Oral Answers to Questions

Stephen Crabb Excerpts

Tuesday 19th March 2019 Commons Chamber

[Claire Perry]

I do not want to pre-empt the White Paper, but I think that one thing we will show in it is how the ongoing attempts to be technology-neutral can work across the piece to generate low-cost, low-carbon energy, and highly competitive technologies will be part of that. We remain interested in marine and tidal, as the right hon. Gentleman knows. Of course, we need to discuss with the Treasury any revenue support mechanisms, but I want to continue to engage with the sector on a long-term basis.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

The Minister will be aware that the proposed Swansea Bay city deal would include a strong marine energy component centred on Pembroke Dock. She will also be aware that the growth deal is beset with concerns and questions about its progress, so will the Minister, along with Welsh Ministers, please look into the marine renewables part of the project to ensure that progress is made and opportunities are not lost?

[Claire Perry]

Of course, it is striking that we had the very interesting Swansea tidal bid, which would have been the most expensive power station in the UK had we built it, and that that project has now come forward in a different form not requiring Government subsidy. There is huge potential to continue to work with the communities of Swansea and across Wales, and I will be delighted to keep working with them.

--- Later in debate ---

[Mr Speaker]

Order. I am sorry, but the questions and answers are just too long. I am trying to help the House, but what we want is a brief question and a brief answer, not a speech.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Barclays has just announced another swathe of branch closures that affect my constituency, as the banks continue their flight from small towns and rural areas. Where does the Minister think all this will end? Does she agree that banks have a wider social obligation?

[Kelly Tolhurst]

I agree with my right hon. Friend that banks have a wider social responsibility. That is why I am committed to working with the Post Office to make sure that under the new banking framework post offices are remunerated correctly for the service they are providing for communities that the banks have moved away from.

Oral Answers to Questions

Stephen Crabb Excerpts

Tuesday 12th February 2019 Commons Chamber

[Claire Perry]

My hon. Friend raises an excellent point. He will know that building regulations now set minimum energy standards, couched in performance terms rather than being prescriptivist about the types of technology that should be used. Builders are increasingly adding renewable energy systems, but I am always interested to see what more we can do to bring forward such a good way of lowering bills and CO₂ emissions.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Both solar and wind have been very successful in driving down industry costs, but does my hon. Friend recognise that that poses a challenge to technologies such as wave and tidal that are competing against solar and wind? Such technologies are chasing a number that is always falling faster than they can keep up with.

[Claire Perry]

I do. I was pleased to meet the Marine Energy Council a few days ago. The meeting was supported by a cross-party group of MPs, and we discussed exactly this issue and how, in a cost-effective way, we might look to continue supporting technologies that are further from market.

Nuclear Update

Stephen Crabb Excerpts

Thursday 17th January 2019 Commons Chamber

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I thank my right hon. Friend for his statement and for the extraordinary lengths that he was willing to go to in trying to create the right conditions for this important north Wales project to happen. However, given Hitachi’s decision, given the decision on Moorside and, in fact, given the failure of a whole swathe of Japanese nuclear projects around the world, are the days of relying on mammoth nuclear power stations that make huge demands of taxpayers’ cash over? Should we not be putting more energy into examining smaller nuclear reactor technology?

[Greg Clark]

My right hon. Friend is right that small modular reactors have significant potential. The nuclear sector deal that we agreed with the sector and published last year contains a substantial commitment to small modular reactors, many of which would be deployable on the sites of existing and recently decommissioned nuclear reactors. However, even large new nuclear reactors can make a useful contribution. There is a challenge in every country, and this is by no means just a feature of Japanese investors. I have described clearly and, I hope, candidly the challenges that exist given the abundant availability and falling prices of alternatives. That is why we will take forward a serious assessment of whether a different financing model might make the economics more competitive. Again, the sector deal that we struck contains a programme to reduce the build costs of new nuclear, which would of course also help its financeability.

Draft Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2018

Stephen Crabb Excerpts

Monday 14th January 2019 General Committees

[The Minister for Energy and Clean Growth (Claire Perry)]

I beg to move,

That the Committee has considered the draft Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2018.

Good afternoon, Mr Davies. It is a pleasure to serve under your chairmanship. I am very pleased to open this debate. As it says on the tin, these regulations will amend the domestic minimum standards provision in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. If approved by the Committee, they will take effect from April 2019 and will introduce a new landlord funding element to the existing provisions, ensuring that they actually deliver the energy efficiency improvements that we set out in our clean growth strategy.

For hon. Members who are unfamiliar with the private rented sector minimum standards, I will give some background on the sector and the 2015 energy efficiency regulations, before discussing the need for, and the effect of, these regulations. The 2015 regulations established a minimum energy efficiency standard of energy performance certificate band E for privately rented properties in England and Wales. There are about 4.5 million such homes across England and Wales; it is the second-largest form of tenure after owner occupation, comprising about one fifth of domestic housing stock. Many of those private rented properties already have an EPC rating of E or above, which is very welcome, but about 290,000 properties—6% of the total—have an EPC rating of F or G. That means that they are particularly energy inefficient and are costly to heat. On average, it costs about £1,000 more per year to heat an F or G-rated home, compared with one rated band D. Many of those homes are occupied by people living in fuel poverty.

The 2015 regulations were designed to drive energy efficiency improvements to the least efficient privately rented homes. Subject to a limited number of exemptions, landlords of F and G properties are required to use available third party funding to improve their homes to a minimum of EPC band E before they can be let out. The third party funding could have included energy company obligation funding and local authority grants, but it was primarily intended that it would come from the green deal finance scheme. I was very proud to sit on the Committee that considered the legislation—[Interruption.] Excuse me while I rummage for a tissue. That scheme was intended to provide a cost-effective, appealing way for owner-occupiers and landlords to borrow to upgrade their homes or the properties they were letting out. It is a source of great regret that the scheme did not work—I can answer questions about it later. That essentially meant that we were targeting a pool of homes without the scheme with which we were intending to deliver the changes. [Interruption.] Thank you to my Parliamentary Private Secretary for the tissue provision—excellent PPSing.

Where a landlord of an EPC F or G-rated home cannot improve the home to band E, either because funding is unavailable or because there are legitimate technical barriers, such as those often associated with listed homes, the regulations permitted them to continue to let the property so long as they registered an exemption on the new minimum standards exemption register.

By targeting the least efficient properties, we hoped to improve the living conditions of tenants, many of whom live in fuel poverty. In fact, about 45% of that cohort are classified as fuel-poor. The regulations were a crucial lever in our work to meet the fuel poverty strategy and the Government’s decarbonisation targets. As we know, the green deal mechanism did not work as intended, and that led to many landlords being able to file exemptions on the exemptions register. We have taken a reasonable amount of time to consult carefully on how we should amend the original legislation with new regulations.

These regulations place a requirement on landlords to invest or co-invest in energy efficiency measures where third party funding is insufficient or cannot be secured. We have capped that investment at £3,500 per property to avoid placing an excessive burden on landlords. Consequent to that, we intend to introduce several ancillary amendments, such as the cancellation of existing “no cost” exemptions by April 2020.

Let me turn briefly to the choice of the £3,500 cap. Several numbers were consulted on, and our analysis is that this one strikes the best balance between ensuring that a meaningful number of properties are improved to EPC E and that those improvements are affordable, particularly for small landlords. It is striking that the majority of landlords in this country do not have a large portfolio; they are often families with one or two properties, which are often let out in the hope of generating some additional income for the landlord’s retirement. Our analysis shows that, with the cap set at this level, approximately 48%, or almost half, of EPC F and G-rated properties can reach band E, with an average cost of only £1,200, which is well below the cap. The remaining 52% of properties will be able to receive at least one improvement and make some progress towards that target, with an average cost of £2,000.

That is beneficial in two ways. First, improvements made under this cap, whether to get to the E level, or to progress from the worst properties, will save tenants an average of £180 a year on their energy bills—of course, the savings could be very much more substantial. The improvements are also estimated to increase the capital value of a property by £8,500. There is a real sense that it is an absolute win-win situation for both tenants and landlords alike. That is alongside the energy price cap, which has come into effect with cross-party support, saving consumers an estimated £1 billion on their bills annually.

We obviously consulted carefully on these numbers and exemptions. Some 84% of consultation respondents supported the proposal to introduce the landlord funding component, and they made the point that, alongside the obvious cost-saving benefits to tenants, landlords will benefit from the improved energy efficiency of these properties in the form of reduced maintenance costs and an increase in property capital value. That will make a meaningful contribution towards our overall carbon dioxide reduction targets, support our clean growth and support our agenda of creating more routes to market for energy efficiency technologies.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

My right hon. Friend makes an important point about the potential benefit to landlords, but she will know that those are perhaps not strong enough to incentivise landlords to invest proactively in the kind of improvements to properties that tenants need to see. Will she take a moment to outline the precise mechanisms whereby the obligations on landlords will be activated? We know that far too many tenants live in substandard property from a fear of raising difficult issues with landlords or of their own insecurity. How can she be sure that the regulations will lead to the positive outcomes she hopes for?

[Claire Perry]

My right hon. Friend makes a very important point that gets to the nub of the issue: how will we ensure that these regulations are enforced? Enforcement is a power given to local authorities, which have a range of powers to support effective enforcement. To understand what that requires and what the best levers are to drive enforcement, my Department is funding seven 12-month longitudinal enforcement studies this year, which will work out what is the best enforcement toolkit.

There is now more data across Government on home standards and on which households live in fuel poverty, so there is more data available to target the enforcement work. We will have evidence from right across the UK, although not, I believe, from any constituencies in Wales—I apologise for that. We will have at least a sense of what we need to do to enforce the regulations.

The other point worth touching on is that someone might be renting a property where they could save themselves between £200 and £1,000 a year, but that information is currently not readily available to renters. Generally, agents list properties simply on the basis of aggregate rent per week or month. They might also show broadband speeds or local school quality. I would very much like—we are doing some work on this—estate agents and rental agents to put the whole question of cost to rent and cost to operate into the metrics that they show to tenants. If something looks affordable on paper, is it affordable to occupy? That is a piece of ongoing work. I hope that my right hon. Friend is satisfied with that response.

Leaving the EU: Airbus Risk Assessment

Stephen Crabb Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

The supply chain of Airbus and indeed of every company in the sector is pervasive right across the UK, and many employers—small and large—across many of our constituencies contribute to it. The hon. Lady asks about the impact of leaving the single market. The purpose of the negotiations in the months ahead is to make sure, as we leave the European Union and as we leave the single market—she knows that it is not possible to be a member of the single market and to be leaving the European Union—that we have an agreement that allows us to trade without frictions and without tariffs. That is our purpose, and it is what the Prime Minister has very clearly set out. It is within our grasp, and I am confident we will be able to achieve it.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Is not the truth that the kind of Brexit deal that will fully safeguard our industrial base will be one that requires significant compromises? Does my right hon. Friend agree that we are fast approaching the moment when we need to spell out, for the benefit of business and industry, what those compromises look like?

[Greg Clark]

My right hon. Friend is right that any negotiation of course involves give and take. That is true on both sides, and it is important to remember that these observations have been addressed to the European Union as well as to the UK. My right hon. Friend talks about the time. As I said to the Chairman of the Exiting the European Union Committee, the right hon. Member for Leeds Central (Hilary Benn), now is the time when we are moving on from discussing the terms of our withdrawal to what our future economic partnership looks like. This is precisely the time at which we will set out and agree, I hope, a long-term future in which Airbus and many other companies can prosper.

Energy Policy

Stephen Crabb Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

On the hon. Gentleman’s last point, my understanding is that the Welsh Government support the option of a third runway at Heathrow; I am not sure whether that is a co-ordinated position.

The hon. Gentleman asked a number of questions. I understand his disappointment that we have not been able to approve the proposal, but he will know that we all—be it the UK Government or the Welsh Government —have to be responsible stewards of taxpayers’ and consumers’ money. He asked about the analysis that has been made and the time that has been put into this decision. It was the request of the Welsh Government and the recommendation of Charles Hendry that we consider alternative suggestions as to the economic impact of the proposal. That is what we have done, and I have been willing to extend the analysis and leave no stone unturned to see whether this project can be approved.

The hon. Gentleman knows that our record on renewables is one of the strongest in the world, particularly for offshore wind, in which Wales—as well as every other part of the United Kingdom—is a huge beneficiary. We have quadrupled our deployment of renewables since 2010. We are the world’s leader in offshore wind, creating jobs and exports around the world. If we were to use the funds at less value for money—that is, take them from that very successful supply chain and deploy them instead to the programme of a tidal lagoon—the consequence would be job losses in Wales and other parts of the United Kingdom. It is the commitment to continue what has been a successful strategy of achieving jobs all around the country in offshore wind that provides the reason why we need to be rigorous about this.

Listening to the hon. Gentleman, one would think that what ordinary working people and businesses have to pay for their energy is a matter of complete indifference to him. Is there any limit at all to what he would he would make consumers pay? The Swansea lagoon would cost three times as much—I repeat, three times as much—as having the same electricity generated by offshore wind here in the UK. The whole tidal programme would cost £50 billion when we could have the same amount from wind for nearer to £20 billion. Is it Labour’s policy to charge £700 per household more than is needed in the first place? As for economic development in Wales, it would be cheaper to write a cheque for £15,000 to every single household in Wales than to subsidise this particular proposal. I am afraid that his response sums up the approach of spending whatever it takes, no matter how wasteful of consumers’ and taxpayers’ money that is.

The hon. Gentleman talks about industrial strategy, but the clue is in the word “strategy”. A strategy does not spray consumers’ or taxpayers’ money on any proposal—it requires a rigorous assessment. We are a leader in offshore wind because we took a decision to focus on a technology for which costs could come down and there was a massive global market in which we could create jobs. What he proposes would reverse that by doling out subsidy to whoever asks loudest, rather than what has been rigorously assessed. That is not strategic.

In summary, Labour would pay £700 per household for less reliable electricity, fewer exports from offshore wind and fewer jobs, including in East Anglia, on Teesside and in Scotland—and, yes, in Wales and Northern Ireland, too. It would saddle taxpayers with a decommissioning cost of over £1 billion. We will always put the interests of taxpayers, and working people who pay bills, first. I would hope that a responsible Opposition would acknowledge the seriousness of the analysis that has been made and recognise that its conclusion is rigorous.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Even Conservative Members who have been the strongest supporters of the lagoon project have always known that there was a serious value-for-money question to be answered. Will my right hon. Friend confirm that every single avenue was explored to try to find a financial solution to make this happen, and that today’s announcement does not close the door on future investment in tidal and wave power that would give us reliable, clean energy into the 21st century and beyond?

[Greg Clark]

I can confirm that. Anyone who has concentrated on this proposal and seen the assessment that has been made would conclude that my hon. Friends and I have left no stone unturned in looking at all possibilities that might improve the economic case. However, when the conclusion is that something is so much more expensive than other low-carbon technologies, we have to follow that evidence and protect consumers and taxpayers from paying so much more than they need to pay. My right hon. Friend is absolutely right that we continue to believe in innovation. We have spent £100 million on new energy research and development. We will continue to do that. We have had other proposals that suggest they would be cheaper. I am very happy to continue work with other promoters of schemes to see whether what would be an attractive proposal can be implemented in a way that would be value for money.

Nuclear Power

Stephen Crabb Excerpts

Monday 4th June 2018 Commons Chamber

[Greg Clark]

The hon. Lady will know from her involvement in the scrutiny of the Nuclear Safeguards Bill that we have made very good progress both on the proposed agreements with other nuclear countries and on our intended association with Euratom. I regard this as an area in which it is clearly in everyone’s interest to have the greatest possible continuity of the existing arrangements. That is no secret; it is known to any partner and any investor, including Hitachi.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I welcome my right hon. Friend’s statement. He will know that the Wylfa Newydd project will be the largest construction project in Wales for more than a generation, so what discussions is he having with the Welsh Government to ensure that we maximise the opportunities for the Welsh supply chain, which will be the backbone of delivering this important project in Anglesey?

[Greg Clark]

Of course, the opportunities for Wales follow from exactly the point that my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) made. The knowledge of the investment that will be made there provides great opportunities for people in north Wales and beyond to develop the skills that will be in high demand and to ensure that the engineering companies and other suppliers can gear up for this important work. Before I came to the House today I discussed the matter with the First Minister, and my right hon. Friend the Secretary of State for Wales spoke to Ken Skates, the Cabinet Secretary for Economy and Transport. We will work closely together to ensure that across Wales and, indeed, the United Kingdom, these opportunities result in real jobs and prosperity for the people of Wales and the UK.

Oral Answers to Questions

Stephen Crabb Excerpts

Tuesday 13th March 2018 Commons Chamber

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

What consideration is my hon. Friend giving to the downstream sector? Our remaining oil refineries are important national assets and major centres of employment, and they could benefit from clear, long-term thinking.

[Richard Harrington]

As my right hon. Friend will be aware, the whole sector is important to us, and specifically the supply chain. I have met various players involved, and it is of critical importance to us.

Domestic Gas and Electricity (Tariff Cap) Bill

Stephen Crabb Excerpts

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

[Greg Clark]

I disagree with the hon. Gentleman. As I will go on to explain, part of the problem that we are addressing is that the competition authorities have for some time identified this tendency on the part of companies, and the Bill’s proposals will give Ofgem the power to correct that. He brings me to my next point: for all the progress that has been made since privatisation, it is clear that the market is not perfect. That is indeed why the coalition Government referred the industry to the Competition and Markets Authority to assess how competitive the retail market was.

In 2016, the CMA concluded, following a two-year investigation, that

“our view is that the overarching feature of weak customer response gives suppliers a position of unilateral market power concerning their inactive customer base and that suppliers have the ability to exploit such a position through their pricing policies…by pricing their standard variable tariffs materially above a level that can be justified by cost differences from their nonstandard tariffs; and/or by pricing above a level that is justified by the costs incurred in operating an efficient domestic retail supply business.”

The CMA identified the detriment to consumers—that is, how much consumers are overpaying compared with a fully competitive market—at an average of £1.4 billion a year. This comes from the approach to pricing that is practised by the biggest six energy companies, which for the most part, inherited their customers from previous monopolies. Their approach is to charge their customers on default tariffs much more than those who engage in the competitive part of the market. Currently, the differential for the big six stands at around £300 a year. Those paying the default tariff are much more likely to be in reduced circumstances; 80% of households with an income of less than £18,000 did not switch supplier in the past three years.

From the outset, the UK’s energy market has had a regulator whose responsibility is to act in the interests of consumers. Indeed, if we look back, we can see that Britain has long been a pioneer in not only the privatisation and liberalisation of industries but the regulation of these utility industries, too. Indeed, the British model of privatising state-owned monopolies is to liberalise the market to allow new competitors in and to protect consumers against the power of incumbents—from BT to British Gas—which enjoy an advantage of inertia and loyalty. That has always been recognised in our regulatory arrangements.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

My right hon. Friend is making a very important point about regulation, but is not part of the context of the Bill the fact that the regulator, Ofgem, was far too slow to respond to the pressures on people, particularly those on low incomes and in vulnerable households?

[Greg Clark]

I agree with my right hon. Friend, and I was making the point that we have long been a pioneer in regulation, which has meant adapting regulation to the changing circumstances. We started with RPI minus X, and that evolved into different models, including looking at the regulated asset base. In my view, it is necessary to keep up with our traditions of acting boldly to protect consumers’ interests, and we should be agile in response to new behaviours, especially those brought on by new technologies.

--- Later in debate ---

[John Penrose (Weston-super-Mare) (Con)]

Thank you, Madam Deputy Speaker; I will try to edit as I go.

Today is a great day. To those who say that politicians never deliver on their election promises, we can collectively send a blaring foghorn reply of “You’re wrong.” Today’s energy price cap Bill is an incredibly rare political unicorn: a pledge that not only has cross-party support, but is being fulfilled. As the organiser of the cross-party letter, which gathered an exceptional and unprecedented 213 MPs’ signatures, I thank my co-convenors, the right hon. Member for Don Valley (Caroline Flint) and the hon. Member for North Ayrshire and Arran (Patricia Gibson), for their help. I also thank every MP who signed the letter and the Ministers who have listened and brought its contents forward. Without their help, we would not be here today.

The Secretary of State has already ably described the problem. It is a two-tier market in which millions of customers are penalised for being loyal. Sneaky price hikes mean that people who have forgotten to switch are gouged on super-expensive rates to which they never agreed. Customers are being taken for granted and taken for a ride. So it is a great day, but in spite of all that we still have some pitfalls to step around. First, it is vital that the price cap is temporary. The long-term answer for most people is not an endless cap; it is making the customer king and putting them in the driving seat, so that the energy industry provides the same good-value and sensible deals that we take for granted in every other walk of life.

[Stephen Crabb]

I pay tribute to my hon. Friend for his hard work in ensuring that the Bill was brought forward. He makes an important point about consumers. He described them as behaving in a “loyal” way, but for many people, particularly the most vulnerable and those on the lowest incomes, this is about inertia. We need to change behaviours and get better engagement from some of the most vulnerable energy customers, which will be key to making this Bill work.

[John Penrose]

My right hon. Friend is a co-signatory to the letter, for which I thank him, and he makes an important point. It is not just vulnerable customers, of course; it is the many of the rest of us who are time poor. This is a far broader question than just vulnerable customers, although they are a key part of it. Many other families, either because they are loyal or because they just have not got round to it, have not switched. We need to persuade them to change their behaviour, and we need to change the market to help them to do so.

Choosing a new supplier should be no more complicated than changing our brand of coffee or corn flakes. The big six should have to work a lot harder to attract and keep our business. To be fair, as we have heard and as I think my right hon. Friend was alluding to, the regulator, Ofgem, has made a start. We have more than 50 new competing firms that are scrambling to take business off the big six. Smart meters are coming, and switching is slowly getting simpler, quicker, easier and less scary.

The Bill rightly says that the price cap should die after a couple of years, but what about the other details? Price caps, as we have heard, are dangerous things. They are fiendishly difficult to get right: they drive suppliers away if the price is set too low, and they gouge customers if the price is set too high.

So how do we design a cap that does not make things worse rather than better? Well, the Bill says that the price will be set by an all-knowing committee of Ofgem regulators every six months, but the international price of energy moves around every day. Although I am sure Ofgem is full of clever and well-intentioned people, no one is that clever. Any energy trader will tell us it is impossible to know what the price will be in the next six minutes, let alone the next six months.

--- Later in debate ---

[Albert Owen (Ynys Môn) (Lab)]

The hon. Member for Taunton Deane (Rebecca Pow) is right to say that we have heard many good speeches, including from Members who took part in the pre-legislative scrutiny of the Bill by the Business, Energy and Industrial Strategy Committee. It produced a unanimous report, and I am pleased that the Government have taken on board the recommendations in it, because the Committee did a thorough piece of work.

I have supported and campaigned for an energy cap for many years. I am pleased that it will be introduced, and I will support the Bill tonight, but it would be wrong to say that it is a panacea: it is not. Many other pieces of work need to be done. I hope— I will work with the Government on this—that during the period of the price cap, we will look at other parts of the energy market, which the Prime Minister rightly described as “broken”. People are getting ripped off by, for example, transmission and distribution costs, because we have private monopolies running those sections of the energy market. It is right that we have the Bill, because the market has not worked.

I want to say something contrary to some of my colleagues on the Committee who have blamed the regulator. I have been on the Committee for many years, since it was the Energy and Climate Change Committee, and the regulator has done some good work. The first thing it did, as my right hon. Friend the Member for Don Valley (Caroline Flint) pointed out, was to ensure that consumers had greater transparency in their bills, so that they could see the unit prices. Before, those prices were hidden and people did not really know what they were being charged. The energy companies blamed the fact that wholesale costs had gone up, so they had to put their prices up. There is a new regime in Ofgem that is doing more impressive work in looking after the most vulnerable. When the chief executive gave evidence to the Committee he had the honesty to apologise for not doing enough, and that was the right approach.

Successive Governments have not done enough either. We have a huge responsibility to look after the most vulnerable energy users. As individual Members we must scrutinise the Government, but they must do more. When I was on the Energy and Climate Change Committee between 2010 and 2015, I was fed up of Ofgem coming to one session and saying that it did not have enough powers, and the Government would not give it more powers, and then a Minister—they changed regularly—coming to another session and saying that the regulator had enough powers. It was a missed opportunity, and we are much better placed now.

We put too much emphasis on switching as a panacea. As other hon. Members have said, a low number of people switch. It is not an easy thing to do. People are very busy, and vulnerable people may have two or three jobs. The last thing that they want to do is spend hours and hours on the line to a call centre to switch. That approach did not work, for many good reasons. I remember the Secretary of State in the coalition Government—the right hon. Member for Kingston and Surbiton (Sir Edward Davey)—saying that switching was the great answer. David Cameron, as Prime Minister, accepted that, and the issue was kicked into the long grass. I am glad that the CMA produced its report, but its predecessor, the Office of Fair Trading, held many inquiries and did not do a good enough job of helping people. I am pleased that we are better placed now. The role of the regulator is important, and it is now more proactive and helpful.

My hon. Friend the Member for Southampton, Test (Dr Whitehead) was a member of the Committee that pushed for measures on prepaid meters, which were affecting the most vulnerable. The energy price cap for prepaid meters has worked in helping to reduce their energy costs. There was a fear that the energy companies and suppliers would go up to the highest rate, but that has not really happened. I am therefore pleased to support the cap in the Bill, and I am pleased that there is a sunset clause.

Changing the behaviour of energy companies is essential. In the past, they have been playing the system while blaming others. They have always said that transmission costs are too high and fixed, and that they are vulnerable to wholesale costs. We had a situation, particularly from 2008 to 2014, described as “rocket and feathers”: prices rocketed, but when the price of crude came down there was only a trickling down or “feathering” in the cost of people’s bills. That situation has been exposed through tariffs, which has been important.

Transmission and distribution costs account for as much as 25% of people’s bills. The distribution companies are private monopolies, as is National Grid for transmission. There is no competition in that part of the sector. When we talk about a broken sector and free markets, we must remember that in many areas the market is actually restricted to one company. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) rightly talked about the peripheral areas of the United Kingdom, many of which are off-grid, paying more for their energy. People who are off-grid do not have the option of dual fuel payments, so they are paying a lot for either off-mains gas or oil.

[Stephen Crabb]

The hon. Gentleman is making an important point about rural consumers who rely on off-grid gas and liquefied petroleum gas supplies. There have been inquiries into how that market functions. Is he satisfied that it is working fairly for rural consumers in Wales and the rest of the UK?

[Albert Owen]

No. I think more has to be done. I hope that the energy cap sunset clause will enable us, working with the Government and the regulator, to consider greater reform of the energy market so that we can prioritise helping isolated communities. I want to highlight the excellent work of Citizens Advice and many other groups. In my constituency and, I am sure, in the right hon. Gentleman’s, energy costs are a big issue in the citizens advice bureau’s casework, because of the price of oil in rural constituencies.

There is an answer to the monopoly status of the transmission and distribution companies: greater competition from not-for-profit organisations that reinvest in infrastructure. Welsh Water is a not-for-profit organisation. It has competition within it, because it puts its contracts out to tender. It is not a monolithic public monopoly, but a not-for-profit organisation that values its customers first and foremost. I know that the Minister will refer to the Government review of transmission costs. We have not had a response to that yet. I will support the Bill, because I have been campaigning for it for years. I do not think it is a panacea in itself, but together we can help vulnerable and non-vulnerable customers who have been ripped off for too many years.

--- Later in debate ---

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I am very grateful to be called to say a few words in support of this useful piece of legislation, Mr Speaker. I was pleased to be asked by my hon. Friend the Member for Weston-super-Mare (John Penrose) in the early autumn to sign a letter with him to Ministers and the Prime Minister calling for this legislation to be brought forward. So I join him and others this afternoon who have given a strong cross-party welcome to the fact that we are here today debating the Second Reading of this important Bill.

I believe in a successful, strong, profitable energy industry. We need a successful industry, given the asks we are making of these companies in terms of our wider energy objectives. We are asking these companies to invest in new capacity—in resilience—to make sure that our lights stay on and to give us security of supply. We are also asking them to invest in decarbonisation efforts and do the heavy lifting in creating a low-carbon economy. We want them to do this all the time, while giving consumers the lowest possible prices. There is a duty on Government and on regulators here. When any piece of this industry—any of the individual markets that go towards creating this strong and successful industry—is not working perfectly, there is a duty to step in. That lies, first, with the regulator, but when it is slow to act, the duty then falls to Government. That is the point we have reached with this legislation today.

It is estimated that 23,000 consumers in my constituency are overpaying on their energy bills, by an average of around £275 per year, so the Bill will be strongly welcomed in Preseli Pembrokeshire. In fact, south Wales is estimated to be among the regions of the UK with the largest numbers of consumers overpaying for their energy.

With respect to the comments made by the hon. Member for Ynys Môn (Albert Owen), I wish to put on record that there is a group of energy consumers who will not be protected by the legislation: people who live in small, isolated rural communities and rely on off-grid liquefied petroleum gas or off-grid heating oil supplies. Over the years, concerns have been expressed repeatedly about how well the markets are functioning for those consumers. Those concerns perhaps go beyond the Bill’s immediate scope, but I urge the Minister to keep them on her radar and to ensure that those consumers get the full protection that they believe they should be entitled to.

I have some other concerns about the legislation. We are looking for a change in behaviour on the part of the supplying companies and on the part of consumers. Although the Bill is a necessary condition, it will not be the final answer to the challenges. We need energy companies to behave in a way that demonstrates that they really value their consumers. We have seen a lot of lazy, inefficient practices on the part of the big six and some excellent behaviours on the part of some of the emerging challenger companies. They have entered the market and had to scrap and fight for every single one of their customers, unlike the big six, which have largely inherited their customer load from the old nationalised system. The Bill will be a helpful stepping stone, but it will not be the final story in respect of prodding the big six to model some of the best behaviours we see in the industry.

In respect of consumers, we heard a great example earlier in the debate from my right hon. Friend the Member for New Forest West (Sir Desmond Swayne), who described his own experience of being able to benefit from being a switching customer. As so many Members have pointed out, the truth is that a great many consumers just do not behave like that at all. I think the Bill will be a helpful stepping stone to encourage more switching in the marketplace, but a wider body of work needs to be done, particularly for the most vulnerable, the disabled and the people who perhaps are not readily using the internet for a lot of their day-to-day consumer needs. We need to get them better engaged, so I encourage Ministers to keep that on their horizons.

We need to consider the ongoing support for the vulnerable. I agree with Citizens Advice that, after the sunset clause has been reached and the cap has been and gone, and when hopefully we have seen some positive reforms in the marketplace, there will still be an ongoing need for measures to protect the most vulnerable energy consumers. I would welcome the Minister’s thoughts on that. I wish her well as she takes the Bill through Committee. She has a lot of support from all parts of the House, but this debate has shown clearly that Ministers will need to address a number of specific concerns.

Oral Answers to Questions

Stephen Crabb Excerpts

Tuesday 30th January 2018 Commons Chamber

[Claire Perry]

The hon. Lady points out the very powerful fact that the Government can set policy and bring forward achievable targets, such as our renewables ambition, but we also need the private sector and private capital to be involved in financing this transition. I have numerous conversations with companies about what they are doing with their own investments and, equally, about what they will be doing to help other companies to invest in a more sustainable future. I refer her to the Powering Past Coal Alliance, which I launched with my Canadian counterpart last year and which is helping the world to get off the dirtiest form of fossil fuel heating.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Given that more than a year has now passed since the Hendry review reported on the potential contribution of tidal lagoon technology, when does my right hon. Friend think that Ministers will be able to respond positively to that report and give a green light to this important environmental technology?

[Claire Perry]

I am left in no doubt by my right hon. Friend and others about how anxious people are to see this review go forward. We want to get our future investment in renewable energies right. We continue to look very closely at this, and I hope that we will be able to inform the House shortly.