Energy Prices

Debate between Nigel Evans and Tom Clarke

Wednesday 11th January 2012 Commons Chamber

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

My objective today is, as it has been in similar debates under the previous Government and this one, to speak up for my constituents who are getting a very raw deal from the energy suppliers. Energy companies are renowned for using fluctuations in wholesale prices as an excuse for unacceptably high domestic energy bills. The issue affects every household in my constituency, particularly those of pensioners and families on low incomes with young children, and it causes financial misery to consumers.

I have written to Ofgem, and met representatives of the organisation. I have sought to remind it of its duty to consumers. Likewise, I have been in touch with the Office of Fair Trading, which has a duty to ensure that a cartel is not operating against the public interest. I remain to be convinced about that. The problem that we are discussing today will not simply go away, and my activity will continue until pressure is brought to bear on energy suppliers to reduce the inflated prices that are being unfairly charged to all households.

As I travel round my constituency, I find that the issue uppermost in the minds of my constituents is the rocketing price of gas and electricity. The price of both has gone up substantially, leaving those consumers helpless or in debt from dealing with the problem. Food inflation is up by 6.2%. Electricity prices have risen by 10%, and gas prices are up by as much as 17.4%.

I was hoping that during this debate we might be spared the fool’s bargain solution of asking the public to switch providers. By heavens, we have heard that so often. This has not, is not and never will be the solution. I have a sense that the Government know, deep down, that what I am saying is perfectly true.

There is no need for extensive research into the domestic energy supply industry. The man and woman in the street are absolutely convinced that energy companies are simply leapfrogging one after another when it comes to increases. An unregulated energy market that allows consumer prices to soar while wholesale prices are decreasing is unjust, irresponsible and is hitting the poorest households hardest. The rip-off continues unabated, and I think we are right to challenge it today.

Let me issue this challenge to the Minister: can he name any other product or commodity that has risen in price so steeply not just during the last year, but during the last decade? This explains why energy prices have, frankly, become a national scandal. I am in constant touch with ordinary decent people in my constituency who are struggling against extraordinary energy price increases. Consumers need energy to keep themselves warm and to cook meals, and they need hot water. Wholesale price fluctuations have largely been blamed on the energy supply from the continent, but there is a healthy scepticism about this rationale. I am not against companies making a profit. What I am against are the profits of energy companies rocketing while consumers are facing human misery.

Clearly, we need to ask whether competition is working as it should. Are companies becoming too comfortable in this small sector in which the price-setter, British Gas seems more keen to keep its prices up than to keep its customers? I am not especially concerned with the profits that those companies are making—obscene though I believe them to be. Nor am I concerned about whether they should face competition inquiries or fines, because fines will be of no use whatever to low-income families in my constituency. My concern is that those people should get a fairer deal—no less and no more than that.

The previous Government made huge strides to combat fuel poverty through the winter fuel payment and other measures such as pension credit. The tragedy is that those efforts are being completely undermined and devalued by the scandalous energy prices that consumers are being—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.