Oral Answers to Questions

Philip Hollobone Excerpts

Thursday 5th February 2015 Commons Chamber

[Amber Rudd]

I am aware of that issue and we will cover it in the community energy strategy update. I will ensure that the hon. Gentleman is kept informed of that so that it addresses the particular problem he has raised.

[Mr Philip Hollobone (Kettering) (Con)]

16. What steps he is taking to ensure that energy bills for domestic consumers and business users reflect falling wholesale energy prices.

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

My hon. Friend raises a vital issue and we have indeed been pressing the larger energy firms on this for some time. The good news is that energy prices have not only been frozen over the last year, but they are now being cut. Moreover, there is now a plethora of lower priced deals out there, especially from the independents, thanks to our policy of promoting competition, encouraging switching, and piling the pressure on the big six with an in-depth investigation of the energy market by the Competition and Markets Authority. I assure my hon. Friend we will continue to fight for the consumer every day.

[Mr Hollobone]

Recent Which? research shows that energy bills are the main financial worry of two thirds of households, and that while there has been a welcome reduction of about 5% in domestic tariffs this could have been as much as 10% had they mirrored the fall in wholesale costs. What more can the Government do to make sure the big energy companies are more responsive to falls in wholesale prices?

[Mr Davey]

Some energy suppliers have reduced their prices by 10%, and OVO Energy recently cut its prices by more than 10%. It is a complicated analysis and, working with the Treasury, we have looked at it in some detail. Wholesale gas costs represent about a quarter of the average bill; other costs are also changing and not all of them are going down. This is complicated, but it is right that the independent competition authorities look at this—they are specifically addressing this issue—because if there is any malpractice in the energy markets they will be able to expose it and have the teeth to tackle it.

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[Mr Davey]

I think that is a little harsh. My Department published the calculator, so far from ignoring this, we are putting into the public domain not just a UK 2050 calculator but, having helped 20 other countries with their calculators, now a global calculator. It shows that people’s lifestyles—not just their meat-eating habits, but their transport and so on—all have an impact on climate change. The calculator enables people to look at the types of choices we may need to make in the future.

[Mr Philip Hollobone (Kettering) (Con)]

T4. What percentage of the domestic energy market was captured by the big six energy companies in 2010, and what is the percentage now?

[Mr Davey]

In 2010, the big six, created under the previous Government, had a share of the retail market of more than 99%. As a result of the competition we have encouraged, there has been a big increase in the number of independent competitors, whose market share has increased from less than 1% to more than 10.5%, and is rising fast.