Energy Prices

Pat Glass Excerpts

Wednesday 11th January 2012 Commons Chamber

[Pat Glass (North West Durham) (Lab)]

I have spoken in every energy debate in the House since my election. That is because my constituency is largely rural and is in the north-east, and because 25% of my constituents are living in fuel poverty. Many of them are on low incomes, there is high unemployment in the constituency—it has doubled in the last 12 months—and we have an ageing population. Any suggestion of an increase in fuel costs always causes real fear and anxiety in constituencies such as mine.

I listened carefully to what the Secretary of State had to say. While apparently guiding us carefully through the complexities of the energy industry, he seemed to me to be doing so from the point of view of the chief executive of an energy company, and I found that incredibly disappointing. I thought it was complacent in the extreme, and I believe that my constituents would be rightly angered by it. The Secretary of State spoke of dithering and delay in the last Government, but in the two years in which I have been in the House, I have witnessed a master class in dithering and delay. We need to get on with doing something about the present situation.

In my brief speech, I want to raise two issues. As a past student of economics, I want to discuss the artificial economy created by successive Governments in the energy industry, and I also want to return to the issue of off-grid and heating oil prices.

Successive Governments have created and modified the artificial market in the industry, but that artificial market has failed to establish safeguards that would prevent companies from manipulating the market in order to achieve massive profits at the expense of the consumer and at virtually no risk to themselves. It has failed to prevent an oligopoly in which these companies can operate with impunity. We now have few suppliers in the market and entry into the market is almost impossible, and the actions of those few suppliers have a disproportionate and negative impact on consumer prices.

Most of our strategic energy companies are also now foreign-owned. I sat through the previous debate on transport, and I heard the shadow Secretary of State tell us how the rail industry is being gradually renationalised and returned to Government ownership, but, unfortunately, not British-Government ownership; foreign companies and Governments now own our rail industry, and the same is happening in our energy industry.

On off-grid and off-gas, I was stunned by the Secretary of State’s remark that the Office of Fair Trading report gave a clean bill of health to the industry. It is clear to me that he has not read that report. I accept that the report said there was no monopoly in heating oil, but I think that is because its remit was far too narrow so the investigation was too limited.

[Guy Opperman]

I am the hon. Lady’s constituency neighbour and we share a great deal of common ground on the issue of off-grid problems. So far as my constituents are concerned, there is no genuine competition and fairness of pricing in respect of off-grid, so from their point of view the report by the OFT, which was only a market study, is manifestly insufficient and not right. Do her constituents convey the same concerns?

[Pat Glass]

Yes, exactly the same issues are raised in my constituency surgeries. The OFT accepted that in some parts of the country there are fewer than three suppliers, but in practice even though there may be three advertised suppliers, sometimes only one company is prepared to deliver. That is certainly the case in parts of my constituency, and I am sure that is also the case elsewhere. That may not be a monopoly in the view of the OFT, but for my constituents it is definitely a monopoly. Some of my constituents were faced with increases of almost 100% in heating oil prices in the run-up to Christmas last year, and only one company was prepared to deliver. I call that a monopoly. I urge the Government, and my party’s Front-Bench team, to look again at the regulation of this sector.

I am pleased that the Prime Minister seems recently to have woken up to the public’s anger about irresponsible capitalism. We have a culture in which obscene profits are made and consumers are suffering as a result. However, I do not believe that the Prime Minister is serious about this; rather, I think it is just focus-group rhetoric. If he is really serious about doing something about irresponsible capitalism, the energy industry in this country is a good place to start.