Energy Prices

Debate between Robert Smith and Albert Owen

Wednesday 14th January 2015 Commons Chamber

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to the follow the hon. Member for Tamworth (Christopher Pincher), but I think he misrepresents the words of the chief executive of E.ON in the Select Committee. I certainly never heard him saying those words about the Leader of the Opposition and his energy policy. I can understand energy companies feeling uncomfortable when we have a reset proposal for the energy market and closer scrutiny, but I make no apologies. If it is in the interests of the consumer, we should move forward as soon as possible.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

The important thing is to be concerned about current consumers and their energy bills being as low as possible. However, we must also think about future consumers and ensuring investment in supply and in networks. The lesson from when Labour was in Government and we faced high gas prices is that it did not intervene in the market, but allowed the market to bring forward new investment that brought new supply and prices down.

[Albert Owen]

I thank the hon. Gentleman for his intervention. I think he was complimenting the previous Labour Government on their handling of energy matters. If we get a new Labour Government, we will do exactly the same thing: create the stability that has not been there. [Interruption.] I am pleased that the right hon. Member for Rutland and Melton (Sir Alan Duncan) has returned to the Chamber. When gas and oil prices rise, the suppliers rush to pass on the costs to us, yet when we read in the papers that the oil price has collapsed and gas prices are falling, we have to wait a long time before it comes through on our bills.

The first thing we need to do is

“give the regulator the teeth to order that those reductions are made”—

not my word, but the words of the Prime Minister before the election. I cannot accuse him of being consistent in what he said before the election and what he has said since taking office, but he should be in the Lobby with Labour today, supporting our proposals.

I have long felt that our constituents’ concerns have not been put forward. However, I praise the Energy and Climate Change Committee for producing a number of reports on this subject, including one on prices, profits and poverty in the 2012-13 session. The big issue then—and rightly so—was the confusion and complexity of bills, to which many Members have referred. The outcome was good. We recommended that the Government give extra powers and responsibilities to the regulator to act in the interests of consumers, and the Government enacted just that. We are asking for the same today, and if the Government could do it then, they can do it now. At the time, consumer groups highlighted how, when the price of oil and gas fell, it did not follow through to bills, and Ofgem cited evidence that

“bills respond more rapidly to rising supplier costs compared with falling costs.”

As has been said, the regulator’s remit is to protect consumers. It could intervene sensibly, conduct reviews in its own time—it does not have to wait—and ensure that the consumer gets a better deal. That is what it is there for.

I am pleased with Labour’s policy on energy prices and strengthening the regulator. Like other Members, I have concerns about those off the gas grid. As part of its market reset, Labour will be looking to regulate that area. My constituents who are not on the gas grid are paying considerably more in their unregulated areas—they do not have dual fuel, and their prices have been rising steadily—so I am pleased about the reset and the price freeze, or cap. Whatever hon. Members want to call it, the point is we are going to look at the energy market. It is fractured, and a fracture takes an awfully long time to heal, unless immediate action is taken.

We should be taking that immediate action. Government Members have the opportunity today to stop standing up for the big companies and the industry and instead stand up for their constituents. If they are knocking on doors, they will be hearing how consumers are being hurt by rising energy prices. I have seen the bills of my constituents, very recently, which show not a fall but an increase in the cost of energy since last year—and in that period we had a relatively hot summer and a relatively mild autumn and winter. What is coming will be even harder for people. Yes, there will be a slight drop in prices, and I do welcome E.ON taking the lead, but why has it done it just for gas? When gas prices were rising, the big six told us it had an immediate effect on electricity prices, yet they are not now reducing their electricity prices.

In the last year, the wholesale price of gas has dropped by 20%, but the consumer has seen just a 3.5% drop—from one energy company. We need to rebalance the energy market. We need to stand up, and be proud to stand up, for our constituents. The motion gives us the opportunity to follow the Prime Minister’s wise words. Instead of playing King Canute, instead of being ridiculous—he has been ridiculed by Members of his own party—the Prime Minister, as well as all Government Members, should stand up for our constituents, join us in the Lobby to support our constituents, who send us here to protect their interests, and get the regulator to do its job.

Fuel Poverty (Rural Britain)

Debate between Robert Smith and Albert Owen

Wednesday 7th July 2010 Westminster Hall

[Albert Owen (Ynys Môn) (Lab)]

I congratulate the hon. Member for Suffolk Coastal (Dr Coffey) on initiating this very important debate. It is also timely, given the election of a new Government. I have already been in correspondence with the Department of Energy and Climate Change and I shall come to that in a moment.

I want to start by pointing out that this issue is about rural Britain—the periphery areas of Great Britain and Northern Ireland. The periphery area that I represent in north-west Wales suffers from a double whammy: most of the household customers pay extra for their fuel, but they also pay extra fuel costs for their transport. We have had a number of debates on the issue in this Chamber, and I appreciate what the Chancellor of the Exchequer said in the Budget about looking at rural areas and pilot schemes whereby transport costs and the price of petrol at the pump can be considered. Pilot schemes should also consider rural areas on the periphery of the United Kingdom when it comes to energy prices and energy costs as well. That is what I believe the hon. Lady was developing in her argument.

Periphery areas are a special case. I do not accept that in the 21st century, areas on the periphery should have to pay much more in fuel costs. I know from having the port that is the gateway to Ireland and Wales in my constituency that Northern Ireland’s problem is compounded by fuel smuggling from the Irish Republic. Fuel is smuggled in and out of the United Kingdom via the south of Ireland. There are huge problems that we need to grapple with.

I have campaigned to reduce both the cost of petrol at the pumps and the cost of energy supplies to homes. People living in periphery areas and rural areas are being ripped off. The hon. Lady says that she wants to give the companies a kicking. I will join her and I think that all of us should, because mass profits have been made by many of the companies over a long time and the people who are paying for it predominantly live in the rural areas of Britain. The market is letting people down badly in those areas.

All that my constituents and those of the hon. Lady and every other hon. Member in the Chamber are asking for is a level playing field. Yes, they want reduced costs, but they want to pay the same as people in urban areas and other parts of the United Kingdom, and importantly they want choice. Quite often in isolated rural areas, people just have the choice of propane gas, coal or other things. Off-grid areas do not have access to mains gas and are losing out. The market says that it will provide choice to customers, but in rural areas they simply do not have that choice and they are penalised for it through the price that they pay. That limited choice and paying more for fuel is a huge problem.

I said that I had already raised the matter in correspondence with the Department, and I first did so at business questions, when I asked for a debate on the issue. A debate in Government time would be very much welcome in addition to this important Adjournment debate. I have had, over many years, helpful responses from Energy Ministers and progress has been made. Warm Front is a good national project that has helped an awful lot, and good energy efficiency measures are available. I am certainly familiar with what has been done by the Welsh Assembly and I know that other devolved Administrations are working on the issue, too. This Parliament, local government and the Welsh Assembly can work together with the distribution network to ensure that we get better services to people in these areas.

In the very helpful reply that I received from the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), he said that he recognised that more needed to be done. One option that he came up with was a further roll-out of energy efficiency measures. I disagree with the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith), who said that we have been concentrating just on price. Huge amounts of money have been invested in energy efficiency measures. In my constituency, most of the houses have been done, and to a very high standard, but the price is the issue.

[Sir Robert Smith]

The hon. Gentleman is right to say that the price is the issue. The problem was that in the early days of the previous Government, because of the way in which the market was working, prices for domestic gas were falling so dramatically that people were coming out of fuel poverty and it seemed as if the job was being done. Then the price started to go up relentlessly and it became clear that much greater work should have been done in the good times to make the housing stock more efficient, rather than responding after the fact.

[Albert Owen]

I agree partly with what the hon. Gentleman says. It is easy to be wise after the event. He will remember that at the time we were in the “dash for gas”, gas was relatively cheap across the whole United Kingdom and our eye was off the ball, because people were getting cheap fuel. Yes, more could and should have been done then, and it should have been done over the past 13 years. I hope that more will be done over the next few years to ensure that we alleviate fuel poverty in rural areas.

The Minister told me he was involved in the option of promoting renewable heating, which is another important way forward. Although I shall argue for the gas network to be extended throughout the United Kingdom, we need, particularly with the low-carbon economy that we are moving towards, to consider renewables. Geothermal energy is important in many areas. It would be helpful if new estates and new housing, including affordable housing, such measures installed at the construction stage.

In my constituency—I am sure that other hon. Members have experience of this—many of the problems are not just with stone houses that are a century old or more, but with estates that were built in the 1960s and ’70s, where the developers simply did not put gas mains in and did not provide for up-to-date fuel, leaving people on the periphery of the gas mains area. I am sure that at that time people would happily have paid for access to the gas mains from those properties, and it would have been a selling point for the builders, who were very short-sighted.

When I talk about areas off the grid, I am talking about not individual isolated properties but more often about small villages, towns and hamlets that are a short distance from the mains. There are issues about getting the pressure to the level needed but, again, I am sure that in the 21st century that can be done relatively simply.