to make the network sustainable in the long term. That is of great concern to the many people who rely on post offices. We should be looking at making the Post Office better, rather than, as I suspect, making it ready for privatisation.
The sale of Royal Mail was of course resisted by the Opposition. Last week’s news that its share price was £5.67—£2.37 above the Government’s offer price, which raised just £3.3 billion—was disappointing. It was an ideological move, not a financially sensible or thought-through one. The separation of the Post Office and Royal Mail has added millions of pounds in costs to the Post Office owing to loss of synergies. No other postal administration in a developed economy has separate letters and retail businesses.
The sale has now been done, but we must still consider Royal Mail in our strategy for the future of the Post Office. Just under 40% of Post Office revenues come from mail, so it is a significant part of the business. I was glad that, in January 2012, the Government caved into pressure and signed the 10-year inter-business agreement between Royal Mail and the Post Office, but there is no guarantee beyond 2022. The position is also not secure for the next 10 years, as the Minister’s own Department has said that the contract allows for changes in commercial circumstances and contains provision for a review of the agreement terms after five years. The 10-year agreement would therefore appear to be for only five years, but hopefully the next Government will be of a different colour and will put right some of these short-term ideological decisions.
It is a real concern that Royal Mail might not continue to support the post office network. The loss of that contract would seriously undermine the Post Office’s integrity as a mail delivery service. Were that to happen, people would lose confidence in the institution and the future of many post offices would be at risk, especially the largely loss-making ones in rural areas, such as the one represented by the hon. Member for Angus. Privatisation is a risk to Post Office services and we need more guarantees for the decades to come.
A post office is a place where people can go to fill in government forms or to pay for government services. It is important for both customers and employees that the Government continue to give the Post Office sufficient work. This Government announced in 2010 that post offices would become the “Front Office for Government”, but actions speak louder than words. They promised to give post offices £466 million of Government work, but post offices are currently gaining only £130 million from Government business.
I am sure that the Minister will say that the Post Office has won all the government contracts it has bid for, but those were contracts it already had, not new ones. No new major services have been awarded to post offices, and the National Federation of SubPostmasters has stated that the few that have been introduced are for one-off transactions that are available in only a small number of post offices. Dangerous precedents have been set by not awarding government contracts, and the future of the Post Office is in jeopardy as a result.
Linked to that, we need to ensure that post offices are not disadvantaged compared with other methods of using government services. For example, if I wanted to pay my road tax online, I could bring up all the details—whether my car had its MOT and insurance, for example—via an online portal. I would not need to go looking for documents, as the information would already be on the system. However, until very recently, post offices could check only a car’s MOT, so people would have to bring in their insurance documents. It is clear that those who could choose to use the internet over having that inconvenience would do so. After all, who wants to have to carry around their documentation to ensure that they get their road tax? Thankfully, in this case, somebody has seen sense, so post offices can now check insurance as well, but the internet was well ahead on that, and that should be a lesson for future online services. Post offices do not need to have an advantage—in fact, sub-postmasters tell me that they do not want it—but they should have at least a level playing field. People should be able to use the post office to access Government services with the same ease as on the internet. The decision not to award the green giro contract to the Post Office was another example of how the future of the institution—
Energy Bill
Debate between Mike Weir and John Robertson
Mr Weir
I accept that, and I understand what the Minister is saying, but he said in his speech that the maximum penalty to date had been £15 million. Under the Bill he is talking about £1 billion. There is a massive difference between the two and my point stands: if consumers have been ripped off, it does not matter whether it happened just before the new system was introduced or just after that. The same should apply, in my view, and I do not have any great problem with that proposal.
However, I have a big problem with amendments 3, 4, 6 and 7. As I said in an intervention on the hon. Member for Liverpool, Wavertree (Luciana Berger), I have a worry—the same sort of worry as the Minister—about the effect that the amendments would have on the company. It seems that one aspect of the Bill is about trying to get investment into the energy industry. For far too long there has been insufficient investment; a lot of modernisation and new investment is needed to get our energy system up to scratch. The figure is 10% of the turnover, whatever that turnover will be—I am still not clear what the word covers. That takes me back to the days when I served on the Select Committee on Energy and Climate Change with my hon. Friend the Member for Glasgow North West and we had the big six in one day and asked them about their profits. We asked whether they had made their profits selling to the consumer and they replied, “Oh no, we didn’t do that.” We asked whether they made them through generation, and heard, “Oh no, we didn’t make it from that.” We asked, “Where did you make those profits? You have large profits,” and no one could answer the question. There is great difficulty in pinning down what is meant by profit and turnover. In a time when we have six big energy companies, five of which are effectively multinational companies—we have seen in recent weeks what happens with the tax of multinational companies—we need a bit more clarity about what is meant by turnover.
Although the sums involved in 10% of turnover are significant, my bigger worry is that a company could be under investigation for an alleged breach for a considerable time. If there is a set limit, whether it is 10%, 20% or whatever, anyone thinking of lending that company money for infrastructure projects—most of them borrow from large financial institutions or other lenders—will know the contingent liability and what they are dealing with. I grant that if the liability is absolutely unlimited the sums involved are unlikely greatly to affect the big companies, given their size, but the uncertainty might well affect them. As we all know, those lending sums of money of such magnitude will consider the state of the company. A potential unlimited liability going into many billions of pounds, if there has been such an incident, could seriously undermine the company’s ability to borrow the money for much-needed infrastructure in our energy supply system.
I have a great deal of sympathy with those four amendments and understand what the hon. Member for Liverpool, Wavertree is trying to do, but I have a difficulty with them. Perhaps when she winds up she could expand on them and reassure me on the points I have made.
We must also remember that the provision would affect not only the big six energy companies but all regulated persons. If I understand correctly, that would include the small companies that are trying to get into the market. The Government say that they want to bring new entrants into the market, including the smaller companies that are beginning to nibble away at the edges of the big companies. If they were faced with such a penalty—let us hope that none of them would be—it would be the death knell for them.
John Robertson
The hon. Gentleman makes a very good argument and I had not thought of going down that road. Does he accept that those small companies could, through no fault of their own, follow what the large companies are doing and get themselves into bother that they did not really think about when they first started doing whatever it was that they did?
Mr Weir
My hon. Friend makes an excellent point. Whereas the big six would be able to take that financial hit, many of the smaller companies would not be able to do so. These proposals would take us down a road that could have serious repercussions. Many small companies are beginning to break into the market. Many of them are particularly strong in renewables, for example, and that is one way in which much of our renewables investment might be generated in the future.
I ask the shadow Minister to think about my points. I have sympathy with the amendments and understand what they want to do. We all want to ensure that any energy company that has been mistreating consumers is dealt with severely. There are two sides to this, however, so let us not rush into doing something that could have profound and unforeseen results.
John Robertson
It is a pleasure to follow the hon. Member for Angus (Mr Weir). He was an excellent member of the Energy and Climate Change Committee when it was first put together and I am very sorry that he is not still a part of it—but there is time for him yet, as they say.
I agree with a lot of what the Minister said—I do not pick holes in things just for the sake of it—but it is not my place to worry about whether the big six have financial difficulties or whatever else. Personally, I could not give one jot about any of those companies. They are big enough to look after themselves and they certainly know the rules, because they know how to break them and get away with it.
I support every one of the amendments tabled by my colleagues on the Front Bench. I have no problems with them whatsoever. The only thing I have to say to the Minister is that I was slightly disappointed by his speech. He talked about hard-working families and, yes, I believe that hard-working families should always be looked at and looked after as best we can. My constituency has more than its fair share of elderly people and it has the highest percentage of single women in any constituency in the country, which probably means that most of them will be elderly. That means that they might have some difficulties that other people do not have. There are also quite a number of people who are disabled. We have found over the years that those are the people who do not complain, because they are frightened to, and who do not get the help they probably should get. Once again, we are getting to a stage when people think that their biggest bill is their electricity bill, their gas bill or both. According to some newspaper articles, people will be more worried about how they pay their fuel bills than how they pay their mortgage.
I do not worry about the big six, because they are making plenty of money, but we have to nail down what we mean by profit and turnover. Let us take EDF, a large multinational company that is to build a new nuclear power station, from which it will make a lot of money. It also has other power stations in the United Kingdom on which it makes money, and of course it is involved in retail as well, where it says it makes 2% profit. It makes some 17% to 19% profit from generation. It puts that 19% alongside the 2% when it comes to giving shareholders a dividend, but it tells Government that it is making only 2% profit. The company may therefore put up its prices—SSE did so only last October—yet these same companies are making enormous profits. They are telling people, “Invest in our company because you can get a return for your money.” That is not right.
Energy Market Reform
Debate between Mike Weir and John Robertson(12 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
John Robertson (Glasgow North West) (Lab)
The Secretary of State is very good with a brief in front of him but very poor when he comes before the Select Committee, where he has to answer questions. He beats around the bush and never answers a question, and I congratulate him once again on doing the same thing.
I congratulate my right hon. Friend the Member for Don Valley (Caroline Flint) on her motion, although we would probably disagree on a couple of things.
A month or so ago I introduced a ten-minute rule Bill on prepayment meters that would change the amount of debt that customers build up from £200 to £350 and give 200,000 people the opportunity to reduce their debt. Since then, Ofgem has announced that it wants the limit to be increased to £500, taking 400,000 people out of debt. I congratulate Ofgem on not only listening to me but going further than even I had suggested—I cannot have a go at it about that. I also worry about the 68 people it employs in Glasgow and, of course, the 722 staff in London who do the best they can with the rules they are given.
Ofgem and many other regulators such as Ofcom were introduced at a time when we wanted light regulation. That was a particular request shouted by those on the Opposition Benches while we were in government and we gave them that, but unfortunately times change. We are in a double-dip recession and things are harder. Many people in my constituency worry about whether they will be able to pay their bills this winter. The Secretary of State talked about helping people with energy efficiency, but how can we offer someone who lives in a multi-storey concrete block energy efficiency when they spend the summer cooling down the concrete walls and the winter heating them up? How can they have energy efficiency? They cannot. Those people do not have computers; they cannot switch providers.
I wrote to the energy companies three weeks ago and asked them to outline how they identify vulnerable people and what they do to try to help them. I have had three replies and three companies—E.ON, EDF and SSE—have not bothered to reply. They might not have quite got round to it or they might have been too busy counting money, but I want to know how they identify vulnerable people and, more importantly, how we can reach those people. No energy company has ever come to me to ask where I think the vulnerable people are in my constituency. I think I probably know better than those companies what happens in my constituency, given that I have lived there nearly all my life, yet they will not talk to me about these matters.
I asked about the cheapest tariffs—perhaps the Secretary of State could try this for his own house. People wanted to talk to me about that—not because I was a member of the public but because I was an MP, so they thought that the companies would give me some attention—but even they could not tell me the cheapest tariff. If they cannot tell me what the cheapest tariff is, what are they telling people outside this place?
The Secretary of State talked about four tariffs. If I pay by direct debit, will I get a lower bill? Yes. We have now doubled the four tariffs to eight. If I pay by cheque, will it be cheaper than a payment by standing order? Before we know it, there will be 20 or 30 tariffs rather than four. It is ridiculous, however, that we have 400 tariffs, and I raised that question in my Select Committee when the previous Government were in power.
Mr Mike Weir (Angus) (SNP)
Is it not also a problem when we try to compare different tariffs from different companies, as they are not always trying to sell the same thing? We need identical tariffs—perhaps four of them—across the companies because otherwise it is meaningless.
John Robertson
The hon. Gentleman is absolutely right, but I would go even further. I met Which? this morning and its representatives said that they wanted energy to be like petrol and diesel. We are given a price for petrol and diesel and we know how much we are paying per litre; Which? wants to do the same for units of energy. Different companies can charge different prices. I do not have a problem with companies making a profit, but if they make an obscene profit I expect the next Labour Government to consider a windfall tax. We let these companies run as businesses and we want them to act responsibly, but if they make obscene profits on the backs of people, particularly poor people, I would expect my Government to consider that and to tax them accordingly.
I have to agree with the Secretary of State on the question of the over-75s. I would bring the minimum age down to the retirement age. As the retirement age is going up, 75 might not be off the mark in a few years’ time, but at the moment it is 67. If I retire, I will be 65, fortunately, so it would be nice if that age limit was 65.
That takes us back to vulnerable people. There are many single parents and disabled people, and we forget about them at our peril because they sometimes need more help than the elderly. As we move towards becoming the next Labour Government and proposing our own energy Bill, we need to consider these matters as they are very important.
In Prime Minister’s questions today, the Prime Minister was asked about his previous statement on tariffs. As I said earlier, no one really knows what those tariffs are. The Department of Energy and Climate Change told our Select Committee that it could not intervene and that it was down to the companies, but now it says it can intervene.
The regulator is, unfortunately, very poor at delivering. It is not that it does not want to do the right thing—it does—but the Government set the agenda for Ofgem. If the direction is poor and the regulator is not given the power to impose fines—[Interruption.] If the Secretary of State listened for a second, he might learn something.
There is an imbalance in how the generating companies spread energy about the country and it seems to be a bit of a rip-off. We pay the companies to shift electricity from one side of the country to another and it costs the taxpayer more than £340 million. It used to cost only £35 million, but it is now closer to £350 million, so why have the Government and Ofgem, who know that that fiddle goes on, not taken any of those companies to court to try to get the money back? I am told that one of the worst areas for that double dealing is the Cheviot hills, which are only about 20 miles from my house.
If wind farms are part of the problem and are being paid to close down, there is something wrong with our energy policy in this country. We need to look at that. I believe that Ofgem does a reasonable job but could do better and a reorganisation would be the best way forward, as we cannot reinvent the wheel once we have it. The Secretary of State also needs to get on top of his job and portfolio so that he can help people as he is supposed to, rather than engaging in stupid political point scoring from the Dispatch Box.
Mr Mike Weir (Angus) (SNP)
I have no great problem with the motion moved by the right hon. Member for Don Valley (Caroline Flint). I might even vote for it—despite the fact that she would not take any of my interventions. I would, however, like to comment on one aspect. The motion is headed “Energy Market Reform”. In fact, both Front-Bench spokesmen entirely concentrated—apart from one brief mention from the right hon. Lady—on the big six in the electricity and the gas markets. As often happens in these debates, they totally failed to address the problem of those who are off the gas grid. To their credit, this Government brought forward the Office of Fair Trading review of the energy market. To almost universal disbelief, however, it was decided that the market was working fairly.
The Secretary of State spent a good deal of time talking about competition and how he was going to introduce it; again, this seemed to be focused on the electricity and gas markets. However, those who are off the grid have faced some of the highest price rises over the past year. The OFT said that that market was working okay because there were plenty of suppliers in it. I should like to think that that there are plenty of suppliers, because many of them are connected with each other, but does that not illustrate the difficulty of dealing with the issue if we rely on competition? Competition has failed in that market, and, indeed, in the bigger market as well.
There has been much talk about switching. There are several problems with that. For instance, when one of the energy companies puts up its prices, there is a follow-my-leader process: over the next month or two, the rest start to follow suit. People who have switched have found themselves in a worse position, because although the company to which they switched was giving a better deal at first, suddenly it is not a better deal any more.
The Secretary of State spoke said that the community base must include the fuel-poor. That is true, because they are the only people who will really benefit from switching. When I joined the Which? campaign, I looked into whether it was worth my while switching. However, I am still using the former monopoly supplier in my area, which was much derided earlier in the debate. When I received the figures from Which?, I concluded that switching would not be worth my while because the savings would be so low, and in view of the hassle that would be involved in switching, I did not bother.
The hon. Member for Glasgow North West (John Robertson) mentioned his private Member’s Bill, which deals with pre payment meters. People with pre payment meters will make significant savings only if they are on a very high tariff. Those of us who have made the effort to reduce consumption and become more energy-efficient also find that it is not worth switching, because we are not using enough energy for it to be worth while. The real problem is that energy bills continue to rise, and that hits everyone.
John Robertson
The hon. Gentleman was an excellent member of the previous Energy and Climate Change Committee, although we did not always agree, particularly when nuclear matters were being discussed. Does he agree that those who would save the most money by switching are the ones who do not receive the necessary information, or even have an opportunity to switch?
Mr Weir
The hon. Gentleman is right. There are many reasons for that, but one of the most basic is the digital divide. Many people who might otherwise benefit have no access to these deals, because many are online. They find it very difficult to obtain information. Furthermore, they tend not to have bank accounts.
Let us be honest: the energy companies are not interested in those people. They are the customers who may run up debt, and the energy companies do not generally want to take them on. They make sympathetic noises now and again, but the customers they want are people such as the hon. Gentleman and me, who are relatively well off and can pay by direct debt. I presume that the hon. Gentleman pays his bills on time; I would certainly expect him to. Those are the people whom the energy companies are after, and those are the people who are being targeted for the purposes of switching.
The Secretary of State is right—it will make a great difference if we can get community switching on the go and target the fuel poor—but he will have to change the energy companies’ thinking, and ensure that not just the well-off but the fuel-poor are taken on board. Unless that happens, community switching will make no difference. However, I do not oppose what the Secretary of State said. It interested me, and I should like to see how it works out.
Let me return to the issue of off-grid gas, which affects my constituency and, indeed, much of rural Scotland. While 15% of the households that are on the gas grid are in fuel poverty, the figure rises to 32% for those that are off grid. The Government should think about ways of getting into that market and doing something about it. In my own private Member’s Bill, I suggested that one way of helping everyone quickly, particularly pensioners, was to bring forward the payment of the winter fuel allowance. My suggestion was never debated, because the Tory Whips objected to it for their own reasons, and the previous Bill was talked out. I have raised the matter time and again in the last Parliament and in this one, and I am still waiting for a member of the past or the present Government to explain why my suggestion cannot be considered or even debated.
It is not always the huge changes that make a difference; we can make a difference by means of small, incremental changes. They may not be revolutionary, but they will help, and any help during the coming winter will be very welcome to pensioners and those in fuel poverty. Although the great schemes all sound grand, it may be years before any of them actually makes a difference, and people are suffering from fuel poverty now. As a Labour Member pointed out earlier, a cold snap is predicted for the end of this week. Winter is approaching, energy bills are creeping up, and people are worrying about how they will pay them.
Rather than talk of, for instance, getting rid of Ofgem, we need action. As I have said, small incremental steps can make a difference, but the Secretary of State—the Government—should tell the energy companies that unless they address the problem, there will be stronger action. The Prime Minister promised legislation to put people on to the lowest tariffs, but that seemed to unravel in hours rather than days, and we are still none the wiser about what will be in the Energy Bill. Ofgem’s proposals at least had the benefit of being better thought out, but they too rely on switching and making tariffs simpler. Unless we reach the people who are suffering from fuel poverty and who are at the bottom of the heap as far as the companies are concerned, those changes will make no difference.
I urge the Secretary of State to speak to his colleagues in the Treasury and the Department for Work and Pensions, and to consider measures such as bringing forward the winter fuel payments for pensioners off grid. Such small steps will make a difference, and they will make a difference now.
Scotland Bill
Debate between Mike Weir and John Robertson(13 years, 10 months ago)
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John Robertson
The hon. Lady has obviously not consulted people in areas where nuclear power stations have been built. They want new stations built, because of the investment that that brings for local infrastructure. If the lights were about to go out, people in Anniesland probably would want a new power station. They would like any power station allowing us to keep the lights on. We are digressing on to a subject that has nothing to do with the Bill, and I know that you would stop me talking about it if I continued, Mr Deputy Speaker. However, I hope that the hon. Lady gets my point.
Overall, I welcome the Bill. It has some good points. Fiscal powers have always been a wee bit of a problem. Why is that? Let us have a look: in the mid-1990s, the Conservative party did away with the two-tier system north of the border—we had local government in local and regional areas. Cities such as Glasgow did very well under the old Strathclyde regional council, but once we did away with it, the money started to drift away from the centre of where the work was being done. Under the present incumbent north of the border, business rates for Glasgow were taken into a central pool and spread over the rest of Scotland, so that, in effect, the business rates in a city that created wealth and employment for people living outside Glasgow did not pay for anything. Those people came into Glasgow and used all the facilities, roads and everything else that the city council now had to pay for. I cannot remember the exact figures for now, but of £180 million collected in business rates, Glasgow used to get back £100 million.
In effect, Glasgow—the biggest area for employment—was taking £80 million out of its city centre and giving it to the rest of Scotland. I believe that that was done out of political expediency. It was agreed before the last election that the money would be returned to Glasgow, but we have since seen even more attacks on the city from the Scottish Government. If we are to go down the fiscal road, we have to consider very carefully the political stance, the areas where the money should go and the areas of high deprivation. For deprivation, Glasgow rates higher than any other city in the United Kingdom. Six of Glasgow’s constituencies—in those days, it had nine—used to be among the top 10 worst in the UK, and certainly plenty of its now seven constituencies are still among them.
Yes, we do need help, and we do need money. What we do not need is money disappearing. The fiscal powers must be used very carefully to ensure that the money taken in goes to the areas that need it. The hon. Member for Milton Keynes South (Iain Stewart) talked about how we could do that. If the Scottish Government are to have such powers, however, I want to be able to know where the money is going. Why am I saying this? There has to be an audit trail if the UK Government are to give to the Scottish Parliament money and the means to collect taxes. For example, if this Parliament is to give the Scottish Parliament Barnett formula increases—my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) mentioned this earlier—of about £34 million for disabled children, but that money does not go there, I want the ability to ask where it went. If I were told, “It just went into the budget, and we do not know exactly how it was spent,” that would be fine, as I could use it for political purposes. However, I want to know where the money is, and I want the House to be able to audit every penny that comes from the UK taxpayer.
John Robertson
What I think is ridiculous is £34 million not going to disabled children.
John Robertson
Well, I think that the money went to trying to support a Scottish Parliament and a Scottish Government who were trying to keep councils’ payments down, and that people were getting bought off with it. I do not believe that one thought was given about a disabled child going short or a home not getting the money it needs. I take that view, and I am entitled to my opinion. I believe that we have to go ahead with this.
I have ranted on long enough. I support the Bill. I believe that scrutiny has to happen, and that there are areas where we can make it better. I also believe that there are probably areas where we are thinking about making things better where we may have to reign in, but the most important thing is for the Bill to proceed and for the Committee to look at it even more closely.