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Domestic Gas and Electricity (Tariff Cap) Bill Debate
Full Debate: Read Full DebatePeter Kyle
Main Page: Peter Kyle (Labour - Hove and Portslade)Department Debates - View all Peter Kyle's debates with the Department for Business, Energy and Industrial Strategy
(6 years, 5 months ago)
Commons ChamberI apologise for having to leave soon after I have spoken, but I am hosting another event elsewhere in the House of Commons.
High energy costs are felt most significantly by the vulnerable and those on lower incomes, which is why I strongly support the Bill and congratulate both the Business Secretary and the Energy Minister for what they are doing. Those who pay the most for energy are the ones who can least afford it. Eight out of 10 people on high-cost standard tariffs earn £18,000 a year. Scope, the charity for disabled people, found that households with disabled persons make up 38% of all fuel-poor households in England. More than a quarter of households with a disabled person—over 4 million households—spend more than £1,500 a year on energy bills, which is why this is a matter of social justice. The Government’s emphasis on the cost of living is incredibly important. I welcome that more than 4 million households are on prepayment meters. I also welcome the freeze in fuel duty for eight consecutive years, meaning that the average motorist has saved £850 since 2010.
The truth is that our energy market is fundamentally uncompetitive. The six largest energy providers focus on cheap introductory offers and leave loyal customers on poor-value tariffs. These standard tariffs earn the big six an average of £1.4 billion more than they would earn if the market was working well. The lack of competition means that suppliers can charge what they please. We have seen in recent weeks how increasing wholesale energy costs have had a knock-on effect on tariffs in smaller providers and those in the big six.
I urge the Minister to look at other issues hitting energy consumers. For example, those who do not pay by direct debit face an extra bill. I had an email only yesterday from someone telling me that they refuse to pay by direct debit, so they have to pay the electricity company—the Co-operative Energy—£200 a year more than if they had signed up by direct debit. We know that the vulnerable often do not pay by direct debit and sometimes do not have bank accounts. Some are paying up to £390 extra a year. This charge is unfair. I urge the Minister to look into these cases.
I also have concerns about the huge wages and the way in which profits are used by the big six bosses. Now, I am not against high wages or profits, but I do not think that these wages are linked to performance. For example, top staff in Centrica get £13.1 million a year, and the chief executive officer of E.ON UK said that his company had £235 million in profits. Although I am not against profits or high wages, wages should be linked to performance and we should ensure that those profits are ploughed back into helping the most vulnerable consumers.
We need a consumer Bill of rights to bolster the position of all energy consumers. It should be easily digestible and understood. To get cheaper tariffs, everybody should know what their energy bills should be and what rights they have. A consumer Bill of rights should ensure access to the lowest possible cost for loyal customers who decide not to switch and end up on the standard tariffs.
I would normally be pleased to take interventions but, if the hon. Gentleman does not mind, I will not give way because of the demands on time. There are a lot of speakers and Madam Deputy Speaker has asked us to cut down our contributions.
My next point is about injecting competition into the market that is currently dominated by the big six. We have a problem because, although this is very much about competition in the private sector, energy is actually a public good. The Government need to do much more to support not-for-profit providers. The hon. Member for Harrow West (Gareth Thomas) mentioned co-operatives, of which I am very supportive. Robin Hood Energy, launched by Nottingham City Council, is an example of a not-for-profit provider. Although we need market competition, we need to look much more at the co-operative model when we are talking about a public good. I do not believe in nationalisation, but I do think that we should have not-for-profit models in essential services, because energy is the lifeblood of our country and, without it, we would be in the dark ages. For too long, to use a well-known phrase, the market has been dominated by the few, not the many.
I very much support the Bill because it is the right thing to do symbolically. It sets the tone of what this Government are about—helping the most vulnerable. It is also the right thing to do practically. To me, this is not an argument about big government or small government; it is simply an argument about good government.
I hope that does not happen. Ofgem and the Competition and Markets Authority are putting the cap in place to make it easier for customers to switch. Northern Ireland, where there is a price cap, has as much switching as we do. The international examples suggest that we can have switching in a market that also has a price cap.
Sorry, I am not going to give way again, otherwise I am going to get into trouble with Madam Deputy Speaker, and I am more scared of her than I am of my hon. Friend.
Indeed.
There are two areas where the Government need to take action to ensure that, once the price cap is over in 2021 or 2023, we do not go back to business as usual. First, they need to give greater clarity about what will happen to things such as the energy company obligation and the warm home discount once the price cap goes away.
Secondly, I welcome the Secretary of State’s commitment today that the statutory instrument on data sharing to allow energy companies to know who their vulnerable customers are will be tabled before the Bill receives Royal Assent. We need to see that SI and those changes, because the energy companies do not know all the customers who are vulnerable and experiencing financial difficulties. Our Committee is convinced that those two issues will be key in ensuring that, both during and after implementation of the price cap, those who need it most get the protection they need.
The time for action is over-ripe. These rip-off practices cannot be allowed to continue. There is cross-party support for this legislation, and both the Labour and Conservative manifestos at the last election included a commitment to cap energy prices. Now the Government must make that cap a reality before next winter. I strongly urge colleagues across the House to support the Bill, to deliver some fairness to all our constituents.