Browse content similar to 16/03/2017. Check below for episodes and series from the same categories and more!
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to be called only once, intervention should be questions that should be | :00:00. | :00:00. | |
brief, the front bench may take part in questioning. | :00:00. | :00:13. | |
I am grateful to the backbench business committee that providing | :00:14. | :00:18. | |
time they need to present our tenth report entitled Lesson Still To Be | :00:19. | :00:26. | |
Learned From The Chilcot Inquiry. The decision to invade Iraq has left | :00:27. | :00:31. | |
an indelible scorer in British politics. It continues to be as | :00:32. | :00:34. | |
controversial today as it was at the time, not least because it became | :00:35. | :00:38. | |
apparent after the invasion that it was to become a protracted and | :00:39. | :00:44. | |
bloody affair costing the lives of 179 UK servicemen and women as well | :00:45. | :00:50. | |
as those of our allies and thousands of people in Iraq. The consequences | :00:51. | :00:54. | |
of the decision to invade Iraq remain profound, not only for our | :00:55. | :01:01. | |
domestic politics but also for our foreign and Security policy and the | :01:02. | :01:05. | |
stability of the whole of the region. The Chilcot Inquiry was | :01:06. | :01:10. | |
established in 2009 to provide some closure to the controversy. This was | :01:11. | :01:17. | |
already far too late and I'm reminded that the House of Commons | :01:18. | :01:21. | |
first voted on the question of whether to have an inquiry in 2002 | :01:22. | :01:27. | |
on a conservative opposition motion. However for many of the length of | :01:28. | :01:32. | |
the inquiry that was established has itself become subject to extensive | :01:33. | :01:36. | |
criticism. Most of the reporting discussion of the Chilcot Inquiry | :01:37. | :01:42. | |
has been preoccupied with the substance of the decision to go to | :01:43. | :01:46. | |
war and its legality of what happened in the aftermath of the | :01:47. | :01:50. | |
invasion. Yet there are also less and still to be learned regarding | :01:51. | :01:53. | |
the machinery of Government and how it operated and regarding the | :01:54. | :01:57. | |
conduct of public enquiries and this is what they agreed to focus on. The | :01:58. | :02:08. | |
report launched today examines the extent to which Government -- | :02:09. | :02:11. | |
Government and decision-making was sidelined by the run-up to the Iraq | :02:12. | :02:22. | |
war. Significant decisions on Iraq pre-conflict were taken without | :02:23. | :02:27. | |
sufficient consultation of Cabinet colleagues. Chilcott concludes there | :02:28. | :02:30. | |
were 11 decision points prior to the invasion on which and I quote there | :02:31. | :02:34. | |
should have been collective discussion by Cabinet committee or | :02:35. | :02:39. | |
small group of ministers on the basis of interdepartmental advice | :02:40. | :02:43. | |
agreed at a senior level between officials. A worrying finding of | :02:44. | :02:52. | |
PACAC's report is a future Prime Minister can override the procedures | :02:53. | :02:56. | |
of collective decision-making without obstacle. Beyond making | :02:57. | :03:00. | |
representations to ministers, and the Prime Minister and to the Prime | :03:01. | :03:05. | |
Minister, short of resignation, Cabinet Secretary does not have any | :03:06. | :03:10. | |
formal recourse to object if the Prime Minister chooses to disregard | :03:11. | :03:13. | |
the procedures and decision-making as set out in the Cabinet manual. | :03:14. | :03:19. | |
PACAC is in no doubt that this absence of safeguards cannot persist | :03:20. | :03:23. | |
and this leads to our most important conclusion in this report. We | :03:24. | :03:29. | |
therefore recommend in line with the proposal from the better Government | :03:30. | :03:33. | |
initiative, that the Cabinet Secretary and or senior officials, | :03:34. | :03:38. | |
should be able to acquire a formal letter of direction if they are | :03:39. | :03:41. | |
being instructed to carry out the wishes of the Prime Minister | :03:42. | :03:46. | |
disregarding the normal procedures set out in the Cabinet mandate. This | :03:47. | :03:51. | |
was both safeguarding the independence and clarify the | :03:52. | :03:57. | |
responsibility. It would make clear to ministers the vital importance of | :03:58. | :04:01. | |
following proper procedures. The second key finding of PACAC's report | :04:02. | :04:07. | |
relates to the establishment role and conduct of the Chilcot Inquiry | :04:08. | :04:11. | |
itself and builds on the work of PACAC's predecessor which carried | :04:12. | :04:18. | |
out a number of enquiries into the conduct of the public enquiries. It | :04:19. | :04:23. | |
recommends in future before and inquiry is established, Parliament | :04:24. | :04:26. | |
should set up an ad hoc Select Committee to take conclusions and | :04:27. | :04:32. | |
recommendations to the House. There should then be a full debate and | :04:33. | :04:36. | |
vote in parliament on an amendable motion setting out the precise terms | :04:37. | :04:42. | |
of reference and an estimated time frame and a proposed budget for that | :04:43. | :04:45. | |
inquiry. This should ensure expectations are much clearer at the | :04:46. | :04:53. | |
outset of an inquiry. To has not sought to reopen all the issues | :04:54. | :04:57. | |
explored by Chilcott, nor has it explored whether Parliament was | :04:58. | :05:01. | |
misled by the then Prime Minister, The Right Honourable Tony Blair. By | :05:02. | :05:05. | |
highlighting what the Chilcot Inquiry revealed about the | :05:06. | :05:09. | |
weaknesses in the Government's decision-making procedures and by | :05:10. | :05:11. | |
exploring what lessons can be learned from the Chilcot Inquiry, I | :05:12. | :05:17. | |
hope we can ensure the process of plays that may enable such | :05:18. | :05:21. | |
controversies to be avoided in future. I commend the report of the | :05:22. | :05:34. | |
House. On Iraq, the British Cabinet, the overwhelming majority of this | :05:35. | :05:37. | |
house, much of the media, the three Select committees, the civil | :05:38. | :05:42. | |
service, security services or came to the same false conclusion | :05:43. | :05:46. | |
resulting in a disastrous military adventure and the death of hundreds | :05:47. | :05:50. | |
of thousands of people. There has been the usual unpredictable | :05:51. | :05:56. | |
procrastination, prevarication and Ops location which has failed to | :05:57. | :05:59. | |
reveal the truth to the British people as to what happened. The | :06:00. | :06:04. | |
Select Committee is clear the Chilcott report has failed to allow | :06:05. | :06:08. | |
them of the committee, to ask questions as to whether Parliament | :06:09. | :06:12. | |
was deliberately misled leaving a gaping chasm right in the heart of | :06:13. | :06:17. | |
the credibility of the British establishment. What a damning | :06:18. | :06:22. | |
judgment after all these years. I welcome the recommendations in | :06:23. | :06:26. | |
today's report and the independence of the Cabinet Secretary the frankly | :06:27. | :06:31. | |
I see those recommendations are timid. Does the chair and his Select | :06:32. | :06:39. | |
Committee agree with me that it will require root and branch | :06:40. | :06:42. | |
transformative change in the whole of our political structures and | :06:43. | :06:46. | |
culture before we can answer say again to the British people that | :06:47. | :06:53. | |
there will never be such a failure? I am grateful to the right on the | :06:54. | :07:03. | |
wooden man for his question. I voted for the Iraq invasion and I still | :07:04. | :07:06. | |
don't know whether I would have voted the same way had we known much | :07:07. | :07:10. | |
more about it. I think the really salient part of that is the lack of | :07:11. | :07:17. | |
preparation and I would not have voted had I thought that there had | :07:18. | :07:21. | |
been so little preparation. I think the jury is still out on whether in | :07:22. | :07:27. | |
the long-term the invasion of Iraq will have been of benefit the global | :07:28. | :07:32. | |
peace and security. On the question of whether Parliament was | :07:33. | :07:36. | |
deliberately misled, we just did not feel qualified to make that judgment | :07:37. | :07:44. | |
and we do not have the procedures and their were with all to conduct a | :07:45. | :07:53. | |
fair trial of the fax there would need to be a very different kind of | :07:54. | :07:57. | |
committee with very different judicial procedures to do that. We | :07:58. | :08:02. | |
do suggest that have to be prepared to do that if further facts and | :08:03. | :08:08. | |
information emerges but on that point, Sir John Chilcott was clear | :08:09. | :08:15. | |
he did not hold the former Prime Minister culpable of deliberately | :08:16. | :08:20. | |
misleading the House. We have to accept that view. I would just add | :08:21. | :08:28. | |
that are our recommendations timid? They are limited to what we felt | :08:29. | :08:32. | |
able to make recommendations about. Whatever structures and however you | :08:33. | :08:37. | |
organise your politics, I'm afraid they're always going to be occasions | :08:38. | :08:42. | |
when things go wrong and I don't think any constitutional structure | :08:43. | :08:45. | |
can protect us from that though I think we have made recommendations | :08:46. | :08:48. | |
that would prevent certain things happen again. Being a member of this | :08:49. | :08:57. | |
Select Committee myself, I also come at it from a similar position as my | :08:58. | :09:02. | |
honourable friend who chairs the committee with such distinction. I | :09:03. | :09:06. | |
think it is reflected in the calibre of this report. I had my doubts | :09:07. | :09:11. | |
whether my vote would have been different had we had more facts but | :09:12. | :09:15. | |
again we take our votes in this house on facts that are presented to | :09:16. | :09:19. | |
us and then we move forward. We don't get our time over again to | :09:20. | :09:26. | |
relive our votes. In the report, one of the concerns that we were able to | :09:27. | :09:33. | |
cover of the length of time and the unacceptable delays associated with | :09:34. | :09:37. | |
its report. The Cabinet Secretary indicated the Government would | :09:38. | :09:41. | |
consider further the question of how the Iraq enquiry could have been | :09:42. | :09:45. | |
carried out more quickly. We have urged that this assessment comes as | :09:46. | :09:48. | |
a matter of urgency and I wondered if my honourable friend had any | :09:49. | :09:52. | |
indication as to the timescale on this or are we going to be waiting | :09:53. | :09:56. | |
for it over a longer period of time as we did for the inquiry itself? We | :09:57. | :10:05. | |
have until 35 minutes past to keep the answers completed. I thank her | :10:06. | :10:18. | |
for her participation and the contribution to this inquiry. The | :10:19. | :10:24. | |
answer is we are making recommendations. I very much doubt | :10:25. | :10:30. | |
the Government is going to like them because it would limit their control | :10:31. | :10:34. | |
over the process. Most governments establish public enquiries to look | :10:35. | :10:40. | |
at issue is not open them up. A report is as much addressing what | :10:41. | :10:45. | |
the House must take control of in order to make sure the inquiry is | :10:46. | :10:58. | |
conducted better in future. The jury has been delivered and the former | :10:59. | :11:02. | |
Prime Minister has been indicted and rightfully so. I would have liked to | :11:03. | :11:11. | |
have seen more per RA -- formal devices. I congratulate them on the | :11:12. | :11:16. | |
device of letter of direction. This is similar to financial direction. | :11:17. | :11:22. | |
Perhaps you could say more about that and why he thinks it will be | :11:23. | :11:26. | |
effective in avoiding the total absolute breakdown of collective | :11:27. | :11:30. | |
responsibility which was identified in the Chilcott report. The second | :11:31. | :11:34. | |
is Parliamentary accountability where the committee hasn't been able | :11:35. | :11:42. | |
to make as much progress. If someone like the previous Prime Minister | :11:43. | :11:46. | |
says one thing to be American President and something else or | :11:47. | :11:50. | |
doesn't say something to the House of Commons is misleading. You can | :11:51. | :12:03. | |
set up a series of enquiries -- inquries or you can spin it out to | :12:04. | :12:07. | |
get a big enough remit and people ask why we are we going over it? | :12:08. | :12:15. | |
There is no effective Parliamentary accountability and what I would like | :12:16. | :12:19. | |
to ask the committee chair is can he see that the nature of Parliamentary | :12:20. | :12:24. | |
accountability and our responsibility can be effected in | :12:25. | :12:27. | |
his committee report of a mechanism produced so we have the obligation | :12:28. | :12:33. | |
to take forward what our constituents demand and that is to | :12:34. | :12:36. | |
hold any Prime Minister who behaves in the way of the previous minister | :12:37. | :12:43. | |
to account in a proper and Timmy us fashion? The letter of direction | :12:44. | :12:47. | |
shouldn't be a controversial matter because we already have it in our | :12:48. | :12:52. | |
procedures with regard to financial matters. One or two former Cabinet | :12:53. | :13:03. | |
secretaries are in support of it. It doesn't interfere with this | :13:04. | :13:07. | |
substance of policy. It is Millie making sure proper processes covered | :13:08. | :13:11. | |
and what we recommend is not that the list of direction might be at a | :13:12. | :13:16. | |
sensitive time a sensitive issue, it should be made automatically public | :13:17. | :13:20. | |
but we should recommend it should be made privately available at the | :13:21. | :13:26. | |
choice of the Cabinet Secretary or to members of the Privy Council to | :13:27. | :13:31. | |
the Leader of the Opposition. It is another lever for a Cabinet | :13:32. | :13:36. | |
Secretary TQ is to secure their independence and to secure the | :13:37. | :13:39. | |
proper process that Prime have agreed to in principle set down in | :13:40. | :13:44. | |
the Cabinet manual. On the question of Parliamentary accountability and | :13:45. | :13:48. | |
the Prime Minister, it remains open to this house to set up a special | :13:49. | :13:53. | |
Select Committee, privilege committee, to establish proper | :13:54. | :13:56. | |
procedures, to provide fair representation that the prosecution | :13:57. | :14:01. | |
and the defence but this will be a complete new procedure. Nothing like | :14:02. | :14:05. | |
this has been done in the era when we expect natural justice to be | :14:06. | :14:09. | |
carried out to higher standards. We cannot have MPs who have known views | :14:10. | :14:15. | |
on these issues, acting as some kangaroo court to Varane a former | :14:16. | :14:22. | |
Prime Minister. It wouldn't do this house any good. With regards to the | :14:23. | :14:31. | |
inquries, the Secretary of State for culture, media and sport is we are | :14:32. | :14:35. | |
considering whether to reconvene the Levenson enquiry which has set fire | :14:36. | :14:41. | |
50 months at a cost of millions of pounds. I wonder what advice he | :14:42. | :14:46. | |
would give to the Secretary of State. I would suggest, as perhaps | :14:47. | :14:52. | |
should have been done with the child sex abuse inquiry, ask for a | :14:53. | :14:59. | |
committee to be set up, let's have an inquiry into the inquiry before | :15:00. | :15:04. | |
you get stuck on the tram lines of legality and appointing people. Look | :15:05. | :15:13. | |
before you leap, is the answer. Access that Government should not be | :15:14. | :15:18. | |
able to establish inquries to get them out of difficulties. The House | :15:19. | :15:21. | |
should be here to assist the scrutiny and here to oversee an | :15:22. | :15:27. | |
inquiry is conducted in a timely fashion. | :15:28. | :15:33. | |
I am a member of the Select Committee and supported the | :15:34. | :15:42. | |
publication report, but it was not in a spirit of enthusiasm. I have | :15:43. | :15:47. | |
some unease in a few phrases in the report which were subsequently | :15:48. | :15:51. | |
corrected. In particular would he agree that we have inserted the | :15:52. | :15:54. | |
possibility of a further enquiry, but not by Select Committee, but | :15:55. | :16:00. | |
possibly by others if the evidence comes to light? I personally believe | :16:01. | :16:07. | |
we were misled by the then Prime Minister on weapons of mass | :16:08. | :16:11. | |
destruction and the pretext of war. I was one of the 139 Labour MPs who | :16:12. | :16:16. | |
voted against the war and I stand by that decision and some of the unease | :16:17. | :16:23. | |
was expressed by my honourable friend on the front bench as well. I | :16:24. | :16:27. | |
wonder if the chairman would accept that I expressed some unease at the | :16:28. | :16:34. | |
time, in particular further enquiries in future might be | :16:35. | :16:42. | |
worthwhile. I am grateful to the honourable gentleman and he has been | :16:43. | :16:46. | |
a trooper on this committee for a very long number of years. I do | :16:47. | :16:53. | |
accept this was a difficult enquiry to agree on, though because we were | :16:54. | :16:58. | |
concentrating on process and procedures rather than the substance | :16:59. | :17:02. | |
of the issues, we had to accept some of the turn of the anxiety that so | :17:03. | :17:07. | |
many people feel about this issue in our draft. I hope he felt able and | :17:08. | :17:13. | |
comfortable to support this enquiry because the recommendations he fully | :17:14. | :17:16. | |
supports and I am grateful to him for that. Does my honourable friend | :17:17. | :17:26. | |
agree that the overriding lesson that most people will think we can | :17:27. | :17:30. | |
learn from the Chilcott enquiry is that these reports take too long and | :17:31. | :17:40. | |
cost too much? It is an extraordinarily thorough piece of | :17:41. | :17:46. | |
work, this enquiry. I think Chilcott should be commended for what he | :17:47. | :17:50. | |
achieved and the detail he went into and the seriousness with which he | :17:51. | :17:55. | |
approached it, but it was not what the public initially expected. When | :17:56. | :17:59. | |
you think the enquiry into the Crimean War which in some respects | :18:00. | :18:03. | |
was a far bigger disaster and was conducted in the space of a few | :18:04. | :18:06. | |
months, I think that is what the public hope for. There were various | :18:07. | :18:18. | |
top-level things. There is a tremendous sense of obligation to | :18:19. | :18:22. | |
provide people with fairness in enquiries which perhaps did not | :18:23. | :18:26. | |
exist after the Crimean War, but I do think we need to set down | :18:27. | :18:30. | |
parameters for this kind of enquiry and that is what a Select Committee | :18:31. | :18:37. | |
would do if it studied the enquiry before it was set up. I listened | :18:38. | :18:44. | |
with interest to what the honourable gentleman had to say. It is only by | :18:45. | :18:50. | |
accident that I found this discussion was taking place right | :18:51. | :18:55. | |
now and I have not read your report, but I have heard your statement and | :18:56. | :19:01. | |
I have listened with interest and I think nobody would disagree with due | :19:02. | :19:07. | |
process. I sent out a Twitter message two hours ago which said our | :19:08. | :19:13. | |
thoughts are with the victims and survivors of Saddam Hussain | :19:14. | :19:18. | |
genocidal campaign 28 years ago to this day. That is one of the reasons | :19:19. | :19:25. | |
I and many others and the majority in this house voted for the war. I | :19:26. | :19:30. | |
am most grateful to the right honourable lady and her kind | :19:31. | :19:36. | |
intervention. If I may say so, that is one of the reasons I think it is | :19:37. | :19:41. | |
important for us to make these statements because you engage more | :19:42. | :19:45. | |
members. I regard this as a very serious piece of work with some very | :19:46. | :19:50. | |
serious recommendations. I regard it as a piece of work that can be | :19:51. | :19:56. | |
embraced by right honourable members of all views on the original | :19:57. | :20:01. | |
conflict as a better way of making decisions in this government and as | :20:02. | :20:04. | |
a better way of conducting public enquiries. As a member of this | :20:05. | :20:10. | |
committee I would like to point out that Chilcott was there to identify | :20:11. | :20:15. | |
mistakes which led to the loss of life, military and civilian. Seven | :20:16. | :20:20. | |
years to come to conclusion is unacceptable. Those mistakes could | :20:21. | :20:24. | |
have been repeated during that timescale. However, the committee | :20:25. | :20:28. | |
wants to point out the Iraq inquiry reported that the Blair government | :20:29. | :20:31. | |
did not expose key policy decisions to regular review and cabinet was | :20:32. | :20:39. | |
when asked to confirm the decision that the diplomatic process was at | :20:40. | :20:43. | |
an end and the House of commons should have been asked. Given the | :20:44. | :20:49. | |
gravity of this decision the cabinet should have been made aware of the | :20:50. | :20:55. | |
legal uncertainties. It would appear to be that the evidence provided to | :20:56. | :21:00. | |
the Cabinet was designed to produce the result that the then Prime | :21:01. | :21:07. | |
Minister was looking for. I think that is an accurate comment and I am | :21:08. | :21:10. | |
also grateful to the honourable gentleman for his contribution to | :21:11. | :21:16. | |
the committee and this report. But it cuts both ways. The Cabinet went | :21:17. | :21:20. | |
along with being sidelined and Chilcott was quite clear about that. | :21:21. | :21:25. | |
There were plenty ministers in the Cabinet who were quite content to | :21:26. | :21:29. | |
make and to let others make decisions when they could have been | :21:30. | :21:34. | |
consulted. We address had the legal advice was taken and explored by the | :21:35. | :21:39. | |
Cabinet as well and we make recommendations about that. Our | :21:40. | :21:43. | |
proposals would make it clear what Cabinet ministers can expect and are | :21:44. | :21:48. | |
entitled to expect. It is not a favour to ask of the Prime Minister, | :21:49. | :21:54. | |
it is part of a proper procedure of Cabinet government. We have a | :21:55. | :21:57. | |
constitutional Cabinet government and that is what will be reinforced | :21:58. | :22:02. | |
by these proposals. I am also a member of the committee but I am not | :22:03. | :22:06. | |
supporting this report because I believe it has been interpreted by | :22:07. | :22:10. | |
the press as an act of absolution for the previous Prime Minister | :22:11. | :22:16. | |
involved and the others who were culpable and being led by him, | :22:17. | :22:20. | |
principally the three select committees of this house. This was | :22:21. | :22:24. | |
the worst blunder this house committed since sending troops into | :22:25. | :22:28. | |
the sewers war. We should be objective in dealing with our own | :22:29. | :22:34. | |
blunders and this report, whilst it has many merits, it does not deal | :22:35. | :22:38. | |
with the truth of the time, that we were led into an avoidable war by a | :22:39. | :22:48. | |
man of vanity whose messianic rule misled this house in a very serious | :22:49. | :22:52. | |
way. The honourable gentleman's report does contain the evidence and | :22:53. | :23:02. | |
there I two interpretations of the evidence before Chilcott and won the | :23:03. | :23:06. | |
report suggests that should be referred might lead us to a | :23:07. | :23:10. | |
conclusion that we did go to a war in vain. Of course we must remember | :23:11. | :23:18. | |
the principal need here and that is to avoid sending other soldiers into | :23:19. | :23:23. | |
war in future because of the vanity of this house, of the inflexibility | :23:24. | :23:26. | |
of this house in making fair judgments. We have that | :23:27. | :23:31. | |
responsibility. If we do not condemn the errors of the past, we are | :23:32. | :23:37. | |
responsible for them. I am grateful to the honourable gentleman for his | :23:38. | :23:41. | |
work to the committee and I respect we differed on this report and I | :23:42. | :23:46. | |
appreciate the emphasis he want to make by declining to support this | :23:47. | :23:51. | |
report. But it is open to this house at any time to reflect any matter to | :23:52. | :23:56. | |
the committee privileges and there is a procedure for doing that and if | :23:57. | :24:00. | |
he thinks there is a case for doing that, he should try and implement | :24:01. | :24:06. | |
that procedure. But I think the difficulty is, as the Chilcott | :24:07. | :24:11. | |
enquiry is self-centred, that there are two interpretations about this | :24:12. | :24:15. | |
and there is nothing definitive in terms of evidence to suggest there | :24:16. | :24:19. | |
was culpability in that the former Prime Minister deliberately sought | :24:20. | :24:24. | |
to mislead the House. I think there are a lot of lessons to be learned, | :24:25. | :24:29. | |
not least if I may say as an aside, that when it comes to a decision | :24:30. | :24:32. | |
like this for the House to make an informed decision, it relies | :24:33. | :24:38. | |
entirely on what government tells it. We are in a new era where the | :24:39. | :24:42. | |
House is consulted about these things when it never used to be. We | :24:43. | :24:46. | |
used to have rather more retrospective accountability for | :24:47. | :24:51. | |
these matters rather than forward accountability and I question | :24:52. | :24:55. | |
whether that works. I do not think is of commons is competent to make | :24:56. | :24:58. | |
strategic judgments on the spur of the moment in the heat of a crisis | :24:59. | :25:02. | |
in the same way that a government should be. As a new member in 2015 I | :25:03. | :25:09. | |
was struck by the Chilcott experience and the unacceptable | :25:10. | :25:14. | |
delay. But as taking decisions in this place is the honourable | :25:15. | :25:18. | |
gentleman just said, we want to take educated decisions based on | :25:19. | :25:23. | |
evidence. But more so for the families of the soldiers who died it | :25:24. | :25:31. | |
was unacceptable. Can I ask him about the recommendations he made | :25:32. | :25:35. | |
about a more strict re-met and timing for such enquiries? How can | :25:36. | :25:41. | |
we take that forward in this house? Do we need to have a vote on it or | :25:42. | :25:46. | |
is it the gift of the government to do so or not do so? Ultimately it is | :25:47. | :25:52. | |
in the hands of this has, subject to whipping and all the pressures put | :25:53. | :25:56. | |
on this house, but in the end it is in the hands of this has to decide | :25:57. | :26:01. | |
how and enquiry is conducted. If they do not like it, we can stop it | :26:02. | :26:06. | |
because we are a sovereign house. But I agree, the length of time this | :26:07. | :26:12. | |
took was unacceptable. Not only did it undermine the credibility of the | :26:13. | :26:17. | |
enquiry itself, it actually undermined the very confidence in | :26:18. | :26:20. | |
public institutions that the inquiry was intended to restore. It did not | :26:21. | :26:26. | |
serve the purpose that this house might have wanted it to serve | :26:27. | :26:30. | |
because it took so long and it was a grievous torture for those who lost | :26:31. | :26:35. | |
life and limb and the families of the bereaved. We come to the second | :26:36. | :26:46. | |
committee statement which will follow the same procedure as the | :26:47. | :26:52. | |
previous one. Sarah Wollaston. The scale of the bottom or loss of life | :26:53. | :26:57. | |
from suicide is unacceptable. 4820 people in England took their own | :26:58. | :27:08. | |
lives in 2015 and across the UK 6122 in 2014. But these official figures | :27:09. | :27:14. | |
underestimate the true scale of the devastating loss from suicide. It | :27:15. | :27:19. | |
remains the leading cause of death in young people between the ages of | :27:20. | :27:24. | |
15 and 24, and it is the leading cause of death in men under 50. It | :27:25. | :27:29. | |
is strongly linked to deprivation and a major contributor to health | :27:30. | :27:36. | |
inequality. But the key message we heard throughout our inquiry is that | :27:37. | :27:40. | |
suicide is preventable and there is far more that we can and should be | :27:41. | :27:44. | |
doing to make sure that we reduce that. That was the key focus for our | :27:45. | :27:51. | |
enquiry from the Health Select Committee into preventing suicide. I | :27:52. | :27:56. | |
would like to thank all of those who contributed to the inquiry, | :27:57. | :28:00. | |
particularly those who are from families bereaved by suicide and | :28:01. | :28:05. | |
those who themselves had experienced suicidal tendencies and who had used | :28:06. | :28:12. | |
the mental health services. Their evidence was courageous and | :28:13. | :28:14. | |
compelling. I would like to thank all those voluntary groups working | :28:15. | :28:19. | |
out there, and the volunteers, to provide support for people in crisis | :28:20. | :28:23. | |
and to all our front-line staff. I would like to thank my fellow | :28:24. | :28:27. | |
committee members and our committee staff. Moving on to what we found in | :28:28. | :28:39. | |
our inquiry, first of all, we welcome the government was back | :28:40. | :28:43. | |
suicide prevention strategy, but part of any strategy, the key is | :28:44. | :28:47. | |
implementation. We call on the government to go far further in | :28:48. | :28:52. | |
implementing the strategy and to re-sourcing it and to give greater | :28:53. | :28:55. | |
attention to the workforce in order to make the very important | :28:56. | :29:01. | |
considerations come forward. We also make further recommendations in that | :29:02. | :29:05. | |
we were disappointed in a number of areas in that the government has not | :29:06. | :29:09. | |
gone further. We know there are things we can do to reduce suicide | :29:10. | :29:13. | |
and there are a number of these we highlight in our report. Half of | :29:14. | :29:17. | |
those who take their own lives have self harmed and we feel it is really | :29:18. | :29:23. | |
disappointing that so many of those with experience of self harm, their | :29:24. | :29:30. | |
experience when they go to casualty departments means sometimes they are | :29:31. | :29:33. | |
made to feel they are wasting people's time. We know psychiatry | :29:34. | :29:39. | |
makes an enormous difference, but there are issues with liaising and | :29:40. | :29:47. | |
psychiatry. Patients should receive a visit within three days of leaving | :29:48. | :29:51. | |
inpatient services, but there simply are not the resources for that to be | :29:52. | :29:56. | |
put into place. We call on the government to go further in looking | :29:57. | :29:59. | |
at the workforce and resizing for this to take place. | :30:00. | :30:05. | |
We know, as well, that there are serious issues in that around one | :30:06. | :30:11. | |
third of people who take their own lives are not in contact with | :30:12. | :30:16. | |
primary care or specialist services in the year of their death. Suicide | :30:17. | :30:22. | |
is everyone's business, we all have a responsibility to reduce the | :30:23. | :30:26. | |
stigma around mental health and make it easier for people to seek help. I | :30:27. | :30:31. | |
pay tribute to all of those working in this field reaching out to those | :30:32. | :30:37. | |
in non-health settings and making a real difference. Many of those | :30:38. | :30:49. | |
voluntary groups are coming under great financial pressure. We know | :30:50. | :30:51. | |
that it is welcome that the government has announced that there | :30:52. | :30:53. | |
will be 5 million for suicide prevention but this doesn't come on | :30:54. | :30:57. | |
until next year and we feel this is too little too late. Particularly in | :30:58. | :31:02. | |
the context of cuts to public health grounds and the cuts that we know | :31:03. | :31:06. | |
are happening in local authorities and with services that can reach out | :31:07. | :31:11. | |
to those vulnerable to suicide. We die to see the government give a | :31:12. | :31:14. | |
greater focus to adequately resourcing the measures they set out | :31:15. | :31:19. | |
in their rooms so his side prevention strategy. Particularly, | :31:20. | :31:23. | |
look at how those plans are implemented. It is welcome that 95% | :31:24. | :31:29. | |
of local authorities have a suicide prevention plan in place or in | :31:30. | :31:33. | |
development but there doesn't seem to be sufficient quality assurance | :31:34. | :31:37. | |
about those plans so what we would all like to see is a national | :31:38. | :31:42. | |
implementation board looking at how we can move these plans forward. | :31:43. | :31:50. | |
However good the strategy, if it is not implemented cannot be effective. | :31:51. | :31:57. | |
That was one of the key messages we heard from witnesses and I know that | :31:58. | :32:00. | |
the Minister will have heard that from the National suicide prevention | :32:01. | :32:07. | |
advisory board, very loud and clear. There are also things that we no | :32:08. | :32:11. | |
need to happen when people are in contact with services. It is | :32:12. | :32:16. | |
disappointing there hasn't been greater focus upon the consensus for | :32:17. | :32:25. | |
information sharing. There are too many occasions on which the first | :32:26. | :32:31. | |
people here that a loved one has taken their own life happening at | :32:32. | :32:37. | |
that point. Subsequently, it is found out that their relatives had | :32:38. | :32:44. | |
been in touch with services but no one had let them know. There are | :32:45. | :32:50. | |
issues of consensual OT and consent but if you ask people in the right | :32:51. | :32:55. | |
way they are much more likely to give that consent to information | :32:56. | :32:59. | |
sharing and we would like to see the government putting greater focus on | :33:00. | :33:04. | |
how we can increase awareness of how health professionals share | :33:05. | :33:06. | |
information with people's loved ones. We believe that will save | :33:07. | :33:12. | |
lives. Across the board, there measures that can be taken, both out | :33:13. | :33:18. | |
in the community and in health care settings, and in specialist | :33:19. | :33:20. | |
settings, but the minister will know that we also look at the role of the | :33:21. | :33:27. | |
media because irresponsible reporting of suicide rates. We know | :33:28. | :33:32. | |
this. There is far more that can be done within the broadcast media, | :33:33. | :33:37. | |
mainstream media, social media and the Internet to make sure that we | :33:38. | :33:43. | |
save lives. I was very pleased that the Secretary of State has agreed to | :33:44. | :33:49. | |
meet. I hope the Minister will liaise with them to ensure that we | :33:50. | :33:53. | |
can save lives in that way. Finally, the issue of data. There is an | :33:54. | :34:03. | |
increasing use of narrative verdict is that our hard to code. The | :34:04. | :34:08. | |
official data does under represent the true scale of the avoidable loss | :34:09. | :34:14. | |
of life. The issue is that because we have huge variation around the | :34:15. | :34:18. | |
country it makes it much more difficult to understand what works | :34:19. | :34:22. | |
best in preventing suicide. We would like the Minister to revisit the | :34:23. | :34:29. | |
recommendations on our report about how we provide better training to | :34:30. | :34:36. | |
coroners and how we also review the evidential standard and move from | :34:37. | :34:40. | |
beyond reasonable doubt to the balance of probability in recording | :34:41. | :34:43. | |
suicide because only in that way can we make sure that we are doing | :34:44. | :34:48. | |
absolutely everything possible to protect families and individuals in | :34:49. | :34:52. | |
the future. So, I commend this report on suicide prevention to the | :34:53. | :34:56. | |
house and call on the government to go further in implementation will | :34:57. | :35:07. | |
stop thank you. Can I say first that labour welcomes the recommendations | :35:08. | :35:17. | |
in this report. The committee visited the award-winning Salford | :35:18. | :35:24. | |
liaison team, a team which has halved admission rates of people | :35:25. | :35:30. | |
with mental health problems. The Royal College of psychiatrists | :35:31. | :35:32. | |
reminds us that only half of services provide liaison services 20 | :35:33. | :35:38. | |
47 and they said it would be difficult to recruit enough staff to | :35:39. | :35:43. | |
provide a liaison psychiatry service in every hospital. The honourable | :35:44. | :35:47. | |
lady touched on that in her statement. Can she say what she | :35:48. | :35:52. | |
thinks the government must do to insure there are enough trained | :35:53. | :35:57. | |
staff to ensure there are sustained liaison psychiatry services in every | :35:58. | :36:00. | |
Acute Hospital to help deliver the strategy. We need to start right | :36:01. | :36:08. | |
back at medical school recruitment and what happens in medical school | :36:09. | :36:12. | |
and beyond to encourage more health pressure -- professionals to | :36:13. | :36:21. | |
consider psychiatry and mental health services as a career. One of | :36:22. | :36:27. | |
the key issues is the lack of a workforce. The government is trying | :36:28. | :36:31. | |
to improve and work with health education England to improve this | :36:32. | :36:35. | |
but we would like to see them go further and looking at resource is | :36:36. | :36:38. | |
really need to make sure that resources get to the front line. Can | :36:39. | :36:45. | |
I congratulate the honourable lady on her chairmanship of the committee | :36:46. | :36:51. | |
and the recent report. She will know that recent studies, particularly in | :36:52. | :36:56. | |
Sweden, have indicated that people with- shunning autism spectrum have | :36:57. | :37:02. | |
ninefold increase in suicide risk. Could she say something about what | :37:03. | :37:08. | |
more could be done to help these individuals and their families and | :37:09. | :37:12. | |
how we raise awareness with those who intervene with this group so | :37:13. | :37:17. | |
they are aware with this group of the problems. I would congratulate | :37:18. | :37:26. | |
the honourable lady for what she has done in her whole career in | :37:27. | :37:31. | |
highlighting the problems of autism and the families involved. The key | :37:32. | :37:37. | |
thing is to have an assessment in the first place, too often people | :37:38. | :37:43. | |
with autism fall between the gaps in the health service. That would be my | :37:44. | :37:47. | |
key message around making sure that they receive the services and | :37:48. | :37:50. | |
support they need and it is delivered in the right way. I would | :37:51. | :37:58. | |
congratulate the honourable member for Totnes in bringing this critical | :37:59. | :38:04. | |
issue to the house and speak in full support of this paper. I declare an | :38:05. | :38:11. | |
interest in the patron of Chris's House, the first 24-hour | :38:12. | :38:18. | |
interventionist suicide support service in Scotland. We set up to | :38:19. | :38:23. | |
offer a safe environment where people in crisis may have respite | :38:24. | :38:28. | |
from their current and wellness by finding refuge in Chris's house and | :38:29. | :38:34. | |
providing an individually tailored programme to offer support and | :38:35. | :38:37. | |
respite throughout their journey to well-being. I would urge others | :38:38. | :38:44. | |
across the UK to look at this more interventionist model and replicated | :38:45. | :38:50. | |
to the benefit of all UK citizens. I would urge all to joiners on the | :38:51. | :38:57. | |
26th of May in Glasgow as we walk from that list to light to raise | :38:58. | :39:03. | |
awareness of suicide prevention. I thank the honourable gentleman and | :39:04. | :39:09. | |
join him in pain should be to voluntary groups doing extraordinary | :39:10. | :39:12. | |
work to reach out to people in crisis. One of the key issues is the | :39:13. | :39:18. | |
level of variation in this kind of support and the financial challenge | :39:19. | :39:21. | |
that people face around the UK in supporting them properly. Can I also | :39:22. | :39:29. | |
thank my honourable friend very much indeed for the work that she and her | :39:30. | :39:34. | |
committee have done on this issue. The suicide rate among men is three | :39:35. | :39:40. | |
times that of that among women and that gap has increased since 1981. | :39:41. | :39:46. | |
It is the leading cause of death for men under the age of 50. One | :39:47. | :39:52. | |
particular problem is that of contagion where one suicide can lead | :39:53. | :39:55. | |
to a state of others within the same area. Does my honourable friend and | :39:56. | :40:03. | |
her committee Turing the enquiry identify how this particular aspect | :40:04. | :40:08. | |
could be dealt with? -- during the enquiry. We did mention this | :40:09. | :40:16. | |
specifically in the report. He will know that part of this is | :40:17. | :40:19. | |
irresponsible reporting that leads to this, we also know that where | :40:20. | :40:27. | |
local areas work closely together to identify suicides and identify | :40:28. | :40:30. | |
particularly where there are early clusters, there are measures that | :40:31. | :40:35. | |
can be taken to go into workplaces, schools, and colleges to provide | :40:36. | :40:38. | |
support and stop this but it does require noticing early. So we urge | :40:39. | :40:45. | |
coroners to work with local authorities and public health teams | :40:46. | :40:49. | |
to ensure they are aware of the high risk of this spreading. Many thanks. | :40:50. | :40:57. | |
I'd like to thank the committee and honourable lady for their report and | :40:58. | :41:03. | |
welcomed the recommendations in particular that we should commit to | :41:04. | :41:08. | |
rolling out crisis intervention teams and efforts to prevent suicide | :41:09. | :41:14. | |
so that people can be followed up directly. Suicidal individuals are | :41:15. | :41:19. | |
not always mentally ill and awaiting treatment and attendance at urgency | :41:20. | :41:27. | |
are are not always relevant. I would like to ensure liaison between | :41:28. | :41:33. | |
services because only when this occurs in a seamless way between | :41:34. | :41:37. | |
health, community services and criminal justice will we prevent | :41:38. | :41:41. | |
suicidal individuals from falling between the gaps. Thank you for | :41:42. | :41:50. | |
highlighting that important point about communication within families | :41:51. | :41:53. | |
and within services. One of the problems can be that you have what | :41:54. | :41:57. | |
happens in local authorities and what happens in the health service | :41:58. | :42:01. | |
and too often there is insufficient communication between the two. I | :42:02. | :42:10. | |
congratulate the honourable lady on her work and that of the select | :42:11. | :42:15. | |
committee. In the mid-to thousands there was a series of tragic | :42:16. | :42:19. | |
suicides in the Bridgend area that forms part of my constituency. I | :42:20. | :42:24. | |
wasn't a member of this house when they took place but it is a major | :42:25. | :42:30. | |
part of people's memories in those communities. I want to focus on the | :42:31. | :42:34. | |
media attention. There was a film made about the suicides that was not | :42:35. | :42:39. | |
welcomed by the various communities and I'm glad that she is pursuing as | :42:40. | :42:44. | |
part of the report tackling the glorification of suicide in the | :42:45. | :42:49. | |
media. If you could put it like that. I wonder if she would consider | :42:50. | :42:55. | |
sharing her select committee's report with the Welsh government | :42:56. | :43:00. | |
health and social care committee because I passionately believe that | :43:01. | :43:04. | |
where we can implement best practice from all sectors, whether in the | :43:05. | :43:10. | |
evolved assemblies, we should be sharing that to tackle suicides | :43:11. | :43:16. | |
across the UK. I would be delighted to meet with him and share that. I | :43:17. | :43:21. | |
agree that we should be sharing best practice across the devolved nations | :43:22. | :43:25. | |
and England. The point about the role of the media, there are really | :43:26. | :43:32. | |
clear guidelines that have been produced by Samaritans and I hope | :43:33. | :43:36. | |
all media organisations will look at that very closely and we should go | :43:37. | :43:40. | |
beyond broadcast and print media and look at social media and the | :43:41. | :43:48. | |
Internet as well. I would like to welcome the health select | :43:49. | :43:52. | |
committee's report into suicide prevention and congratulate my | :43:53. | :43:54. | |
honourable friend and her committee for their work on this very | :43:55. | :44:00. | |
important issue. I would also like to join her in my thanks to those | :44:01. | :44:06. | |
who bravely contributed to the work of the committee. Every death by | :44:07. | :44:11. | |
suicide is a tragedy which has a devastating effect on communities | :44:12. | :44:16. | |
and that is why the government is committed to reducing the rate of | :44:17. | :44:23. | |
death by suicide by 10% by 2021. We were particularly grateful to the | :44:24. | :44:26. | |
committee who published their interim report in December which | :44:27. | :44:30. | |
allowed us to address many recommendations in our update of the | :44:31. | :44:35. | |
National strategy and this did include driving local delivery, | :44:36. | :44:39. | |
addressing stigma, improving bereavement services and increasing | :44:40. | :44:43. | |
awareness of the consensus statement for information sharing for people | :44:44. | :44:47. | |
at risk of suicide but we do accept that we need to go further on | :44:48. | :44:54. | |
implementing the cross government suicide prevention strategy. That is | :44:55. | :44:59. | |
why we published the strategy to strengthen key areas including | :45:00. | :45:04. | |
implementation. It is why will continue to provide further updates. | :45:05. | :45:11. | |
It continues with Jess is self harm as an issue in its own right which | :45:12. | :45:14. | |
is one of the most significant issues of suicide risk. We are | :45:15. | :45:21. | |
working with the advisory group and delivery partners across government | :45:22. | :45:23. | |
and other agencies and stakeholders to develop and improved | :45:24. | :45:28. | |
implementation framework. We are making good progress insuring all | :45:29. | :45:32. | |
local areas have suicide plan in place by the end of the year. We | :45:33. | :45:37. | |
have 95% of local areas with a suicide prevention plan in place or | :45:38. | :45:42. | |
in development but we are also going to work with local areas to assess | :45:43. | :45:45. | |
the quality of those plans building on guidance of good practice and we | :45:46. | :45:50. | |
have run a series of suicide prevention masterclass is carried | :45:51. | :45:53. | |
out by Public Health England to improve that quality. We have also | :45:54. | :45:59. | |
published guidance in January on improving bereavement services as an | :46:00. | :46:03. | |
important plank of the plan. Furthermore, we will publish a green | :46:04. | :46:08. | |
paper on young people's mental health and develop a national | :46:09. | :46:11. | |
Internet strategy which will explore the in fact -- impact on suicide | :46:12. | :46:18. | |
prevention and mental health to address some of the issues she has | :46:19. | :46:20. | |
raised around media and suicide. We have committed to all A having | :46:21. | :46:32. | |
core services to deliver this ambition and we will be publishing | :46:33. | :46:37. | |
our mental health workforce strategy which I am sure the committee will | :46:38. | :46:42. | |
carefully scrutinised and we will carefully consider all the | :46:43. | :46:48. | |
recommendations made in this report and respond. Does she agree that we | :46:49. | :46:54. | |
cannot think about suicide without considering the broader question of | :46:55. | :46:58. | |
mental health? Will she and the committee join me in welcoming the | :46:59. | :47:02. | |
wide range of measures set out by the Prime Minister in January with a | :47:03. | :47:09. | |
focus on earlier intervention and prevention in mental health | :47:10. | :47:13. | |
services? These improvements will be essential if we are to make the | :47:14. | :47:16. | |
progress of suicide prevention that all of us in this has want to see. I | :47:17. | :47:24. | |
had my honourable friend and agree with absolutely about the importance | :47:25. | :47:27. | |
of prevention and early intervention and I look forward to the strategies | :47:28. | :47:31. | |
she has referred to and to working with her to do all we can to improve | :47:32. | :47:36. | |
mental health and to reduce the terrible from suicide. We now come | :47:37. | :47:44. | |
to the backbench motion on energy prices. John Penrose to move. I move | :47:45. | :47:50. | |
the motion which stands in my name and my co-sponsors from Don Valley | :47:51. | :47:56. | |
and North Ayr and carrot. I shall start by thanking the backbench | :47:57. | :48:00. | |
business committee for finding the time to debate this important and | :48:01. | :48:06. | |
topical motion today, as well as banking my two co-sponsors, plus the | :48:07. | :48:10. | |
50 or so MPs from across the political spectrum who all feel the | :48:11. | :48:21. | |
way most energy customers are being treated is so I'm just so as to | :48:22. | :48:25. | |
raise it here in Parliament. Customer loyalty is hugely | :48:26. | :48:30. | |
important, an asset to be price, whether it is a supermarket's | :48:31. | :48:34. | |
loyalty card, an airline's airline scheme or a copy card that gives you | :48:35. | :48:39. | |
a free cup of coffee after they have stamped it ten times. Most | :48:40. | :48:43. | |
businesses reward their most loyal customers with special treatment to | :48:44. | :48:47. | |
keep them coming back. Except for energy. What other industry does not | :48:48. | :48:53. | |
give their most loyal customers any disk as ordeals, but charges them | :48:54. | :48:57. | |
higher prices than anyone else instead? Which company is believed | :48:58. | :49:01. | |
loyalty should be exploited, not rewarded? Who treat their longest | :49:02. | :49:08. | |
serving customers as chumps, to be switched on to expensive and unfair | :49:09. | :49:13. | |
deals when they are not looking and then ripped off mercilessly for as | :49:14. | :49:19. | |
long as possible. The big six energy firms, I'd Deputy Speaker, that is | :49:20. | :49:24. | |
who. The rest of the industry is pretty good. There are 30 or more | :49:25. | :49:29. | |
new firms snapping at the heels of the big six and they understand | :49:30. | :49:36. | |
loyalty matters if you want to grow. I am grateful to my honourable | :49:37. | :49:40. | |
friend for giving way. There has been a huge roll-out of smart meters | :49:41. | :49:45. | |
which is one way of keeping an eye on energy bills. But unfortunately | :49:46. | :49:54. | |
when people do switch providers they find that their smart meter often | :49:55. | :49:59. | |
has to be replaced at the same time. Does my honourable friend agree this | :50:00. | :50:03. | |
is why some people are unwilling to change providers? There are many | :50:04. | :50:08. | |
reasons why switching has not caught on to anything like the degree we | :50:09. | :50:12. | |
needed to if we are to transform this sector. One of the factors may | :50:13. | :50:19. | |
very well be this problem with smart meters, but there are others as | :50:20. | :50:23. | |
well. I will point at others as well later on in my speech. There are 30 | :50:24. | :50:31. | |
or more newish firms snapping at the heels of the big six who understand | :50:32. | :50:35. | |
loyalty matters. Some are more impressive than others, but they all | :50:36. | :50:40. | |
have one thing in common. They are hungry, they know they have got to | :50:41. | :50:43. | |
impress and delight their clients because they cannot exploit a black | :50:44. | :50:50. | |
book of long-running customers to stay fat and happy. Roughly two | :50:51. | :50:56. | |
thirds of all customers, at least 20 million households, are on the | :50:57. | :50:59. | |
expensive, rip-off deals, the standard variable tariff. While a | :51:00. | :51:04. | |
minority of customers switched to a different energy supplier regularly, | :51:05. | :51:10. | |
most of us do not. The amount of switching has been creeping upwards, | :51:11. | :51:13. | |
but a lot of the change has been the same bargain hunters churning around | :51:14. | :51:18. | |
an ever faster circles between different energy firms. The number | :51:19. | :51:24. | |
of households who have never switched remains stubbornly high | :51:25. | :51:29. | |
which suits the big six just fine. What is the answer? How do we put | :51:30. | :51:32. | |
energy customers in the driving seat? Giving them the same powers to | :51:33. | :51:38. | |
choose a new energy supplier as easily as we switch a new brand of | :51:39. | :51:46. | |
toothpaste or coffee. Firstly, we have got to make switching a lot | :51:47. | :51:51. | |
easier. Choosing that different brand of toothpaste is easy, you | :51:52. | :51:56. | |
pick up a different tune of the shelf, but too many people find | :51:57. | :51:59. | |
switching to a different energy firm scary and stressful and they are | :52:00. | :52:04. | |
frightened off. Even the price comparison sites who have an | :52:05. | :52:08. | |
interest in making the process is simply and as easy as possible lose | :52:09. | :52:12. | |
huge numbers of customers who abandon their search the moment they | :52:13. | :52:17. | |
are asked something simple like what is your current energy usage? Some | :52:18. | :52:22. | |
people think switching will go wrong so they could end up cold and | :52:23. | :52:25. | |
shivering in a house without power if the move does not happen | :52:26. | :52:29. | |
smoothly. My honourable friend has already mentioned the fact that | :52:30. | :52:36. | |
smart meters have an impact in some households at least. Some of us have | :52:37. | :52:42. | |
not got time, leading busy lives juggling schools, child care, jobs | :52:43. | :52:47. | |
and what else. Switching our energy supply is one of those things we all | :52:48. | :52:51. | |
know we ought to do, but we never quite get round to doing. The | :52:52. | :52:56. | |
difference is that those other products do not automatically switch | :52:57. | :53:01. | |
you to a super expensive brand of toothpaste or copy unless you tell | :53:02. | :53:05. | |
them not to. They do not expect you to be on your toes all the time to | :53:06. | :53:09. | |
stop them changing use the terms of your deal and ripping you off. But | :53:10. | :53:15. | |
toothpaste, copy and everything else, loyalty and inertia works in | :53:16. | :53:20. | |
the customer's favour, but not with energy. If you relax, they will have | :53:21. | :53:26. | |
you. There are simple things that will make switching easier, less | :53:27. | :53:31. | |
stressful and not so scary. A main one is making your customer data | :53:32. | :53:35. | |
easily available to a new energy firm. That way we do not have to | :53:36. | :53:42. | |
fill in endless online pages with information we cannot remember we | :53:43. | :53:47. | |
have not got. At the moment the information can take days to come | :53:48. | :53:51. | |
through and the big six floating obstacles along the way. They have | :53:52. | :53:54. | |
no interest in making the process simple. We should just be able to | :53:55. | :54:01. | |
ask our new firm to get it from an existing supplier in a few seconds | :54:02. | :54:07. | |
with the tick of a box or the press of a mouse. Simple, easy and safe. | :54:08. | :54:12. | |
The number of people switching would go through the roof if we get this. | :54:13. | :54:16. | |
There are end to end services provided... The honourable member is | :54:17. | :54:23. | |
making a good point, but will he agree also it is more problematic | :54:24. | :54:27. | |
for example for people who live in tower blocks where the energy supply | :54:28. | :54:33. | |
is collectively made by the landlord who might not have any incentive to | :54:34. | :54:39. | |
switch to another supplier? My them Deputy Speaker, the honourable | :54:40. | :54:43. | |
gentleman is right. One of the things that might be improved by the | :54:44. | :54:48. | |
roll-out of smart meters would be to break down some of those collected | :54:49. | :54:52. | |
bills. The concern amongst many in the industry is that smart meters | :54:53. | :55:01. | |
may be overinvested in too many hopes and they will not produce a | :55:02. | :55:05. | |
lasting uplift in the levels of customer engagement in chess. They | :55:06. | :55:09. | |
would start off as an interesting and new gadget, but after a few | :55:10. | :55:14. | |
months that interest may die away. But he is right, there is an | :55:15. | :55:21. | |
opportunity there. In the spirit of making switching easier, there are | :55:22. | :55:25. | |
end to end services provided by terms like Flipper, which do the | :55:26. | :55:32. | |
donkey work for us, handling everything from finding a better | :55:33. | :55:35. | |
deal to organising the switch itself. They appeal to those of us | :55:36. | :55:40. | |
who think even the most convenient price comparison sites take too much | :55:41. | :55:47. | |
of our time as well. Would my honourable friend not agree part of | :55:48. | :55:51. | |
the problem with the big six and other generators is they are not | :55:52. | :55:55. | |
straightforward and honest with their customers and stakeholders? | :55:56. | :55:59. | |
Until they are straightforward and honest they will be this disquiet at | :56:00. | :56:05. | |
their conduct. That is I think one of the underlying concerns about | :56:06. | :56:09. | |
this industry and the way it operates. Because they have not | :56:10. | :56:14. | |
necessarily been asked at the moment when they are switched on to the | :56:15. | :56:19. | |
default tariff, they feel when they notice it, if they notice it, they | :56:20. | :56:23. | |
are being ripped off because those default tariffs are so much higher | :56:24. | :56:28. | |
and that leads to distrust in the suppliers and that is corroding the | :56:29. | :56:32. | |
underlying level of trust in the industry as a whole. It is | :56:33. | :56:39. | |
incredibly dangerous. Some forward thinking people in the industry | :56:40. | :56:43. | |
understand the brand damage being done not just to individual firms, | :56:44. | :56:48. | |
but to the sector as a whole. It is slow to gain that trust. The | :56:49. | :56:52. | |
honourable gentleman has a background in marketing and consumer | :56:53. | :56:56. | |
business and he will understand what I mean. If we can look at the | :56:57. | :57:03. | |
effects of these end to end services I was mentioning, introducing them | :57:04. | :57:07. | |
and rolling them out should introduce another new group of | :57:08. | :57:12. | |
customers who do not switch at all. But they will be persuaded to do so | :57:13. | :57:16. | |
in future, extending the number of people in that is that when two | :57:17. | :57:20. | |
thirds of the customer base who do not switch. These changes taken | :57:21. | :57:29. | |
together are essential steps to solve the underlying, fundamental | :57:30. | :57:32. | |
problems which make the energy market such a rip off. If the | :57:33. | :57:38. | |
government, Ofgem and even enlightened energy firms themselves | :57:39. | :57:42. | |
are willing to take them, the abuses will start to fall and customers | :57:43. | :57:48. | |
will finally be in the driving seat like we already are and expect to be | :57:49. | :57:50. | |
with everything else from toothpaste to copy to cornflakes and so on. But | :57:51. | :58:00. | |
how quickly will the rip-offs stop? Will there be stubborn pockets of | :58:01. | :58:05. | |
resistance left over? Given that two thirds of all these customers are on | :58:06. | :58:13. | |
those rip-off tariffs, there is an awfully long way still to go. Even | :58:14. | :58:20. | |
the most optimistic scenarios, an unacceptably large number of houses | :58:21. | :58:23. | |
will still be ripped off for a few more years yet. We need a stop gap, | :58:24. | :58:30. | |
a temporary solution whilst all those other ideas start to work and | :58:31. | :58:35. | |
take effect. The answer is a relative price cap, a maximum | :58:36. | :58:39. | |
mark-up between each energy firm's best deal and their default tariff. | :58:40. | :58:45. | |
Once your existing deal comes to an end, if you forget to switch, you | :58:46. | :58:51. | |
will not be ripped off too badly. But there will still be plenty of | :58:52. | :58:55. | |
money you can save when you get round to switching again, so it will | :58:56. | :58:58. | |
be worth your while to become engaged and take that additional | :58:59. | :59:04. | |
action. Energy firms will still be able to compete on price, they could | :59:05. | :59:10. | |
still decide if they want to be the Waitrose, the Marks Spencer or the | :59:11. | :59:16. | |
Lidl of the industry. They could still have as many tariffs as they | :59:17. | :59:20. | |
wanted so there could be plenty of customer choice. If you wanted a | :59:21. | :59:29. | |
Green energy tariff, that would be fine. If you do not want an ink | :59:30. | :59:35. | |
deal, no problem. I am delighted to confirm that this idea for a | :59:36. | :59:38. | |
relative cap is supported by three of the largest challenger brands. | :59:39. | :59:44. | |
They cover hundreds of thousands of customers between them and I hope to | :59:45. | :59:47. | |
persuade others to join them in due course. Crucially, a relative cap is | :59:48. | :59:56. | |
rather better, a lot better, than a normal price cap. The relative cap | :59:57. | :00:02. | |
means each energy firm can still adjust their prices when the | :00:03. | :00:06. | |
wholesale price goes up or down, but a normal one means Ofgem has to | :00:07. | :00:11. | |
approve any changes which will be slower and create work for lawyers | :00:12. | :00:16. | |
and lobbyists. A relative cap also means energy firms still have plenty | :00:17. | :00:21. | |
of incentives to innovate, finding new ways to please groups of | :00:22. | :00:25. | |
customers in whatever way they want without needing Ofgem's approval | :00:26. | :00:26. | |
first. Putting customers in the drivers | :00:27. | :00:40. | |
seat means fewer fat fees and lunches for the lobbyists. If | :00:41. | :00:46. | |
customers can switch their supply as easy as changing their cornflakes, | :00:47. | :00:53. | |
the customer and the regulators will matter a lot less than we did in | :00:54. | :00:57. | |
this area. A relative cap means we can deregulate, striking out reams | :00:58. | :01:04. | |
of other regulations, red tape and other issues that complicate the | :01:05. | :01:10. | |
market stopping energy firms from thinking about their customers first | :01:11. | :01:19. | |
and thinking about their lawyers and compliance directors instead. A | :01:20. | :01:23. | |
relative cap reduces red tape rather than adding to it. The people who | :01:24. | :01:28. | |
will hate the relative cap the most will be the big six. It will force | :01:29. | :01:34. | |
them to treat consumers fairly and reward loyalty rather than exploit | :01:35. | :01:39. | |
it. To find it hard to keep long-standing customers rather than | :01:40. | :01:42. | |
to take it for granted. In other words, to be a normal business | :01:43. | :02:00. | |
thinking about the customer first. The secretary of State and Prime | :02:01. | :02:03. | |
Minister have been trenchant of their criticisms of how the sector | :02:04. | :02:07. | |
is not delivering an economy that works for everyone. So I hope they | :02:08. | :02:10. | |
will accept the thrust of this motion that the time for action has | :02:11. | :02:16. | |
come. We simply cannot argue, as others have tried to do, that even | :02:17. | :02:21. | |
though two thirds of the country are being ripped off, we aren't going to | :02:22. | :02:25. | |
help protect those victims because it is their own silly fault if they | :02:26. | :02:30. | |
are not savvy enough to switch. Yes, we need to make switching easier and | :02:31. | :02:42. | |
safer so that most of us do it most of the time, that's clearly the | :02:43. | :02:44. | |
right long-term answer. Until that glorious day, I hope this does will | :02:45. | :02:47. | |
accept that we cannot sit back and allow consumers to be harmed on this | :02:48. | :02:51. | |
scale for this long and nothing. We need to do more. The question is as | :02:52. | :03:00. | |
on the order paper. Point of order, Alex Salmond. We raised the point | :03:01. | :03:09. | |
about a prime ministerial statement on the Scottish contest you | :03:10. | :03:14. | |
shouldn't that was -- on the Scottish constitution. That | :03:15. | :03:23. | |
statement has been made as interpreted as being to bounce a | :03:24. | :03:30. | |
vote next Tuesday. The Prime Minister seems to be dictating the | :03:31. | :03:34. | |
timing of any referendum. These points were put to the pro Minister | :03:35. | :03:37. | |
at Prime Minister's Question Time yesterday and she had full and fair | :03:38. | :03:42. | |
opportunity to give her answer. You understand that the act of | :03:43. | :03:48. | |
Parliamentary accountability is if that there is a change of policy, | :03:49. | :03:53. | |
members of Parliament can prepare to ask questions about it. Questions | :03:54. | :03:58. | |
like what if the Scottish parliament is not bounced and votes for a | :03:59. | :04:07. | |
referendum next week. Fundamentally, the arrogance that says to the | :04:08. | :04:10. | |
people in Scotland that they shall not have the right to have an act of | :04:11. | :04:17. | |
self determination, or say to the parliament that we do not have a | :04:18. | :04:22. | |
right of examination. Have you had a request from the Prime Minister to | :04:23. | :04:28. | |
come to this dispatch box and, for Parliamentary accountability or does | :04:29. | :04:32. | |
she feel that Scotland is some sort of county rather than the country | :04:33. | :04:38. | |
that it is. I will thank the honourable gentleman for that | :04:39. | :04:44. | |
contribution. I was not here when he made his previous point of order and | :04:45. | :04:50. | |
the speaker made his response to the honourable gentleman. I have not | :04:51. | :04:55. | |
seen or heard any statements from the Prime Minister but he has now | :04:56. | :04:58. | |
put all of his questions and concerns on the record and we now | :04:59. | :05:05. | |
move on to Ian Wright. Thank you very much. Can I congratulate the | :05:06. | :05:13. | |
honourable gentleman, the member for Weston-Super-Mare. An honour to | :05:14. | :05:17. | |
follow his speech. He is passionate and knowledgeable and very measured | :05:18. | :05:20. | |
about some of the things with regard to the energy market, so I pay | :05:21. | :05:29. | |
tribute that he and his colleagues have been able to secure this | :05:30. | :05:35. | |
important debate. It affects all of our constituents, millions of people | :05:36. | :05:41. | |
up and down the country. I thank the backbench business committee for | :05:42. | :05:45. | |
agreeing it take place. It's very clear that the energy park it is not | :05:46. | :05:50. | |
a market which is working in the best interests of customers. That is | :05:51. | :05:56. | |
not to say that there is somehow some degree of collusion between the | :05:57. | :06:03. | |
energy companies. Far from it. There are quite different price strategies | :06:04. | :06:06. | |
between the major energy companies to the point that there is a | :06:07. | :06:11. | |
difference of about ?140 for dual fuel customers between the major | :06:12. | :06:15. | |
suppliers. As the honourable gentleman said, there have been | :06:16. | :06:21. | |
welcome new entries into the energy market, disrupting in a positive way | :06:22. | :06:26. | |
the energy oligopoly we have seen for far too long. Bringing in | :06:27. | :06:30. | |
innovative companies offering better choice, services and value to the | :06:31. | :06:35. | |
customer. Ten years ago, the big six customers dominated the entire | :06:36. | :06:41. | |
market. 100% market share. Last year, that move to 85%. Good, | :06:42. | :06:47. | |
positive news. New entrants are taking market share and offering | :06:48. | :06:53. | |
competitive fixed term deals. I said earlier, there is no evidence of | :06:54. | :06:57. | |
collusion between the energy companies but there are marked | :06:58. | :07:00. | |
similarities between their business models and they do not act in the | :07:01. | :07:05. | |
best interests of their customers. They actually punish customer | :07:06. | :07:10. | |
loyalty. Their business models are predicated on a sizeable proportion, | :07:11. | :07:13. | |
if not the majority of their customer base will be and will | :07:14. | :07:18. | |
continue to be indefinitely on the standard variable tariffs. Of the | :07:19. | :07:22. | |
big six companies, British Gas have 74% of its customers on its STB, the | :07:23. | :07:36. | |
others have similar or greater proportions. -- SVT. These are in | :07:37. | :07:46. | |
the main the most expensive of all the tariffs are available. Yet, half | :07:47. | :07:53. | |
or more of all customers have been with the same supplier for five | :07:54. | :07:58. | |
years or more. It's almost guaranteed that those households | :07:59. | :08:03. | |
will be overpaying for their energy. The CMA estimated that the lack of | :08:04. | :08:07. | |
competition in the market means that customers are overpaying for their | :08:08. | :08:13. | |
energy to the collective Choon of about ?1.4 billion. Despite all of | :08:14. | :08:16. | |
that, despite the very clear evidence that the market is not | :08:17. | :08:25. | |
working in the marketplace, energy companies continue to penalised | :08:26. | :08:29. | |
loyalty. The more you are with a company, the more you are likely to | :08:30. | :08:33. | |
pay. Which of the market could possibly state that? Now, Ofgem | :08:34. | :08:45. | |
stated categorically that they did not see a case for a significant | :08:46. | :08:53. | |
rise. Wholesale costs have risen by about 15% in the past year, however, | :08:54. | :08:58. | |
the overall cost of energy was marginally below what it was three | :08:59. | :09:10. | |
years ago. The big six and Veolia behave in a culture of entitlement. | :09:11. | :09:15. | |
We need to address that culture. These companies need to address that | :09:16. | :09:21. | |
culture. I think the honourable gentleman is absolutely right. A | :09:22. | :09:25. | |
market has to be dynamic and companies should be nervous of | :09:26. | :09:28. | |
customers moving away. They are not doing that at the moment. Their | :09:29. | :09:33. | |
business models are predicated on the fact that people for a variety | :09:34. | :09:38. | |
of reasons stay on the expensive tariff, not moving, and because of | :09:39. | :09:43. | |
that they can provide loss leading deals for new customers but, in | :09:44. | :09:47. | |
terms of customer loyalty, they simply scoff at that. That is not a | :09:48. | :09:53. | |
market that is working in anybody's interest. It's not dynamic, | :09:54. | :09:58. | |
efficient, or effective and it is ultimately not benefiting our | :09:59. | :10:06. | |
customers. It is the way these companies treat their regulators and | :10:07. | :10:14. | |
this place and there will elect a representatives. -- and their | :10:15. | :10:24. | |
elected representatives. It is about the teeth that we provide in | :10:25. | :10:30. | |
regulation to provide a dynamic market. Wholesale costs of energy | :10:31. | :10:35. | |
are big part of an energy bill that ultimately goes to the customer. | :10:36. | :10:41. | |
But, as I said, the actual cost of energy is marginally below what it | :10:42. | :10:45. | |
was three years ago. Companies hedge their risks when it comes to | :10:46. | :10:49. | |
purchasing energy and that should flatten price spikes they experience | :10:50. | :10:53. | |
when they are buying on the global market. That might mean that we tell | :10:54. | :10:59. | |
prices to customers might not fall as quickly and sharply when | :11:00. | :11:05. | |
wholesale fall but it should stop price hikes when wholesale prices | :11:06. | :11:10. | |
rise. We have seen no evidence of that whatsoever. In announcing the | :11:11. | :11:15. | |
big price rise, the biggest for many years, last month, Npower stated, I | :11:16. | :11:21. | |
quote from their website "Over the past few years the cost of supplying | :11:22. | :11:25. | |
energy to your home has increased, as has the amount we need to pay to | :11:26. | :11:30. | |
government schemes." Allow me to defend the government here. Quite | :11:31. | :11:38. | |
robustly. I think that phrase, from Npower and other companies, about | :11:39. | :11:42. | |
the cost of government schemes, is simply wrong. The Committee on | :11:43. | :11:48. | |
Climate Change have published its analysis on energy prices and | :11:49. | :11:52. | |
household costs and it shows that 9% of the average dual fuel bill for | :11:53. | :11:57. | |
domestic customers is made up of moving towards a low carbon | :11:58. | :12:01. | |
electricity supply and support for energy efficiency home improvements. | :12:02. | :12:06. | |
The notion that energy companies can justify price increases on | :12:07. | :12:10. | |
government action and policies is simply disingenuous. My honourable | :12:11. | :12:15. | |
friend is making an important port and it's worth reading that report | :12:16. | :12:20. | |
from the Committee on Climate Change. Would he also accept that | :12:21. | :12:26. | |
part of that 9% is to help people reduce their bills by the | :12:27. | :12:29. | |
introduction of energy efficient measures to help some of the poorest | :12:30. | :12:35. | |
in our communities to keep their bills down. So it is a worthwhile 9% | :12:36. | :12:46. | |
investment. Absolutely. As well as tackling things like fuel poverty | :12:47. | :12:49. | |
and the carbonisation targets it means that energy efficiency | :12:50. | :12:57. | |
measures are a key plank of that. Everybody wins when energy | :12:58. | :13:01. | |
efficiency is prioritised. Very grateful to my honourable friend who | :13:02. | :13:06. | |
is making a very good case. Would he agree with me that energy efficiency | :13:07. | :13:11. | |
measures when introduced, for example in tower blocks, or | :13:12. | :13:15. | |
sometimes in low-rise properties, can become Piketty to use and if not | :13:16. | :13:20. | |
used properly can be more expensive to the consumer? Would he agree that | :13:21. | :13:27. | |
there is a powerful case, I had two examples in my constituency over the | :13:28. | :13:31. | |
last few years, where people have ended up paying more for a lower | :13:32. | :13:35. | |
standard of heating. Is there a case for the government to issue guidance | :13:36. | :13:40. | |
to local authorities and registered social landlords about how to | :13:41. | :13:45. | |
install these systems and how to inform tenants about how they are | :13:46. | :13:50. | |
supposed to be used. My honourable friend has made a very powerful | :13:51. | :13:55. | |
point. I was in the chamber when he made an earlier intervention about | :13:56. | :13:59. | |
switching supplies and how people in tower blocks are often unable to do | :14:00. | :14:02. | |
that. It is another vivid illustration that the market is not | :14:03. | :14:09. | |
working in the interests of consumers. Often those could be | :14:10. | :14:12. | |
low-wage, vulnerable households. It's a case that the government and | :14:13. | :14:19. | |
the regulator need to put steps in place in order to make sure that | :14:20. | :14:28. | |
this market works. Now, Ofgen told us that companies largely hadn't be | :14:29. | :14:35. | |
successful in controlling costs. Efficient companies have been able | :14:36. | :14:40. | |
to absorb the cost increases and have passed on those benefits to | :14:41. | :14:46. | |
consumers in eliminating the risks of rising graces. Others have not | :14:47. | :14:51. | |
done so. They feel that they don't have too consider customers because | :14:52. | :14:54. | |
customers will not switch and will continue to stay on the most | :14:55. | :14:58. | |
expensive tariffs. Customers are literally paying the price for the | :14:59. | :15:03. | |
failure of energy companies to manage their businesses and control | :15:04. | :15:04. | |
costs. I said it not just being about cost. | :15:05. | :15:14. | |
This is about customer service and a lack of trust in energy companies. | :15:15. | :15:21. | |
There are huge examples. Every honourable member has cases in their | :15:22. | :15:26. | |
inbox with regards to this. Citizens Advice Bureau told us the companies | :15:27. | :15:32. | |
are getting the basics wrong. Late bills, missing bills, inaccurate | :15:33. | :15:36. | |
bills and failing to provide customers with redress when | :15:37. | :15:39. | |
companies have got things wrong. This is a market that is not | :15:40. | :15:45. | |
working. What is the solution? The current policy response seems to be | :15:46. | :15:49. | |
a jewel approach, which is to encourage companies to engage with | :15:50. | :15:53. | |
the customers in a more efficient way and to communicate widely the | :15:54. | :15:58. | |
benefits that come from switching. Switching should be encouraged and | :15:59. | :16:02. | |
customers could make savings of hundreds of pounds if they switch. | :16:03. | :16:07. | |
On the back of recent price rises from energy companies are switched | :16:08. | :16:14. | |
for our house and we saved ?249. There are big savings to be made and | :16:15. | :16:19. | |
I would encourage customers to switch, switch and switch again. It | :16:20. | :16:25. | |
has to be encouraged. As the honourable gentleman for | :16:26. | :16:28. | |
Weston-Super-Mare did say, a small proportion do switch and base which | :16:29. | :16:33. | |
often. These are savvy customers who know the market and want to get the | :16:34. | :16:37. | |
best possible deal, but that is relatively rare. The vast majority | :16:38. | :16:43. | |
do not switch and that is for a wide variety of reasons, whether it is | :16:44. | :16:49. | |
thinking can I switch? Am I not still with the local electricity | :16:50. | :16:59. | |
board? Will it be too complex? I am frightened of switching. People lead | :17:00. | :17:06. | |
busy lives. In terms of a central utility like this people do not | :17:07. | :17:11. | |
consider it. I do not think it is efficient to say the energy market | :17:12. | :17:17. | |
will be fixed by encouraging more engagement. There needs to be a fair | :17:18. | :17:21. | |
deal for all customers, those two thirds who do not switch, not just | :17:22. | :17:25. | |
those who do. The government often talks a good game when it comes to | :17:26. | :17:31. | |
tackling the energy crisis. When it was revealed in the autumn energy | :17:32. | :17:36. | |
companies were making high profits, the Secretary of State hold them in | :17:37. | :17:39. | |
for an explanation, but nothing materialised. When NPower raised | :17:40. | :17:46. | |
their prices last month, a spokesman said we are concerned by these | :17:47. | :17:49. | |
planned increases and are committed to get the best for ourselves. | :17:50. | :17:54. | |
Suppliers have been protected in wholesale energy prices which I said | :17:55. | :18:00. | |
two years in advance. We expect them to treat customers fairly. Where | :18:01. | :18:04. | |
markets are not working, we are prepared to act. This week in answer | :18:05. | :18:15. | |
to a question from me the secretary of state said time is up, but no | :18:16. | :18:20. | |
action has been taken. Customers will have to endure in the next | :18:21. | :18:25. | |
days, weeks and months high-priced rises with no action taken | :18:26. | :18:29. | |
whatsoever. The regulator says the price rises are not justified. | :18:30. | :18:35. | |
Number ten says they are concerned. The department has had energy | :18:36. | :18:39. | |
companies hold in, but nothing has been done. This does not seem to | :18:40. | :18:43. | |
reflect the urgency that should be given to this issue. The key point I | :18:44. | :18:49. | |
would like to say is for the minister when he responds, how is | :18:50. | :18:53. | |
the government going to act and act now to ensure customers get a better | :18:54. | :18:59. | |
deal? The honourable gentleman for Weston-Super-Mare has an important | :19:00. | :19:03. | |
policy response suggestion when it comes to a restricted price cap. | :19:04. | :19:09. | |
This could be an important means of providing customers with some | :19:10. | :19:13. | |
respite. He mentioned a number of energy companies that have put | :19:14. | :19:17. | |
forward this idea. Some of the quotes from the people who run these | :19:18. | :19:22. | |
energy companies are quite striking. Stephen Fitzpatrick, Chief Executive | :19:23. | :19:29. | |
of Ovo said the energy market was failing because companies were, | :19:30. | :19:33. | |
quote, free to charge whatever they think they can get away with at the | :19:34. | :19:38. | |
expense of disengaged or confused customers. The time has come for the | :19:39. | :19:43. | |
government to step in and take bold action to protect consumers' | :19:44. | :19:49. | |
interests. Greg Jackson, chief executive of Octopus Energy. Energy | :19:50. | :19:53. | |
customers are being robbed in broad daylight, he says. Robbed in broad | :19:54. | :20:00. | |
daylight. It is time for decisive action to end the misery for | :20:01. | :20:04. | |
millions. Will the government look favourably upon the general idea of | :20:05. | :20:13. | |
a price cap. At that time of crippling price rises from companies | :20:14. | :20:18. | |
seemingly indifferent to the plight of customers there needs to be a | :20:19. | :20:21. | |
fundamental change to ensure that the market works for all. In his | :20:22. | :20:27. | |
response the minister must set out the detailed steps he will take both | :20:28. | :20:30. | |
immediately and in the longer term to act in the interests of customers | :20:31. | :20:36. | |
and set out a timetable. The time for strong words, for green papers, | :20:37. | :20:44. | |
for future legislation, is over. If the regulators say there is no | :20:45. | :20:47. | |
justification for price increases and the Prime Minister is saying | :20:48. | :20:53. | |
action needs to happen, why can't we have action now? Customers are | :20:54. | :20:58. | |
facing price rises now. We do not have to wait for a green paper in | :20:59. | :21:03. | |
the months to come, we need to act immediately. What is the government | :21:04. | :21:10. | |
going to do now? I want to congratulate the member from | :21:11. | :21:15. | |
Weston-Super-Mare for this debate today and the backbench business | :21:16. | :21:18. | |
committee and Mike honourable friend from Don Valley. I also want to pick | :21:19. | :21:25. | |
up where my honourable friend from Hartlepool left of and that is in | :21:26. | :21:35. | |
regards to the government. The party opposite has changed their leader | :21:36. | :21:38. | |
and in the process they seem to have changed some of their policies and | :21:39. | :21:43. | |
thought we would not notice. To be honest it is not good enough. Many | :21:44. | :21:48. | |
members had campaigned very hard on this issue of energy and the pricing | :21:49. | :21:58. | |
of energy, however the former Prime Minister David Cameron said his | :21:59. | :22:03. | |
government would legislate to ensure customers receive the lowest | :22:04. | :22:07. | |
possible tariffs. That was the words of the Prime Minister. The current | :22:08. | :22:12. | |
Prime Minister, Theresa May, has refused to honour that pledge. I do | :22:13. | :22:18. | |
not understand why. Even after standing on the steps of number ten | :22:19. | :22:22. | |
she promised to look after vulnerable people which must include | :22:23. | :22:26. | |
those people who suffer from fuel poverty, older people, people with | :22:27. | :22:32. | |
English as a second language, those who cannot switch easily, these are | :22:33. | :22:34. | |
vulnerable people who are not being vulnerable people who are not being | :22:35. | :22:38. | |
protected by this government. It is proving to be all talk from the | :22:39. | :22:42. | |
government which is a real shame on this important issue. The government | :22:43. | :22:48. | |
must stop and must act to stop the jump in energy prices or they could | :22:49. | :22:53. | |
adopt one of Labour's policies, again they are used to adopting our | :22:54. | :22:59. | |
policies, and renationalise the energy companies, or they could | :23:00. | :23:04. | |
listen to the Mayor of London. He has innovative ideas in regards to | :23:05. | :23:07. | |
providing energy to people in London. At the end of the day the | :23:08. | :23:13. | |
price hike is a bitter blow to millions of families. It will add | :23:14. | :23:19. | |
more than ?100 to the typical bill. When people are struggling to make | :23:20. | :23:24. | |
ends meet this is not good enough. This is one of the largest ever | :23:25. | :23:28. | |
increases we have seen and it is unacceptable. Fuel poverty awareness | :23:29. | :23:34. | |
day, quite recently, brought home the reality of the situation of fuel | :23:35. | :23:39. | |
poverty across the country. Families were faced with an agonising | :23:40. | :23:44. | |
decision on whether to heat or eat. We have seen a rise in food banks as | :23:45. | :23:52. | |
a result. Last year we had the first ever fuel bank based in my | :23:53. | :23:57. | |
constituency. It was to help residents especially on prepayment | :23:58. | :24:01. | |
meters get through the winter and get through difficult times. How the | :24:02. | :24:08. | |
food banks came to this conclusion that it was necessary was they found | :24:09. | :24:13. | |
people were approaching them and asking for only food intends, food | :24:14. | :24:16. | |
that could be eaten cold because when they were given food that | :24:17. | :24:21. | |
needed to be cooked they did not have the money on their meter to do | :24:22. | :24:26. | |
that. Lots were surviving on baked beans for instance. You think more | :24:27. | :24:33. | |
should and must be done. I have been campaigning on energy prices for | :24:34. | :24:37. | |
many years now, my constituents have struggled with energy bills. More | :24:38. | :24:43. | |
and more people came to my surgery problems and hardest-hit would those | :24:44. | :24:52. | |
on prepayment meters. The House of commons library figures show they | :24:53. | :24:56. | |
pay 15% more on their gas bill and direct debit customers. I launched a | :24:57. | :25:03. | |
campaign which lots of members participated in across all sides of | :25:04. | :25:08. | |
the House I must say. I called on the government to ensure that their | :25:09. | :25:12. | |
tariffs were made for all and following this campaign the | :25:13. | :25:16. | |
competition 's markets authority recommended a cap on prepayment | :25:17. | :25:20. | |
meters must be implemented. This was a significant victory and I was | :25:21. | :25:24. | |
really pleased because it will reduce the cost of prepayment | :25:25. | :25:32. | |
customers, but not by enough, only about ?80. The price penalty on | :25:33. | :25:38. | |
prepayment customers can be as much as ?320, so there is still a lot | :25:39. | :25:43. | |
more that needs to be done. One in five families are being hit by the | :25:44. | :25:48. | |
prepayment penalties and they are often do just about managing | :25:49. | :25:52. | |
families. These are the people that the Prime Minister often talks | :25:53. | :25:58. | |
about, that very same people that the party opposite's PR machine goes | :25:59. | :26:06. | |
into overdrive, saying they are the party that represents these people. | :26:07. | :26:09. | |
If they are, surely they would do something about this? This lack of | :26:10. | :26:16. | |
being able to heat homes means that people live in damp homes and it is | :26:17. | :26:21. | |
reckoned cold related ill-health costs the NHS around ?1.36 billion | :26:22. | :26:30. | |
each year. If we want to help the National Health Service, if we want | :26:31. | :26:33. | |
to help just about managing families, this is one step that can | :26:34. | :26:38. | |
be done and can be done very quickly if there is a will on the opposite | :26:39. | :26:44. | |
benches to do that. Fuel poverty is a massive problem. It affects over 4 | :26:45. | :26:51. | |
million UK households and in my constituency one in eight households | :26:52. | :26:56. | |
are classified as fuel poor, higher than the national average of one in | :26:57. | :27:02. | |
ten. The Labour Party will continue to work towards ending fuel poverty | :27:03. | :27:06. | |
and when in government we will put energy efficiency back on the | :27:07. | :27:09. | |
agenda. Struggling families need more than warm words from this | :27:10. | :27:19. | |
government, they need warm homes. Thank you very much, Mr Deputy | :27:20. | :27:23. | |
Speaker. It is a pleasure to follow my honourable friend from Brent | :27:24. | :27:27. | |
Central. Can I congratulate her on the work she has done serving those | :27:28. | :27:35. | |
families overreliant on meters? Also listening to her contribution, | :27:36. | :27:40. | |
whilst I have a number of people living in the private rented sector | :27:41. | :27:45. | |
in my constituency, I am sure it is far higher in her constituency and | :27:46. | :27:49. | |
it is a big problem for tenants were landlords are not doing enough to | :27:50. | :27:56. | |
make sure where their homes are rented out are not decent homes with | :27:57. | :28:00. | |
proper energy-efficient measures in them. I know she will continue | :28:01. | :28:06. | |
campaigning on that work. I would like to thank the responders to this | :28:07. | :28:15. | |
debate. We helped to secure the support of some 50 other honourable | :28:16. | :28:20. | |
and right honourable members to attend this important debate. My | :28:21. | :28:26. | |
thanks to the backbench business committee, Parliament was my own | :28:27. | :28:33. | |
Dragons Then. It was only 45 minutes before going in that I realised it | :28:34. | :28:39. | |
was going to be broadcast. We were successful to secure this debate for | :28:40. | :28:43. | |
today. It is well known to family and friends that I love the movies. | :28:44. | :28:52. | |
Thank you. It is still on my bucket list to be an extra in one. I am | :28:53. | :28:56. | |
putting back out there today. Thank you. One of my favourite comedy is | :28:57. | :29:06. | |
Groundhog Day will stop the character has to play a single day | :29:07. | :29:19. | |
all the time. We are replaying the energy issue again today. They are | :29:20. | :29:24. | |
points I have been making for the past six years. The ministers keep | :29:25. | :29:29. | |
changing but I am still here and I hope today the minister, like Bill | :29:30. | :29:34. | |
Murray in the film, will break this spell. Not for the first time | :29:35. | :29:41. | |
headlines have been filled as honourable members have mentioned | :29:42. | :29:50. | |
already with price hikes, hikes that I believe are completely | :29:51. | :29:54. | |
unjustified. But that is not the principal reason for this debate. | :29:55. | :29:59. | |
The reason we sort this debate is to address the fact that energy market | :30:00. | :30:04. | |
is not working. It is failing Britain's consumers in almost every | :30:05. | :30:09. | |
respect. The energy market does not promote effective competition. The | :30:10. | :30:13. | |
regional giants remained the dominant players in their home | :30:14. | :30:15. | |
region is some 30 years later. We talk about the big six but for | :30:16. | :30:28. | |
many regions it is the big one. The energy market does not promote | :30:29. | :30:40. | |
transparency. In 1986, and 1989 there were a succession of mergers | :30:41. | :30:45. | |
and takeovers. This led to the companies being both conservatives | :30:46. | :30:52. | |
and generators of power. So we are left with pretty much the same | :30:53. | :30:57. | |
corporate structures. One consequence is a lack of | :30:58. | :31:00. | |
transparency over the price these companies sell energy to themselves | :31:01. | :31:06. | |
before retailing to the problem. That is something that Labour's | :31:07. | :31:11. | |
reforms advanced in 2015 would have resolved. The market does not | :31:12. | :31:18. | |
promote consumer confidence. The issue is not whether superficially a | :31:19. | :31:22. | |
company offers a fixed-price deal for ?150 less than another, the | :31:23. | :31:29. | |
issue is why 88% of customers refuse to switch from one supplier to | :31:30. | :31:37. | |
another. When a survey was done on 7000 consumers, 56% had never | :31:38. | :31:46. | |
switched supplier or did not recall switching and 72% had never switched | :31:47. | :31:53. | |
tariff with an existing supplier. This is a long-standing crisis of | :31:54. | :31:56. | |
consumer confidence. The vast majority seem to want little or | :31:57. | :32:02. | |
nothing to do with the energy companies. This is not a sign of | :32:03. | :32:08. | |
millions of satisfied customers. Quite the opposite. The CMA have | :32:09. | :32:12. | |
found that the amount of comp points rolled sixfold from 2008-14. The | :32:13. | :32:24. | |
proportion of domestic complainant who were very dissatisfied with how | :32:25. | :32:29. | |
their complaint was handled significantly increased over a | :32:30. | :32:36. | |
two-year period. Npower 67% of very dissatisfied. ScottishPower 64%. | :32:37. | :32:41. | |
Even the medium and small companies were not immune. We cannot let them | :32:42. | :32:50. | |
off the hook. First utility firms worst, 63% dissatisfied. So, the | :32:51. | :32:54. | |
government presides over a domestic energy market that is not | :32:55. | :32:59. | |
competitive, lacks transparency and has a lot of dissatisfied consumers. | :33:00. | :33:03. | |
Those factors alone should ring alarm bells in Whitehall and | :33:04. | :33:08. | |
Westminster. It is the outcome for consumers that ensures that the | :33:09. | :33:14. | |
government must act. The outcome of all the secrecy, the dominance by a | :33:15. | :33:19. | |
few uncompetitive companies and disillusioned, and trusting customer | :33:20. | :33:23. | |
base, largely disengaged, all leads to one certain outcome. A consistent | :33:24. | :33:27. | |
failure of the market to offer fair prices. It should be no surprise to | :33:28. | :33:35. | |
any others regional monopolies, both secret and inefficient, low customer | :33:36. | :33:39. | |
engagement and unresponsive pricing, that is why this debate is so | :33:40. | :33:44. | |
important today. I said this market does not offer fair prices. Let me | :33:45. | :33:53. | |
illustrate this central criticism. First, the big six energy giants | :33:54. | :33:57. | |
account for 85% of the market and treat their long-standing customers | :33:58. | :34:03. | |
worse, those customers without exception will be paying for energy | :34:04. | :34:08. | |
on the most expensive default tariff. The only group treated worse | :34:09. | :34:15. | |
are the customers with a prepayment meeting either because the landlord | :34:16. | :34:19. | |
requires it or they have a poor credit history. This group has risen | :34:20. | :34:24. | |
to 16% of all households. Even the CMA could not ignore that... As well | :34:25. | :34:33. | |
as paying in advance for their energy. I am looking to provide a | :34:34. | :34:43. | |
cap on the charge for these customers. That does not count those | :34:44. | :34:48. | |
customers who are overcharged year after year. Even the CMA could not | :34:49. | :34:56. | |
fully explain the overcharging. Their best estimate was that between | :34:57. | :35:02. | |
2012-15 the average amount overcharged was something like ?1.5 | :35:03. | :35:07. | |
billion per year, reaching almost 2 billion by 2050. | :35:08. | :35:21. | |
This is before any of the current price hikes came into effect. They | :35:22. | :35:31. | |
concluded that in any one year, the detriment, the amount overcharged, | :35:32. | :35:39. | |
was made up of about ?600 million, a year, in excess profits and the | :35:40. | :35:45. | |
remainder, about ?850 million, was down to inefficiencies. Whatever | :35:46. | :35:50. | |
they may be. What it points to is bad management by some very highly | :35:51. | :35:59. | |
paid individuals. The honourable lady is making a very compelling | :36:00. | :36:04. | |
case. She also did in the Dragons Den pitch for this debate with me. | :36:05. | :36:10. | |
She's absolutely right about the CMA figures showing such horrendous | :36:11. | :36:14. | |
levels of customer detriment. Not only is it that bad but the gap | :36:15. | :36:19. | |
between what the standard variable tariff price charged and the | :36:20. | :36:23. | |
wholesale price charged has been getting wider over the last four | :36:24. | :36:28. | |
years at so it's a bad and getting worse as time goes by. Exactly. We | :36:29. | :36:33. | |
have the historical evidence and month by month people are still | :36:34. | :36:39. | |
paying far too much for their energy bills. It is astonishing that this | :36:40. | :36:43. | |
is happening in what is meant to be a competitive market. It's clear | :36:44. | :36:47. | |
that the excessive profit margin made from standard variable tariff | :36:48. | :36:51. | |
customers provides no encouragement to move these customers to a better | :36:52. | :36:55. | |
deal. I believe it's a bankrupt business model. Because if were all | :36:56. | :37:01. | |
admitting and even the energy companies have to face up to this | :37:02. | :37:05. | |
that they are paying over the odds, they have a model based on that. If, | :37:06. | :37:11. | |
for example, all these customers miraculously moved to a lower tariff | :37:12. | :37:15. | |
tomorrow, where would these companies the left? The inertia is | :37:16. | :37:21. | |
compounded by a management approach that doesn't seem to want any form | :37:22. | :37:28. | |
of effective change. The more government has publicly urged | :37:29. | :37:33. | |
consumers to switch to save the mother companies are absolved of any | :37:34. | :37:37. | |
responsibility to move customers to a better deal. A sticky, passive, | :37:38. | :37:43. | |
unengaged customer base suits these firms down to the ground. When EDF | :37:44. | :37:49. | |
automatically back in 2012 moved vulnerable elderly customers onto | :37:50. | :37:53. | |
their cheapest tariff, sadly, other suppliers did not follow up with | :37:54. | :37:59. | |
what I think was some evidence of ability to inform themselves of | :38:00. | :38:03. | |
better practice. This CMA's final report concluded that to eliminate | :38:04. | :38:08. | |
the overcharging, prices would have to fall across the board by an | :38:09. | :38:13. | |
average of 3% per year between now and 2020. It hoped that measures to | :38:14. | :38:19. | |
promote switching would create more competition in the market and have a | :38:20. | :38:23. | |
downward effect on prices but they were reluctant to say how successful | :38:24. | :38:27. | |
they expected that to be because the problem that the CMA faces is that | :38:28. | :38:34. | |
the UK has an energy market with unhappy consumers, a dysfunctional | :38:35. | :38:38. | |
pricing mechanism and companies that are largely immune to competitive | :38:39. | :38:49. | |
pressures. Ofgem reported that the highest level of switching for six | :38:50. | :38:54. | |
years has occurred but it is still less than 12% of households and I | :38:55. | :38:59. | |
worry that we have a two tier energy market. On the one hand, an active, | :39:00. | :39:06. | |
informed class of consumer energy conscious, Internet savvy, shopping | :39:07. | :39:10. | |
around, managing their account online and a far bigger, less | :39:11. | :39:15. | |
informed, less engaged, less Internet savvy discontented | :39:16. | :39:22. | |
majority. She is second to none in her knowledge of energy policy. I'd | :39:23. | :39:30. | |
be interested to get her thoughts in terms of policy fixes. Does she | :39:31. | :39:34. | |
think the regulator has powers but not use them all as the regulator | :39:35. | :39:40. | |
need more powers to help fix this broken market? I know that there are | :39:41. | :39:46. | |
powers the regulator has in its back pocket. It can intervene if it | :39:47. | :39:52. | |
thinks the market is uncompetitive, it can actually, if necessary, from | :39:53. | :39:59. | |
what I understand, actually take, if you like, customers from a company | :40:00. | :40:04. | |
that is failing and hold them up to get a better deal elsewhere. That is | :40:05. | :40:09. | |
within their powers already but I think we need government to take | :40:10. | :40:12. | |
responsibility and part of the debate today is to look at whether | :40:13. | :40:18. | |
it is the relative price cap, or what I would suggest, as well, | :40:19. | :40:23. | |
similar to it, a protective tariff for these people, if not permanent, | :40:24. | :40:29. | |
temporary to fix this market. Let's be clear, more reform is needed in | :40:30. | :40:33. | |
this market and the regulator while I wish it would use its powers and | :40:34. | :40:37. | |
was very slow to do this, it's beaded up in recent years, there's | :40:38. | :40:42. | |
more they could do but there's more government could provide them with | :40:43. | :40:47. | |
to do a better job. We have heard that one of the CMA proposals is | :40:48. | :40:52. | |
that data on customers should be shared so that other energy | :40:53. | :40:56. | |
suppliers can send their offers to customers. The problem is, people | :40:57. | :41:02. | |
would be bombarded with leaflets, e-mails, from operators in a sector | :41:03. | :41:08. | |
where trust is so low, will they trust this marketing any more than | :41:09. | :41:13. | |
they do already. It is the very people immune to direct mail, | :41:14. | :41:18. | |
annoyed by calls from would-be suppliers, and mistrustful of the | :41:19. | :41:21. | |
whole industry who are not being held by any of the measures put | :41:22. | :41:27. | |
forward since the CMA report. By encouraging switching and a shared | :41:28. | :41:31. | |
database for companies to market new tariffs to each other's customers, | :41:32. | :41:35. | |
the CMA believed that price competition can be made to work but | :41:36. | :41:39. | |
I'm afraid the shared database seems to be a new label for an old | :41:40. | :41:43. | |
solution. We've had six years of trying to be of consumer benefit by | :41:44. | :41:49. | |
switching, six years of abject failure. I have to say to the | :41:50. | :41:53. | |
Minister, is it really realistic to assume that for 28 million | :41:54. | :41:57. | |
households, they will be able to reduce their average bills by 3% a | :41:58. | :42:03. | |
year, as the CMA have indicated, for every year between 7017 and 2020. -- | :42:04. | :42:15. | |
2017. Even if it eliminated the detriment it would not repaid 1p of | :42:16. | :42:20. | |
the money already taken from consumers. I see no mechanism in the | :42:21. | :42:26. | |
CMA's prescription that could achieve the objective they have set. | :42:27. | :42:30. | |
Customers who have remained on a standard default tariff for other | :42:31. | :42:36. | |
companies to prey on will not in itself make this market more | :42:37. | :42:41. | |
competitive. In March, Ofgen publish that the cheapest available tariffs | :42:42. | :42:52. | |
was 22% cheaper than the average, but it does not identify how long | :42:53. | :42:58. | |
that tariff lasts. What if it wasn't widely available, what if everybody | :42:59. | :43:02. | |
switched to the new best value tariff? What if 12% of customers get | :43:03. | :43:11. | |
a saving of 20% on their bills. That might notionally cut average bills | :43:12. | :43:18. | |
by 2%. But it would not reduce the detriment by 1p for the 88% of those | :43:19. | :43:22. | |
who don't switch. The penalty incurred by the vast majority would | :43:23. | :43:29. | |
remain. Also among the CMA's recommendations, price comparison | :43:30. | :43:31. | |
websites will no longer have two display every deal available on the | :43:32. | :43:37. | |
market. Those websites might only display those companies that give a | :43:38. | :43:43. | |
commission. The majority will see no gain. The vast majority pay the | :43:44. | :43:49. | |
default standard variable tariff and enjoy prices going up and down as | :43:50. | :43:53. | |
the energy provider chooses, are left at the mercy of their supplier | :43:54. | :43:59. | |
in the CMA has already identified as consistently overcharging. They | :44:00. | :44:05. | |
cannot rely on wholesale charges to save them because there is no | :44:06. | :44:16. | |
obligation to pass on wholesale price the creases to customers. | :44:17. | :44:25. | |
Wholesale gas prices fell while prices rose. This could only happen | :44:26. | :44:31. | |
in the dysfunctional market. Where can consumers get fairness? The only | :44:32. | :44:36. | |
avenue the majority have is the government. The one agency with the | :44:37. | :44:40. | |
powers to change the game at a stroke. How long will the public | :44:41. | :44:48. | |
have to wait before the government acts as the public champion. In | :44:49. | :44:55. | |
October 2011, the Prime Minister convened an energy summit they were | :44:56. | :45:00. | |
going to write to millions of consumers about switching, it didn't | :45:01. | :45:05. | |
work. In 2013, Mr Cameron tried a different approach, getting rid of | :45:06. | :45:12. | |
all the green rubbish, as was reported. The big six like to | :45:13. | :45:24. | |
disperse prices onto green levels even though it is exerting downward | :45:25. | :45:31. | |
pressure on prices. It's ironic the amount of energy we consume as | :45:32. | :45:34. | |
domestic users has gone down per kilowatt hour but we're paying more. | :45:35. | :45:54. | |
When he said get rid of the green numbers, he did. Mr Cameron always | :45:55. | :46:05. | |
ridiculed Labour's energy price freeze, a proposal to cap prices for | :46:06. | :46:08. | |
20 months whilst the market was reformed. Instead in 2014 he | :46:09. | :46:16. | |
announced a CMA investigation and its final report in June 20 entirely | :46:17. | :46:22. | |
vindicated Labour's concern about unfair energy prices. We now have it | :46:23. | :46:28. | |
on the record from one of the government's regulators. Britain's | :46:29. | :46:32. | |
consumers were ripped off year after year for four years, that we know. | :46:33. | :46:38. | |
It is an ?8 billion scandal and every month that financial | :46:39. | :46:47. | |
punishment on customers grows. What do we want? My plea to the | :46:48. | :46:52. | |
government is simple, recognise the scale of the problem. Recognise that | :46:53. | :46:59. | |
what has now become like a gimmick, switching campaigns can only scratch | :47:00. | :47:03. | |
the surface and will never get to the problem. Recognise that this | :47:04. | :47:07. | |
industry needs reform and until it is reformed, the government needs to | :47:08. | :47:11. | |
produce price protection for consumers. I first argued for this | :47:12. | :47:19. | |
after the general election in 2015. Consumers need a regulated maximum | :47:20. | :47:25. | |
charge that companies can levy and an acceptable level of profit. I do | :47:26. | :47:30. | |
not believe it can be left to the companies to do this. Any voluntary | :47:31. | :47:34. | |
measure is welcome, but it has been too piecemeal. We need the | :47:35. | :47:40. | |
government to act. We know Ofgem is capable of a protective tariff | :47:41. | :47:46. | |
calculation. They have just done it for the 5 million prepayment | :47:47. | :47:52. | |
customers. We still have price regulation in Northern Ireland. | :47:53. | :47:55. | |
Majority of countries in the European Union still have price | :47:56. | :47:59. | |
controls of one sort or another. This is not thwarted by the EU, we | :48:00. | :48:05. | |
cannot blame the EU Brexit for the government's failure to address this | :48:06. | :48:10. | |
injustice. This problem lands at the doorstep of Number ten and the | :48:11. | :48:13. | |
government department which the minister represents today. The | :48:14. | :48:17. | |
government has the power and the means to end the fairness in our | :48:18. | :48:22. | |
energy market, or at least to offer a temporary respite as they have for | :48:23. | :48:28. | |
prepayment customers. In November the Secretary of State said, | :48:29. | :48:31. | |
customers who are loyal to their energy suppliers should be treated | :48:32. | :48:36. | |
well, not taken for a ride, and it is high time the big companies | :48:37. | :48:41. | |
recognised this. I have made clear to the big firms this cannot go on | :48:42. | :48:44. | |
and they must treat customers properly or be made to do so. I say | :48:45. | :48:50. | |
to the Minister, now is the time. This problem will not go away and I | :48:51. | :48:54. | |
urge the government to listen to voices on all sides of this house | :48:55. | :48:58. | |
who believe the current energy market does not receive or serve the | :48:59. | :49:04. | |
British people well. The time to act is overdue. It is a pleasure to | :49:05. | :49:10. | |
follow my right honourable friend, the member for Don Valley, if I feel | :49:11. | :49:15. | |
a little bit daunted to speak after that tour de force. She is second to | :49:16. | :49:20. | |
none in her knowledge of this issue. I would like to congratulate the | :49:21. | :49:27. | |
honourable member for Weston-Super-Mare. It is good to | :49:28. | :49:37. | |
join a cross-party platform in urging the government to do | :49:38. | :49:40. | |
something to stop these companies from ripping their customers off. | :49:41. | :49:44. | |
They have been getting away with it for far too long. The right | :49:45. | :49:49. | |
honourable member for Don Valley has been campaigning for fair energy | :49:50. | :49:55. | |
prices for the past six years. If adopted determination was enough to | :49:56. | :49:59. | |
secure victory, it would have paid off long before now. Despite talking | :50:00. | :50:06. | |
big on energy reform, the government has failed to act. They quietly | :50:07. | :50:14. | |
dropped in a promise in 2012 to force companies to switch customers | :50:15. | :50:18. | |
to their lowest tariff and despite the rhetoric about cutting the green | :50:19. | :50:23. | |
rubbish, failing to ensure reductions it made to environmental | :50:24. | :50:28. | |
and other obligations resulting in lower energy bills. It is true they | :50:29. | :50:35. | |
have cut prices on prepayment meters, but I agree we need action | :50:36. | :50:39. | |
for all standard variable tariff customers. In recent weeks we have | :50:40. | :50:47. | |
seen NPower and SSE raise their prices by 15% and another three of | :50:48. | :50:54. | |
the large companies have increased their bills for jewel energy | :50:55. | :51:02. | |
customers. Wholesale prices only increase from a low base. Many of | :51:03. | :51:07. | |
these rises have been piled onto electricity to ensure that as people | :51:08. | :51:11. | |
start turning their heating bills will remain high over the summer. | :51:12. | :51:17. | |
This is grotesquely unfair that the current structure penalises the most | :51:18. | :51:22. | |
loyal customers and those who are the most vulnerable. Almost ?200 | :51:23. | :51:26. | |
difference between a company's cheapest tariff and its standard | :51:27. | :51:36. | |
variable rate, and 15% war for customers on gas only than on other | :51:37. | :51:41. | |
tariffs. The Observer newspaper estimated this is the equivalent to | :51:42. | :51:46. | |
a halfpenny rise on income tax. With 70% of big six customers on standard | :51:47. | :51:54. | |
variable tariff is this means the companies are making record profits. | :51:55. | :51:59. | |
Their profits increased tenfold between 2007 and 2013. Rises are | :52:00. | :52:04. | |
hitting the poorest households particularly hard. Those households | :52:05. | :52:10. | |
are far less likely to switch. Energy bills now account for 10% of | :52:11. | :52:15. | |
spending in the poorest House of Commond compared with 5.5% in 2004. | :52:16. | :52:23. | |
Citizens Advice estimates low income families are ?241 worse off every | :52:24. | :52:31. | |
year. If I can speak about my own constituency and Bristol, we have | :52:32. | :52:36. | |
some of the worst instances of fuel poverty in England. People always | :52:37. | :52:40. | |
think of Bristol as an affluent place, but just because the cities | :52:41. | :52:46. | |
and towns are thriving, it does not mean to say there are not other | :52:47. | :52:51. | |
people who are not living in poverty. In Bristol we have over | :52:52. | :52:56. | |
25,000 people living in fuel poverty, 30% of the city against the | :52:57. | :53:01. | |
national average of 10%. Some neighbourhoods have nearly a | :53:02. | :53:10. | |
quarter, more than 23% of households in fuel poverty, sitting within a | :53:11. | :53:15. | |
mile of ones with only 5%. Food banks are helping people who | :53:16. | :53:18. | |
rationed their energy use to save money. People too often have to | :53:19. | :53:26. | |
choose between heating and eating. To those suffering long-term health | :53:27. | :53:33. | |
conditions the effect of living in a non-heated home can cause suffering | :53:34. | :53:38. | |
and even death. One third of the death last winter I simply estimated | :53:39. | :53:44. | |
to have been caused by cold homes. I was contacted awhile ago by one | :53:45. | :53:48. | |
woman whose husband was extremely ill. They're called home was making | :53:49. | :53:53. | |
his condition words, but was denying them the most basic of conflicts. | :53:54. | :53:59. | |
She said, all we would like is to be worn in our home. I do not think | :54:00. | :54:03. | |
that is too much for anyone to ask in this day and age. Other MPs will | :54:04. | :54:11. | |
have in their localities some of the new breed of municipal energy | :54:12. | :54:14. | |
providers which provide a very different offer from the big six but | :54:15. | :54:21. | |
with fair rates and cleaner energy. Bristol Energy was set up very | :54:22. | :54:27. | |
recently by Bristol City Council. It is a national company, so anyone can | :54:28. | :54:32. | |
switch to it, but there is a special tariff for people with a Bristol | :54:33. | :54:37. | |
postcode. It was set up to help people pay less for their energy and | :54:38. | :54:42. | |
provide a new way to raise funds for the city. All the profits would be | :54:43. | :54:47. | |
reinvested back into the city. Its standard variable tariff is on | :54:48. | :54:54. | |
average ?105 cheaper than the big six. It is currently trialling a | :54:55. | :54:58. | |
warm homes plus tariff to bring households in Bristol out of fuel | :54:59. | :55:03. | |
poverty which would be a nonprofit making fuel tariff, only available | :55:04. | :55:07. | |
by referral. They are working with the Citizens Advice Bureau, the | :55:08. | :55:13. | |
Council, on those proposals and they are looking for a thousand people to | :55:14. | :55:19. | |
start with to put onto this tariff. The profits will be invested back | :55:20. | :55:23. | |
into the city and in the long term we want to be ambitious, tying up | :55:24. | :55:29. | |
with the waste sector. On one visit I had to waste plant on the | :55:30. | :55:33. | |
outskirts of the city they reckoned Bristol's waste alone could generate | :55:34. | :55:39. | |
enough energy to heat 250,000 homes and that has got to be the way | :55:40. | :55:45. | |
forward, a local solution to a local problem. However welcome new | :55:46. | :55:48. | |
entrants are to the energy market, they seem to have had little impact | :55:49. | :55:53. | |
so far in putting pressure on the big six to reduce prices. Despite | :55:54. | :55:58. | |
better practices from some companies wishing people to switch or telling | :55:59. | :56:00. | |
them they have that option is clearly not enough. An independent | :56:01. | :56:07. | |
energy experts said, although I believe in competition and when it | :56:08. | :56:12. | |
works it can result in fairer prices, we have to face the fact | :56:13. | :56:16. | |
that not everyone can and will engage in the market. A spokesperson | :56:17. | :56:21. | |
for the Department for business, energy and industrial strategy set | :56:22. | :56:28. | |
they are ready to react when the market is failing, but it is clear | :56:29. | :56:32. | |
the market is failing for a majority of people, so I am not sure when the | :56:33. | :56:36. | |
department will decide it is time to react. If the case had not been made | :56:37. | :56:42. | |
before today's debate, it is being made very powerfully today that the | :56:43. | :56:52. | |
market is failing. 66% are customers who have never switched supplier, | :56:53. | :57:00. | |
the so-called sticky 66. We need an approach that keeps a full switch in | :57:01. | :57:05. | |
open but ensure the sticky customer does not become disadvantaged by | :57:06. | :57:09. | |
remaining on the standard variable tariff. Much greater transparency as | :57:10. | :57:20. | |
a first step to include a breakdown of costs behind each of the tariffs | :57:21. | :57:25. | |
to include the wholesale energy costs, transition costs and green | :57:26. | :57:28. | |
energy with an improved annual renewal notice along the lines of | :57:29. | :57:33. | |
motor insurance would encourage more switching. I believe we need to go | :57:34. | :57:39. | |
further. We need some kind of price control for those on standard | :57:40. | :57:44. | |
variable tariffs. I would urge the government to pick up on proposals | :57:45. | :57:47. | |
put forward by the right honourable member for Don Valley. If we wait | :57:48. | :57:52. | |
for the green paper on when government should intervene in the | :57:53. | :57:57. | |
markets this spring, then it will be too late to effect energy prices | :57:58. | :58:02. | |
next winter and we will again see people suffering because of having | :58:03. | :58:07. | |
to pay above the odds extortionate energy bills. As the Observer | :58:08. | :58:12. | |
newspaper said, the government must reinstate price regulation until | :58:13. | :58:16. | |
there is convincing evidence of market forces will provide value for | :58:17. | :58:21. | |
consumers, rather than unfairly enriching corporate profits. | :58:22. | :58:24. | |
Consumers have been exploited for too long and it is time now for the | :58:25. | :58:31. | |
government to act. I am delighted to be involved in this debate and I am | :58:32. | :58:37. | |
grateful to the honourable gentleman for Weston-Super-Mare and the right | :58:38. | :58:44. | |
honourable lady for Don Valley. One of the disadvantages of speaking so | :58:45. | :58:51. | |
far down the list, this debate is long overdue and it is a debate | :58:52. | :58:56. | |
about how we can empower consumers as they face the injustice of energy | :58:57. | :59:01. | |
prices. The average annual domestic gas and electricity bills in | :59:02. | :59:07. | |
Scotland have increased by 114% and 15% respectively between 2004 and | :59:08. | :59:15. | |
2015. What consumers pay varies depending on the method of payment, | :59:16. | :59:19. | |
over which the consumer does not always have control. On average | :59:20. | :59:25. | |
electricity and gas consumers in Scotland using standard, credit and | :59:26. | :59:30. | |
prepayment meters face 10% higher bills and those able to use direct | :59:31. | :59:35. | |
debit. The cost of a unit of gas is similar across Scotland and the rest | :59:36. | :59:40. | |
of the British energy market for domestic consumers, however the unit | :59:41. | :59:44. | |
price of electricity differs considerably within Scotland. | :59:45. | :59:49. | |
Consumers in the North pay between eight and 9% more depending on | :59:50. | :59:53. | |
payment type than the average in the rest of Britain. The big six energy | :59:54. | :00:00. | |
companies supply gas and electricity to over 50 million homes with a | :00:01. | :00:04. | |
market share of 85% of UK domestic customers. | :00:05. | :00:12. | |
The hope is that costs can be driven down by increasing competition | :00:13. | :00:20. | |
between suppliers and helping more customers switch to better deals. As | :00:21. | :00:26. | |
we've heard, there is a problem with this, the problem is that the | :00:27. | :00:29. | |
Competition and Markets Authority found that the Basque majority of | :00:30. | :00:35. | |
people don't switch providers and 70% of all big six customers are on | :00:36. | :00:41. | |
the default standard variable tariff which means that 16 million homes | :00:42. | :00:44. | |
are paying more for the energy than they should be. Loyalty is treated | :00:45. | :00:52. | |
as something to be exploited not something to be rewarded. The | :00:53. | :00:58. | |
premium that standard variable tariff consumers pay over those who | :00:59. | :01:03. | |
switch has tended to increase over time. In 2008, less than ?100 each | :01:04. | :01:13. | |
year but by 2015, ?330 and currently at ?230. In all that time, rates of | :01:14. | :01:20. | |
switching are no higher so clearly, as the motion sets out, the way to | :01:21. | :01:26. | |
protect consumers cannot be done simply by encouraging them to switch | :01:27. | :01:32. | |
suppliers. Much more is required. Those most likely to be on standard | :01:33. | :01:36. | |
variable tariffs are more likely to be older, more likely to be | :01:37. | :01:42. | |
disabled, more likely to be on low incomes, more likely to be living in | :01:43. | :01:45. | |
rented accommodation and they are more likely to be consumers without | :01:46. | :01:51. | |
Internet access. Those on standard variable tariffs did not see their | :01:52. | :01:56. | |
bills for by much at all when the cost of providing energy dropped in | :01:57. | :02:02. | |
2014-15. Such savings available were only passed on to the consumers who | :02:03. | :02:07. | |
were active switchers. Not all consumers can engage in the | :02:08. | :02:11. | |
switching process so suppliers need to do more to ensure these customers | :02:12. | :02:16. | |
are not trapped in a deals. The existing market does provide scope | :02:17. | :02:23. | |
for households to save money on energy bills by switching but a low | :02:24. | :02:27. | |
level of consumer engagement in the market still persists. Indeed, the | :02:28. | :02:31. | |
Competition and Markets Authority found that one of the main issues is | :02:32. | :02:37. | |
the lack of engagement in the market on the part of many customers which | :02:38. | :02:41. | |
suppliers are able to explore by charging high prices. 34% of | :02:42. | :02:50. | |
domestic energy customers had never considered switching supplier while | :02:51. | :02:52. | |
many said they didn't know if it were possible or have done so in the | :02:53. | :03:01. | |
past. Switching can currently take up to 21 days and that is a | :03:02. | :03:08. | |
significant period of time during which a consumer who may be thinking | :03:09. | :03:13. | |
about switching may be concerned that something could go wrong during | :03:14. | :03:18. | |
that extended period, for which I don't believe there is sufficient | :03:19. | :03:25. | |
justification. One result is that energy is increasingly unaffordable | :03:26. | :03:31. | |
for customers and between 2004-14 average domestic gas prices rose by | :03:32. | :03:38. | |
around 125% in real terms. Significantly, those consumers who | :03:39. | :03:43. | |
are engaged in the market are typically higher income earners, | :03:44. | :03:48. | |
have access to a mains gas supply and Internet access so that they can | :03:49. | :03:54. | |
much more easily carry out comparison shopping and, of course, | :03:55. | :03:58. | |
they have the ability to pay by direct debit and this is yet more | :03:59. | :04:01. | |
evidence that the way to protect consumers simply cannot be done by | :04:02. | :04:06. | |
encouraging them to switch suppliers. As we heard today, energy | :04:07. | :04:14. | |
efficient measures are of course important and the Scottish | :04:15. | :04:17. | |
Government has done a lot of work on this, driving down fuel poverty, | :04:18. | :04:21. | |
although it remained stubbornly high but ultimately and fundamentally we | :04:22. | :04:26. | |
need effective regulation of the retail energy market and to work | :04:27. | :04:31. | |
collaboratively with energy suppliers to explore ways of | :04:32. | :04:39. | |
lowering energy bills. We need a market that works equally for all | :04:40. | :04:44. | |
consumers regardless of where they are on the income scale. | :04:45. | :04:55. | |
It is currently undergoing a review of the regulation framework but | :04:56. | :05:01. | |
there must be a case for a safeguard tariff, limit on the amount | :05:02. | :05:06. | |
prepayment customers are charged, for that to be expanded to include | :05:07. | :05:11. | |
those consumers on a standard variable tariff eligible for the | :05:12. | :05:16. | |
warm home discount on credit meter. It is important that the government | :05:17. | :05:21. | |
sets targets to significantly reduce the number of consumers on standard | :05:22. | :05:26. | |
variable tariffs by 2020 and if suppliers cannot or do not meet | :05:27. | :05:30. | |
these targets, then consideration has to be given to broaden the | :05:31. | :05:38. | |
safeguard tariff to protect others standard dairy bull tariff | :05:39. | :05:41. | |
customers. Just because consumers very often, vulnerable consumers, | :05:42. | :05:53. | |
are unable to switch doesn't mean that they should be left at the | :05:54. | :05:56. | |
mercy of the market that punishes them for not been able to do that. | :05:57. | :06:03. | |
Much must be done to protect consumers who are currently | :06:04. | :06:08. | |
overcharged, doing nothing is not an option. I hope the minister will | :06:09. | :06:14. | |
address the concerns that we have raised today and reassure this house | :06:15. | :06:19. | |
that protecting consumers and putting energy companies on notice | :06:20. | :06:24. | |
that things cannot and must not continue as they have been doing. | :06:25. | :06:31. | |
It's a pleasure to speak after the honourable member for North Ayrshire | :06:32. | :06:35. | |
and Arran. Bradford is a city facing its share of challenges, many enjoy | :06:36. | :06:43. | |
the poverty despite being in paid work, indeed, in work poverty is | :06:44. | :06:48. | |
rife. Despite long working hours, week in week out, pay packets don't | :06:49. | :06:55. | |
meet basic necessities. One such necessity is how to pay gas and | :06:56. | :06:59. | |
electricity bills when they drop on the doormat. To my mind, that is | :07:00. | :07:06. | |
what today's debate is all about. As energy prices soar and wages | :07:07. | :07:10. | |
stagnate, hard-pressed families and those on low incomes are faced with | :07:11. | :07:15. | |
desperate choices. What should they pay first? Rent or electricity rest | :07:16. | :07:20. | |
are what is more important, weekly food shop or gas bill? What is | :07:21. | :07:25. | |
better for their family, one home food on their table? Without doubt, | :07:26. | :07:31. | |
soaring energy prices touch every single person in this country but | :07:32. | :07:35. | |
the poorest suffer disproportionately. What is clear is | :07:36. | :07:39. | |
that the wider energy market is in chaos. How many hours of coal | :07:40. | :07:51. | |
powered energy has been provided this year? Is it not the case that | :07:52. | :07:58. | |
coal stations produce more emissions on lower loads. How is the current | :07:59. | :08:07. | |
capacity market mechanism going to guarantee fair pricing mechanisms? | :08:08. | :08:15. | |
What is also clear is that the energy sector is no longer operating | :08:16. | :08:22. | |
in the Insta -- interest of our constituents. All of the major | :08:23. | :08:31. | |
suppliers except British Gas have recently announced price hikes. The | :08:32. | :08:38. | |
big six enjoy a near monopoly position, 85% market share, when | :08:39. | :08:41. | |
prices are hiked within days of each other, strong evidence that the | :08:42. | :08:47. | |
market is broken. This government cannot continue to argue that | :08:48. | :08:50. | |
competition in the energy sector is the key to lower bills. The big six | :08:51. | :08:56. | |
are failing to get ordinary families and hard-pressed individuals onto | :08:57. | :09:00. | |
their cheapest tariff. For 20 million households to be stranded on | :09:01. | :09:07. | |
default tariffs is a scandal. The mantra about helping customers onto | :09:08. | :09:11. | |
the cheapest tariffs is little more than spin. These customers could be | :09:12. | :09:18. | |
paying up to ?230 extra per year, a huge sum when family budgets are | :09:19. | :09:23. | |
under pressure. In Bradford, I'm fortunate that my local council is | :09:24. | :09:28. | |
working to tackle fuel poverty but as a council they cannot control the | :09:29. | :09:32. | |
big six energy companies. That is solely within the gift of this | :09:33. | :09:37. | |
government. In 2015, Bradford Council adopted a fuel poverty | :09:38. | :09:42. | |
framework for action, this devised in partnership with the respective | :09:43. | :09:47. | |
national energy action undertook a detailed analysis of the scale of | :09:48. | :09:52. | |
fuel poverty in Bradford. It discovered that homes in Bradford | :09:53. | :09:56. | |
have benefited from 50,000 energy efficiency measures, but one in | :09:57. | :10:04. | |
eight households continue to suffer from fuel poverty. This remains the | :10:05. | :10:13. | |
case today. Because of its historical and industrial past, a | :10:14. | :10:17. | |
substantial proportion of Bradford's housing is very old. Much of it | :10:18. | :10:26. | |
built before 1919, above the national average of 25%, a further | :10:27. | :10:36. | |
20% was built 1919- 44. These homes are classified as hard to treat | :10:37. | :10:40. | |
because they are stone built and feature a regular construction. In | :10:41. | :10:44. | |
many other towns and cities throughout the country, a family | :10:45. | :10:48. | |
faced with soaring energy bills might consider improving the energy | :10:49. | :10:52. | |
efficiency of their home, if they can afford it. In Bradford, the | :10:53. | :10:57. | |
prevalence of hard to treat homes mean energy efficiency schemes are | :10:58. | :11:04. | |
my -- neither quick nor affordable. The consequence is that meeting the | :11:05. | :11:14. | |
cost of this scheme is ever more unlikely. The plight is especially | :11:15. | :11:19. | |
desperate in the private rented sector. As families are priced out | :11:20. | :11:25. | |
of the housing market, many find themselves in rented accommodation | :11:26. | :11:28. | |
which has seen little investment for many years. The number of households | :11:29. | :11:34. | |
in the private rented sector in Bradford has rocketed from 17,000 | :11:35. | :11:41. | |
502,001 to nearly 40,020 15. Now accounting for over 18% of the total | :11:42. | :11:50. | |
housing stock. I recognise that the government has taken steps to tackle | :11:51. | :11:55. | |
poverty in the private rented sector but regrettably Diego measures | :11:56. | :11:57. | |
announced black ambition. The legal minimum requirement in the private | :11:58. | :12:08. | |
rented sector has been set at E. An ambitious government would have set | :12:09. | :12:13. | |
the legal minimum much higher. If this government had done so, an | :12:14. | :12:17. | |
average family in private rented accommodation could have looked | :12:18. | :12:22. | |
forward to a warmer home and saved hundreds of pounds per year. The | :12:23. | :12:29. | |
damage is not limited to finances, a cold home damages the health and | :12:30. | :12:34. | |
well-being of constituents. Evidence proves that living in a cold home | :12:35. | :12:41. | |
aggravates health problems, including circulatory problems, | :12:42. | :12:47. | |
cardiovascular and mental health. Living in a cold home leads to | :12:48. | :12:50. | |
premature death in the winter months. The rate of premature death | :12:51. | :12:58. | |
in Bradford for 2010-13 was over 22%. 5% higher than for the whole of | :12:59. | :13:04. | |
the Yorkshire and Humber region and for England as a whole. People are | :13:05. | :13:10. | |
literally paying for fuel poverty with their lives. This situation | :13:11. | :13:15. | |
must not go on. This government must take action to tackle fuel poverty. | :13:16. | :13:22. | |
Soaring energy costs and cuts to energy efficiency schemes is pushing | :13:23. | :13:25. | |
hard-pressed families in Bradford close to the edge. For many, the | :13:26. | :13:30. | |
desperate choices between a warm home and food on the table. This is | :13:31. | :13:39. | |
an acceptable in this day and age. I'd like to thank every single | :13:40. | :13:45. | |
honourable member for their contribution today, particularly the | :13:46. | :13:51. | |
member for Weston-Super-Mare for bringing the issue of energy prices | :13:52. | :13:54. | |
and the treatment of consumers before the committee. The big six | :13:55. | :13:59. | |
have a lot to answer for rewarding long-term customers who have been | :14:00. | :14:04. | |
loyal with the highest tariffs is simply appalling. Many of these | :14:05. | :14:09. | |
individuals are elderly, vulnerable, disabled, have learning disability | :14:10. | :14:13. | |
or mental health problems and can least afford it. My own grandmother | :14:14. | :14:17. | |
at the time of her transfer to hospital in her 90s, when we | :14:18. | :14:21. | |
examined the tariff she was playing was around two times more than what | :14:22. | :14:28. | |
we were. Pensioners have a tight budget and maybe frail and very | :14:29. | :14:34. | |
elderly relying on heating to prevent pneumonia. How can these | :14:35. | :14:38. | |
companies sleep at night? There has been a lot of talk about switching | :14:39. | :14:43. | |
and why we don't do it more. I hope I'm not the only person who has been | :14:44. | :14:49. | |
bamboozled by energy tariffs. I find it absolutely income | :14:50. | :14:58. | |
incomprehensible and incomparable. Comparing day rates, nitrates and | :14:59. | :15:03. | |
standard daily charges, without a Ph.D. In mathematics it is all but | :15:04. | :15:07. | |
impossible. On two occasions I switched rates to change money and | :15:08. | :15:11. | |
found my bill had increased. I cannot help but think this is made, | :15:12. | :15:23. | |
the gated on purpose. A relative energy cup has been proposed to | :15:24. | :15:27. | |
prevent those being mercilessly ripped off and this is supported by | :15:28. | :15:31. | |
a number of competitor brands so I would urge the Minister to review | :15:32. | :15:36. | |
this proposal. It may be an interim solution as described but it will | :15:37. | :15:42. | |
save customers, consumers, constituents money. Our focus should | :15:43. | :15:44. | |
be and must be on them. The honourable member for Hartlepool | :15:45. | :15:54. | |
has raised the exorbitant differential in price if consumers | :15:55. | :15:57. | |
make the wrong decision. He highlights the big six off do knock | :15:58. | :16:08. | |
back in the interests of customers. Over the years we have had many | :16:09. | :16:13. | |
debates over the big six. Would you not agree that we need an enquiry | :16:14. | :16:17. | |
into how the big six operate because it seems to me they are a cartel | :16:18. | :16:23. | |
that price fix and at the end of the day customers suffer because of | :16:24. | :16:28. | |
that. I packed the honourable gentleman for his extremely | :16:29. | :16:34. | |
important point and today it has been highlighted by many members | :16:35. | :16:38. | |
that they feel it is a monopoly and consumers must be put at the heart | :16:39. | :16:45. | |
of energy pricing. The honourable member from Hartlepool described | :16:46. | :16:48. | |
quite appropriately the difficulties people experienced in shifting | :16:49. | :16:52. | |
supplier and that energy prices have reduced, but prices have been hiked. | :16:53. | :16:56. | |
This in itself is an absolute disgrace. Mention today has been | :16:57. | :17:03. | |
made of smart meters. Smart meters, although they help individuals | :17:04. | :17:07. | |
monitor energy usage, it places responsibility on the consumer as | :17:08. | :17:11. | |
though they were using too much when the fact is they are paying too | :17:12. | :17:17. | |
much. Smart meters are not the sole answer and cos I feel must step up | :17:18. | :17:21. | |
and take responsibility. Right honourable friend has asked me to | :17:22. | :17:28. | |
raise that fuel property rates in the Western isles are the highest of | :17:29. | :17:33. | |
any in any local authority area in Scotland. The announcement by SSE | :17:34. | :17:38. | |
that they are to increase energy prices by 14.9% is a huge blow to | :17:39. | :17:43. | |
these constituents. What measurements will the government | :17:44. | :17:48. | |
take to address the issues faced exponentially by those on Ireland | :17:49. | :17:52. | |
and rural communities. The honourable lady from Brent Central | :17:53. | :17:56. | |
highlighted that just about managing families are being most affected in | :17:57. | :18:00. | |
the UK Government is not standing up for their rights. She also | :18:01. | :18:04. | |
highlighted the impact of fuel poverty, quite rightly. The | :18:05. | :18:09. | |
honourable lady from Don Valley gave an excellent contribution and | :18:10. | :18:12. | |
discussed the satisfaction levels with customers right across the UK | :18:13. | :18:16. | |
which she says should ring alarm bells to this government. She | :18:17. | :18:20. | |
highlighted the fact that those who struggled to pay are paying the | :18:21. | :18:26. | |
most. Meanwhile, company profits are increasing. The honourable lady | :18:27. | :18:30. | |
contributed from Bristol East and highlighted the Bristol energy | :18:31. | :18:36. | |
contribution to fairer pricing locally and the level of local fuel | :18:37. | :18:41. | |
poverty there. She is right to highlight her constituency concerns. | :18:42. | :18:46. | |
My honourable friend from North Ayrshire and Arran described the | :18:47. | :18:50. | |
situation in Scotland, particularly in rural and northern areas, and she | :18:51. | :18:56. | |
described it can take 21 days to switch supplier which puts people | :18:57. | :19:02. | |
off. The process is conflated. She described the need for the safeguard | :19:03. | :19:06. | |
tariff to be extended and consideration to reductions needed | :19:07. | :19:10. | |
on the standard tariff by a set time frame by this government. There are | :19:11. | :19:16. | |
rural areas in my constituency which are still off the grid and much more | :19:17. | :19:21. | |
needs to be done to support rural communities with little chance of | :19:22. | :19:27. | |
energy costs in changes and tight. I ask the Minister to address these | :19:28. | :19:31. | |
issues because these people are some of the people who are most badly | :19:32. | :19:37. | |
affected by changes in pricing. The honourable member for Bradford South | :19:38. | :19:43. | |
spoke of soaring energy prices and how the poor suffered | :19:44. | :19:47. | |
disproportionately in this regard. In terms of Scottish government | :19:48. | :19:51. | |
policy draft Scottish energy strategy is now open and I would | :19:52. | :19:56. | |
urge individuals who are interested to consult and give their opinions | :19:57. | :20:00. | |
on this. Our Scottish government remains committed to putting | :20:01. | :20:04. | |
consumers at the heart of policy and to its target on renewables. Today I | :20:05. | :20:09. | |
would urge the Minister to act because we do not need a postcode | :20:10. | :20:14. | |
lottery. The energy sector from all we have heard today needs urgent | :20:15. | :20:23. | |
reform, it needs it now and this reform must be made to serve | :20:24. | :20:25. | |
customers rather than to serve itself. Thank you, Mr Deputy | :20:26. | :20:32. | |
Speaker. We have had an excellent and powerful debate this afternoon | :20:33. | :20:41. | |
which I thank the honourable member for Weston-Super-Mare, and indeed | :20:42. | :20:45. | |
the right honourable member for Don Valley and the honourable member for | :20:46. | :20:49. | |
North Ayrshire and Arran for securing it for us this afternoon. I | :20:50. | :20:55. | |
know there were a number of issues relating to the televising of the | :20:56. | :21:00. | |
pitch, but clearly it was a very successful pitch as it turned out. | :21:01. | :21:04. | |
Indeed the wisdom of the backbench business committee in deciding that | :21:05. | :21:10. | |
this should be debated this afternoon has been borne out by the | :21:11. | :21:16. | |
powerful nurse of the contributions by members from Bristol West, Brent | :21:17. | :21:21. | |
Central, North Ayrshire and Arran and Bradford South. Although I want | :21:22. | :21:27. | |
to draw attention to some of the things those honourable members have | :21:28. | :21:33. | |
said this afternoon in particular, what I think we can agree is that | :21:34. | :21:40. | |
everybody this afternoon highlighted and emphasised just how broken the | :21:41. | :21:48. | |
present energy market is in terms of doing the best thing for customers, | :21:49. | :21:53. | |
which after all are at the heart of what we do in energy generation and | :21:54. | :22:01. | |
supply in the first place. I think in emphasising how broken the market | :22:02. | :22:09. | |
is we have got ourselves into, certainly as far as energy is | :22:10. | :22:14. | |
concerned, into a rather odd place. What we have been talking about this | :22:15. | :22:19. | |
afternoon is not, as we frequently do in this chamber, the plight of a | :22:20. | :22:25. | |
persecuted minority and what we might do about it, we are here this | :22:26. | :22:31. | |
afternoon talking about the plight of a persecuted majority and what we | :22:32. | :22:35. | |
might do about it. If we want to understand between ourselves that | :22:36. | :22:39. | |
the market is pretty broken to have got to this position in talking | :22:40. | :22:44. | |
about this issue, if that does not emphasise the point honourable | :22:45. | :22:47. | |
members were making this afternoon about how broken the market is, then | :22:48. | :22:56. | |
I think that does. In that market we have had very recently some eye | :22:57. | :23:04. | |
watering increases in prices. 10% on jewel fuel for a number of | :23:05. | :23:08. | |
countries, double-figure increases on electricity bills from other | :23:09. | :23:16. | |
companies and those price rises are justified by those companies as a | :23:17. | :23:25. | |
combination of wholesale prices, the government's environmental measures, | :23:26. | :23:32. | |
and even we have heard recently the impact of smart meters upon customer | :23:33. | :23:40. | |
prices. The problem is, of course, we have no easy way, as I will come | :23:41. | :23:46. | |
to in a minute, in actually assessing the extent to which those | :23:47. | :23:49. | |
claims are justified or not. One thing I think we can say is that the | :23:50. | :23:58. | |
idea, as my honourable friend the member for Don Valley has emphasised | :23:59. | :24:03. | |
this afternoon, we need to set one thing at rest, and that is that | :24:04. | :24:09. | |
those price rises are as a result of a low carbon levies. They are not. | :24:10. | :24:14. | |
Indeed, my honourable friend the member for Hartlepool set out the | :24:15. | :24:26. | |
recent report from the committee on climate change which indicated | :24:27. | :24:36. | |
overall only 9% of bills come from government energy measures. Indeed, | :24:37. | :24:41. | |
not only are those energy measures not a huge part of the overall bill, | :24:42. | :24:46. | |
those measures themselves go towards decreasing bills in the future in | :24:47. | :24:52. | |
terms of decreasing demand, increasing energy efficiency, and as | :24:53. | :24:55. | |
far as renewable energy is concerned, changing the merit order | :24:56. | :25:02. | |
of energy supply so that actually eventually the wholesale price of | :25:03. | :25:05. | |
energy can be driven down over a period. I am very grateful. I wonder | :25:06. | :25:11. | |
what my honourable friend things about this. E.ON last week justified | :25:12. | :25:19. | |
their jewel fuel price increase by setting it is due mainly, mainly, to | :25:20. | :25:24. | |
the rise of non-energy powers of the bill such as social and | :25:25. | :25:29. | |
environmental schemes which help customers use less energy. But today | :25:30. | :25:33. | |
they have announced big rises in profits primarily in conjunction | :25:34. | :25:40. | |
with government mandated energy efficient measures. They want their | :25:41. | :25:46. | |
cake and to eat it, don't they? Yes, Mr Deputy Speaker, my honourable | :25:47. | :25:50. | |
friend makes a powerful point. They do what their cake and to eat it, | :25:51. | :25:54. | |
but they are not sure where the cake is and we are not sure how which | :25:55. | :25:58. | |
bits of the cake come from which soars because the whole energy | :25:59. | :26:02. | |
market is non-transparent as it stands. That is a central feature of | :26:03. | :26:09. | |
being able to judge whether those price rises are justified or not. | :26:10. | :26:16. | |
What goes on in terms of the transactions that those energy | :26:17. | :26:20. | |
companies undertake in order to trade in order to haste their | :26:21. | :26:24. | |
trading, in order to bring the costs of wholesale into the retail market | :26:25. | :26:29. | |
are almost completely opaque and continue to be so. In addition to | :26:30. | :26:34. | |
that, as we have heard this afternoon, that persecuted minority | :26:35. | :26:41. | |
we are talking about gets hit always. They get hit by the price | :26:42. | :26:44. | |
rises and they get hit by paying the most expensive tariffs within the | :26:45. | :26:51. | |
company roster of tariffs. Not only do they pay the most expensive | :26:52. | :26:56. | |
tariffs, in some cases up to 90% of the customers of those companies are | :26:57. | :27:00. | |
actually paying those most expensive tariffs. Not only should we not | :27:01. | :27:07. | |
speak about these customers as if they were an endangered minority, | :27:08. | :27:11. | |
they are not, they are an endangered majority. And they are also a | :27:12. | :27:18. | |
majority which we have to stop talking about as if it is somehow | :27:19. | :27:22. | |
their fault that they have not switched. As if they are responsible | :27:23. | :27:27. | |
for not switching. We can see from the history again which my | :27:28. | :27:31. | |
honourable friend, the member for Don Valley, pointed out, the | :27:32. | :27:39. | |
correlation between those areas from which energy companies originally | :27:40. | :27:49. | |
came and how that sticky customer base relates to particular areas in | :27:50. | :27:52. | |
the country from which those companies originated. In fact in a | :27:53. | :27:58. | |
number of instances we can say a large proportion of those sticky | :27:59. | :28:02. | |
customers are those that the company inherited when they became | :28:03. | :28:05. | |
privatised and they have stayed with those companies ever since. | :28:06. | :28:09. | |
Admirable loyalty to those companies one might think an absolutely the | :28:10. | :28:19. | |
wrong thing to do to treat those companies like they are treating | :28:20. | :28:21. | |
them as we have heard this afternoon. It is a huge base of | :28:22. | :28:29. | |
customers and not to put too fine a point on it, as we have heard from | :28:30. | :28:34. | |
the honourable member for Weston-Super-Mare, because those | :28:35. | :28:41. | |
customers will pay more for less year after year, they will not | :28:42. | :28:47. | |
desert the company for a result and indeed they can be relied on to | :28:48. | :29:00. | |
bring not to the benefit of the company's finances. What I think is | :29:01. | :29:10. | |
the solution to that particular issue, what the CMA have been | :29:11. | :29:16. | |
pursuing, is to sort of playing those sticky customers for the | :29:17. | :29:20. | |
plight they find themselves in and say, if only you switched, | :29:21. | :29:25. | |
everything would be OK. Indeed that idea runs through the heart of the | :29:26. | :29:29. | |
recent CMA report on the energy market. Why don't all these sticky | :29:30. | :29:35. | |
customers switch? If they do not, how can we poke and prod them until | :29:36. | :29:40. | |
they do? If we keep prodding and poking and they do not switch, we | :29:41. | :29:44. | |
can get other companies into poke and prod them more and then they | :29:45. | :29:49. | |
might switch. That does not seem to me to be the sort of final remedy | :29:50. | :29:54. | |
that is that all satisfactory given the scale and the nature of the | :29:55. | :29:58. | |
market we see in front of us. We should not be surprised to read in | :29:59. | :30:04. | |
the principles attached to the provisional remedies that the CMA | :30:05. | :30:10. | |
put forward, the principles they operated the whole enquiry in just | :30:11. | :30:14. | |
recently that they say, it is through customers shopping around | :30:15. | :30:17. | |
and making choices between the offerings of rival suppliers that | :30:18. | :30:21. | |
the benefits of competition emerge. That is what they thought they were | :30:22. | :30:26. | |
doing with the enquiry. Whilst it is very welcome that they have come up | :30:27. | :30:36. | |
with the idea of putting a cap on tariffs for those customers on | :30:37. | :30:42. | |
prepaid meters, and by the way I pay tribute to my honourable friend for | :30:43. | :30:49. | |
Brent Central who has been quite seriously instrumental in getting | :30:50. | :30:51. | |
that particular arrangement forward in terms of her campaigning on the | :30:52. | :31:01. | |
status of those people on prepaid meters and the excesses they were | :31:02. | :31:06. | |
paying. So, that is welcome, but it does not do very much for the | :31:07. | :31:13. | |
overall issue of the fact that we know that those sticky customers are | :31:14. | :31:18. | |
not going to switch in a hurry. We know the energy companies know that. | :31:19. | :31:23. | |
We know there is no evidence that the energy companies are trembling | :31:24. | :31:27. | |
at the thought of their customers switching and are trimming their | :31:28. | :31:33. | |
rises accordingly. The evidence is that switching is a substantial | :31:34. | :31:36. | |
occupation for some and not most and switching totals concern and conceal | :31:37. | :31:46. | |
a town of switching between multiple companies for some people and we | :31:47. | :31:48. | |
have almost a perfect storm. Ofgen didn't see a need for... | :31:49. | :32:10. | |
Customers paying out on disadvantageous tariffs. We need to | :32:11. | :32:16. | |
get a grip on that problem. We've also heard this afternoon that a | :32:17. | :32:20. | |
grip has been promised on a number of occasions. We've heard that the | :32:21. | :32:31. | |
Prime Minister suggested that companies are in the last chance | :32:32. | :32:35. | |
saloon and something has to happen. Very little has actually taken | :32:36. | :32:41. | |
place. All that despite the fact that as honourable members have | :32:42. | :32:45. | |
mentioned it is quite plain that customers have been overcharged for | :32:46. | :33:00. | |
a long period by energy companies. Yes, a price cap, regulated price | :33:01. | :33:05. | |
cap, within which competition could take place I think is a very good | :33:06. | :33:14. | |
idea. I recognise, however, that that price cap has to be taken | :33:15. | :33:21. | |
within the context of the fact that there will be real pressures on | :33:22. | :33:27. | |
costs. It is true that wholesale markets do on occasion go up and it | :33:28. | :33:30. | |
is true that energy companies will have to absorb that in terms of | :33:31. | :33:36. | |
price increases. So a cap that allows that arrangement to take | :33:37. | :33:40. | |
place but within which work can be done to ensure the competition | :33:41. | :33:48. | |
remains is, I think, a good starting idea, as, indeed, is the idea that | :33:49. | :33:58. | |
sticky customers, perhaps, should be after a certain period of time taken | :33:59. | :34:04. | |
into either protected tariffs, as my right honourable friend, the member | :34:05. | :34:10. | |
for Don Valley, suggested, or onto the lowest tariff the company offers | :34:11. | :34:15. | |
over a period of time as a method of starting to take action as far as | :34:16. | :34:20. | |
sticky customers are concerned. I think there is rather more goes into | :34:21. | :34:24. | |
the present dysfunction of the energy market than just sticky | :34:25. | :34:30. | |
customers. Indeed, reflecting on what Ofgem said recently not seeing | :34:31. | :34:40. | |
a case for significant price rises for energy costs that could have | :34:41. | :34:45. | |
seen well in advance. It's not clear whether Ofgem mean companies buying | :34:46. | :34:52. | |
wisely in advance, well in advance, or suppliers buying a long time in | :34:53. | :35:03. | |
advance. It means price rises shouldn't spike in the way that they | :35:04. | :35:07. | |
often are but we don't know what companies are two when they are | :35:08. | :35:11. | |
buying. For example, we don't know what is happening as far as energy | :35:12. | :35:20. | |
company trades are concerned. It is not actually visible what many of | :35:21. | :35:26. | |
those consist of. Where they are vertically integrated we don't know | :35:27. | :35:29. | |
what happens when they trade with themselves. We don't know whether | :35:30. | :35:33. | |
this reflects a fair trade market in forward trading. We need to open up | :35:34. | :35:40. | |
the market to full transparency, not just a day ahead but right along the | :35:41. | :35:46. | |
curve so we can act to abuse prevent abuses of trading positions which | :35:47. | :35:50. | |
take place to the disadvantage of customs. While transparency is a | :35:51. | :36:02. | |
sensible and worthwhile thing to aim for, from a consumer's point of | :36:03. | :36:06. | |
view, it doesn't matter terribly much at all because consumers don't | :36:07. | :36:10. | |
care whether or not their supplier is doing a good or bad hedging | :36:11. | :36:16. | |
strategy. That is up to the supplier to manage. Some will get it right | :36:17. | :36:22. | |
and some wrong but it should hit their managers, bonuses and | :36:23. | :36:25. | |
shareholders returns and not the consumer price to be paid. | :36:26. | :36:29. | |
Therefore, we want to understand this but we shouldn't seek to use it | :36:30. | :36:34. | |
as a justification for high prices low, ultimately, we should be | :36:35. | :36:37. | |
tougher than that on these suppliers. Indeed. An important | :36:38. | :36:44. | |
point about the relationship with the customer for those transactions. | :36:45. | :36:55. | |
Particularly with vertical integration, the way that those | :36:56. | :36:58. | |
transactions are made cause money that should go to the customer to be | :36:59. | :37:03. | |
siphoned off in respect of opaque trades. It is important to the | :37:04. | :37:07. | |
customer in the long term which is why we do need full transparency in | :37:08. | :37:13. | |
all those market trade arrangements. He makes a good point about vertical | :37:14. | :37:21. | |
integration. Isn't it the case that in this dark, dark world of | :37:22. | :37:27. | |
electricity generating supply, amongst the big six, they both | :37:28. | :37:31. | |
generate electricity, sell it to themselves and then sell it on to | :37:32. | :37:37. | |
ours. That impact on prices, fair or not, it excludes others, both | :37:38. | :37:42. | |
independent generators and retailers coming into the market and putting | :37:43. | :37:50. | |
downward pressure on price. My right honourable friend makes a point | :37:51. | :37:56. | |
which I would say is spot on. Not only is it spot on but I think it | :37:57. | :38:02. | |
demonstrates that we do need to understand a lot more about how | :38:03. | :38:09. | |
those trades actually work and who is doing what to whom and sometimes | :38:10. | :38:16. | |
who is doing what to themselves and within what is a conjugated picture | :38:17. | :38:23. | |
of trading, right up to closure, trading in times of scarcity, the | :38:24. | :38:29. | |
suggestion that on occasions generators can pull back on | :38:30. | :38:33. | |
generating in order to trade when the generation becomes more trade | :38:34. | :38:36. | |
and get a lot more money for that, all sorts of things such as that, | :38:37. | :38:43. | |
all of which, are badly served in terms of accountability of those | :38:44. | :38:45. | |
companies for what money goes where and who is benefiting from that | :38:46. | :38:49. | |
money and what happens to a customer in the end. Via the opacity of the | :38:50. | :38:59. | |
whole system. I believe that we not only need to open up the market to | :39:00. | :39:03. | |
full transparency but we need to open a pool system of trading so | :39:04. | :39:09. | |
that all trade into the pool and all trade out is conducted transparently | :39:10. | :39:18. | |
and on a level playing field for all suppliers. This happens in | :39:19. | :39:22. | |
Scandinavia so why can it not work here? That doesn't mean that | :39:23. | :39:27. | |
companies can't make money, as Ofgem says, if they have good purchasing | :39:28. | :39:32. | |
and hedging strategies, they can. What they won't be able to do is | :39:33. | :39:35. | |
pass benefits on to themselves that should go to the customer. I think | :39:36. | :39:42. | |
we need action on all this urgently. It is perhaps ironic that as the | :39:43. | :39:48. | |
honourable member for Don Valley will recall well, we have between 's | :39:49. | :39:57. | |
been through a number of reforms as far as energy is concerned and bills | :39:58. | :40:04. | |
through the house under the heading of energy market reform. We have | :40:05. | :40:09. | |
seen a great deal of reform but one thing we haven't seen is the reform | :40:10. | :40:12. | |
of the energy market in all that time. It's actually time we got | :40:13. | :40:17. | |
serious about the reform of the energy market in the way it works, | :40:18. | :40:22. | |
in the way it is opaque, in the way it doesn't serve those sticky | :40:23. | :40:27. | |
customers properly and indeed victimises and demonises those | :40:28. | :40:31. | |
sticky customers in terms of how the energy companies are treating that | :40:32. | :40:34. | |
majority of those customers. We need action of all this. Otherwise, we | :40:35. | :40:40. | |
are going to be condemned to the same old cycle of price rise, | :40:41. | :40:46. | |
muttering, remedies tossed around, remedies gathering dust on ourselves | :40:47. | :40:52. | |
and another round of price rises. I commend this motion but I think it | :40:53. | :40:57. | |
should herald the start of a serious look at how the whole market looks | :40:58. | :41:02. | |
and how the customer can finally be brought to the centre of it. It's a | :41:03. | :41:06. | |
fine start what we need to follow it through to the end. Thank you for | :41:07. | :41:17. | |
the second debate I've had the pleasure of speaking in this week. | :41:18. | :41:22. | |
You're getting to be a habit with me and I thoroughly welcome that. Let | :41:23. | :41:33. | |
that be noted in the record. My great friend the member for super | :41:34. | :41:37. | |
Mare should be congratulated on fighting his way through the Dragons | :41:38. | :41:40. | |
of Dragon 's Den and securing the beauty of this debate which I | :41:41. | :41:46. | |
greatly welcome. Whatever it effects, it has sent a powerful | :41:47. | :41:50. | |
signal of the feelings, not just of the members who have spoken so well | :41:51. | :41:55. | |
yet and down the country in this house as to be issues that we are | :41:56. | :42:01. | |
describing. If I may, I'm going to talk about those issues, policy and | :42:02. | :42:08. | |
I will try to weave responses to the interventions to the speech made in | :42:09. | :42:13. | |
my comments. As you will know, the government is fully focused on | :42:14. | :42:17. | |
getting the best deal for energy consumers and ensuring the market | :42:18. | :42:24. | |
works for everyone and we absolutely expect energy companies to treat all | :42:25. | :42:27. | |
their customers fairly and, therefore, we continue, as others | :42:28. | :42:33. | |
are, to be concerned by price rises that hid billions of people in | :42:34. | :42:37. | |
already paying more than they need to. It is not acceptable that five | :42:38. | :42:43. | |
of the larger suppliers are increasing their standard variable | :42:44. | :42:47. | |
prices. This will it customers hard in the pocket where they are already | :42:48. | :42:52. | |
paying more than they need to. Wholesale prices that account for | :42:53. | :42:55. | |
more than half of an average bill, are still it must be noted lower | :42:56. | :43:01. | |
than they were in 2014. This is not a moment for crisis but this is a | :43:02. | :43:07. | |
moment for sober reflection. One other thing, prices are not the same | :43:08. | :43:12. | |
thing as bills. I would just refer colleagues to the recent report by | :43:13. | :43:16. | |
the select committee in the House of Lords which reminds us that | :43:17. | :43:20. | |
electricity bills have risen very little in the last 25 years. The | :43:21. | :43:26. | |
reason for that is because measures of insulation, measures to improve | :43:27. | :43:29. | |
appliances and other things. That isn't to say however that prices are | :43:30. | :43:34. | |
not important and price rise is a matter of concern. I'm very pleased | :43:35. | :43:43. | |
to take the intervention. It is important that we have a candid and | :43:44. | :43:46. | |
open and honest discussion and he makes a very good point around the | :43:47. | :43:51. | |
issue of prices versus hills. The amount of energy is we have used has | :43:52. | :43:57. | |
gone down significantly in ten years but isn't he concerned as I am that | :43:58. | :44:01. | |
maybe the big six are using that situation to keep their tariffs on | :44:02. | :44:08. | |
welcome rehired because they are having to compensate for the fact | :44:09. | :44:13. | |
that we are using less energy. It's a very interesting suggestion that | :44:14. | :44:17. | |
the changes may have had the effect of cushioning the effect of price | :44:18. | :44:21. | |
rising in the way she has described. I thank her for that board. I'd like | :44:22. | :44:27. | |
to give that some reflection myself. Happy to take another intervention. | :44:28. | :44:33. | |
To follow up on my right honourable co-sponsor's intervention there. The | :44:34. | :44:39. | |
point about prices versus bills is very important. With the Minister | :44:40. | :44:43. | |
agree that if prices stay on fairly or unnecessarily high, one of the | :44:44. | :44:46. | |
government's main goals of improving overall productivity right the way | :44:47. | :44:52. | |
through the economy and particularly for vitally important and central | :44:53. | :44:57. | |
parts of the cost base for most businesses, which is energy bills, | :44:58. | :45:01. | |
cannot be achieved or is much harder to achieve, if energy bills are | :45:02. | :45:05. | |
higher than they need to be. We can do more with less if we are more | :45:06. | :45:07. | |
efficient in our energy sector. This is a debate on retail and the | :45:08. | :45:18. | |
problems are less marked in many areas of the business market but it | :45:19. | :45:22. | |
is undoubtedly true that business bills must be kept as low as | :45:23. | :45:27. | |
possible and the government has undertaken several steps precisely | :45:28. | :45:32. | |
with the purpose of achieving that. May I go on to say that with | :45:33. | :45:38. | |
suppliers as has been noted by colleagues across the host by being | :45:39. | :45:44. | |
there take up to two years in advance they should be protected | :45:45. | :45:48. | |
from recent fluctuations in the place of wholesale energy. We have | :45:49. | :45:51. | |
seen some suppliers who have chosen to act differently to freeze their | :45:52. | :45:54. | |
standard variable prices through winter and beyond and this alone | :45:55. | :46:00. | |
shows the prose rises are not inevitable. It is a fact the | :46:01. | :46:07. | |
majority of customers, around 66%, are in standard variable tariffs and | :46:08. | :46:11. | |
continue to pay considerably more than those on fixed term deals. The | :46:12. | :46:16. | |
CMA highly dubious customers are losing out by wilted estimated, the | :46:17. | :46:24. | |
number has been disputed, but an estimated ?1.4 billion in the last | :46:25. | :46:33. | |
few years. There have been persistently high differentials | :46:34. | :46:37. | |
between the cheapest fixed deals and standard variable tariffs. The | :46:38. | :46:41. | |
latest from Ofgem has shown that differential to be around ?200. It | :46:42. | :46:46. | |
is those, and we have had a very good focus today on fuel poverty, as | :46:47. | :46:51. | |
we did the other night, it is those who can least afford it who are most | :46:52. | :46:56. | |
likely to be losing out, households with low incomes, B Ball with low | :46:57. | :47:00. | |
qualifications, those in the rented sector, those over 65 are more | :47:01. | :47:05. | |
likely to lose out than others. These recent price rises the to | :47:06. | :47:09. | |
underline the fact that the majority of consumers are paying more than | :47:10. | :47:14. | |
they need to. What can be done about it? Let me talk about competition. | :47:15. | :47:22. | |
Effective competition in many markets has the effect of driving | :47:23. | :47:28. | |
down prices, promoting innovation and assisting improvement in | :47:29. | :47:31. | |
customer services. The government has worked very hard with Ofgem to | :47:32. | :47:42. | |
try to improve competition. The lady mentioned Groundhog Day. Casting | :47:43. | :47:47. | |
herself in the role of Andy McDowell. That is how I would see | :47:48. | :47:53. | |
her. There has been some progress. It is not fair to say we are in | :47:54. | :47:58. | |
Groundhog Day. Members rightly point to the fact that there are now over | :47:59. | :48:03. | |
50 energy suppliers in the domestic market up from 13 in 2010 and there | :48:04. | :48:08. | |
are the potential new entrants including local authorities waiting | :48:09. | :48:15. | |
in the wings. We welcome them to the market. Independent suppliers have | :48:16. | :48:19. | |
over 18% of the dual fuel market up from less than 1% seven years ago. I | :48:20. | :48:26. | |
am pleased to hear about Bristol East, the lady from Bristol East to | :48:27. | :48:31. | |
mention Bristol energy and the social conscience they bring to | :48:32. | :48:36. | |
energy supply. That is typical of 80 of new and wider ranging suppliers | :48:37. | :48:40. | |
we have seen including not-for-profit suppliers and housing | :48:41. | :48:46. | |
providers. Smaller suppliers, those are the who are leading the way in | :48:47. | :48:53. | |
smart PPA and other uses of technology to support customers in | :48:54. | :48:55. | |
finding the best deal using their mobile phones. We had a very good | :48:56. | :49:01. | |
debate in discussing switching as well. That has been rightly noted | :49:02. | :49:05. | |
that an increasing number of households are switching their | :49:06. | :49:09. | |
energy supplier with 7.8 million energy accounts, an increase of 28% | :49:10. | :49:14. | |
on the previous year. This is putting in place competitive | :49:15. | :49:24. | |
pressure. There is some competitive pressure on the big six. It is still | :49:25. | :49:29. | |
only 15.8% of gas and electricity customers so it is a long way before | :49:30. | :49:36. | |
anyone should feel that a large number of people are actively | :49:37. | :49:39. | |
availing themselves of the opportunity to switch. That one | :49:40. | :49:46. | |
might expect. One might expect in a more competitive market. For too | :49:47. | :49:48. | |
long to many customers have been left on poor value deals. At the end | :49:49. | :49:55. | |
of the last year we announced to the government new measures to increase | :49:56. | :49:57. | |
transparency for consumers. I welcome the point made about | :49:58. | :50:05. | |
transparency. He is right. It has been found in several studies the | :50:06. | :50:08. | |
markets are less transparent here in many ways than one might like. And | :50:09. | :50:15. | |
effort was made to start to begin to get increased transparency of | :50:16. | :50:18. | |
consumers including the publication of an energy supplier league table | :50:19. | :50:23. | |
by Ofgem designed to shine a light on the most expensive standard | :50:24. | :50:27. | |
variable tariffs. We know some consumers worried that switching | :50:28. | :50:30. | |
supplier may be difficult and time-consuming. It is not just an | :50:31. | :50:34. | |
economic matter. It is a cultural matter. You must recognise that are | :50:35. | :50:39. | |
not simply allow purely economic analysis of the cove. We are also | :50:40. | :50:44. | |
taking forward proposals the mandate my data in the energy sector and | :50:45. | :50:49. | |
that should also have an effect. My data will allow consumers to get | :50:50. | :50:54. | |
hold of they are due date electronically anti-user to find the | :50:55. | :50:58. | |
best deal. It will make the switching process quicker and easier | :50:59. | :51:02. | |
and more accurate and with luck will allow people to switch using | :51:03. | :51:06. | |
smartphone applications more easily. We are very keen that the benefits | :51:07. | :51:12. | |
of this are not restricted in any sense to the tech savvy but to | :51:13. | :51:15. | |
anybody who owns a mobile phone at the very least. We will be working | :51:16. | :51:20. | |
with industry, switching companies and consumer groups to ensure all | :51:21. | :51:26. | |
consumers can switch. The member for North Ayrshire and Arran raised the | :51:27. | :51:30. | |
issue of the time it takes to switch supplier, rightly raising that. It | :51:31. | :51:37. | |
used to be five weeks. Working with Ofgem to get down to 21 days. Having | :51:38. | :51:43. | |
done that to push it down towards where it should be which is 24 | :51:44. | :51:48. | |
hours. That would be a major improvement to our system. We have | :51:49. | :51:52. | |
also had discussion with customer service. There has been some | :51:53. | :51:56. | |
improvement. The latest Ofgem data should suppliers received over 3 | :51:57. | :52:01. | |
million fewer customer complaints compared to 2014 but with 3.5 | :52:02. | :52:06. | |
million complaints in any case that was not saying much, they still have | :52:07. | :52:11. | |
a long way to go. We are working with Ofgem and the ombudsman to | :52:12. | :52:14. | |
identify and fix systemic issues which have the effect of damaging | :52:15. | :52:20. | |
customer service. And Ofgem review last year has resulted in greater | :52:21. | :52:24. | |
levels of communication between Ofgem, the ombudsman and citizens | :52:25. | :52:28. | |
advice. Citizens advise an organisation I greatly esteem are | :52:29. | :52:38. | |
working on area tings system. Turning to the CMA report, the CMA | :52:39. | :52:46. | |
had some positive things to report after concluding its two-year energy | :52:47. | :52:50. | |
market investigation. They found that wholesale energy markets and | :52:51. | :52:55. | |
the retail market for larger businesses are working well but for | :52:56. | :52:59. | |
domestic energy suppliers the CMA report as a wake-up call. It is | :53:00. | :53:05. | |
important to note that the report was not absolutely unequivocal in | :53:06. | :53:08. | |
every sense and it has been contested. A letter from some very | :53:09. | :53:12. | |
senior energy regulators who raised the question whether and not it is | :53:13. | :53:17. | |
true and it is important to acknowledge that. The CMA's position | :53:18. | :53:22. | |
was clear which was that consumers should be able to trust energy | :53:23. | :53:25. | |
companies are now they are getting a good deal. They find that a lack of | :53:26. | :53:30. | |
competition meant that something like 70% of big six customers | :53:31. | :53:34. | |
remained on the most expensive tariff despite savings they could | :53:35. | :53:41. | |
make by moving to another tariff. We have encouraged and Ofgem are | :53:42. | :53:46. | |
introducing a prepayment meter cap which will protect 4 million | :53:47. | :53:50. | |
households across Britain from the beginning of next month. We are | :53:51. | :53:58. | |
determined to go further and we have a consumer green paper in prospect | :53:59. | :54:03. | |
which will examine specific sectors but we will also respond to the CMA | :54:04. | :54:10. | |
energy market report separately and sooner rather than later. Our green | :54:11. | :54:15. | |
paper will examine markets that are not working fairly for consumers. In | :54:16. | :54:19. | |
general consumers in this country enjoys strong protection in an | :54:20. | :54:24. | |
effective regime that helps them get the best deal but where those | :54:25. | :54:27. | |
markets are not doing their job, where competition is not effective, | :54:28. | :54:35. | |
government will look to intervene to improve competition and to | :54:36. | :54:37. | |
strengthen outcomes. The Green paper will complement and fit within the | :54:38. | :54:41. | |
government's industrial strategy to build on work delivering an economy | :54:42. | :54:45. | |
that works for everyone. We have already announced proposals to end | :54:46. | :54:51. | |
subscription traps than shortening small print and new powers to impose | :54:52. | :54:55. | |
fines on companies who mistreat customers. The Green paper will | :54:56. | :54:57. | |
provide more detail on these proposals. A couple of reflections | :54:58. | :55:03. | |
on some of the very helpful comments that are being made. I was intrigued | :55:04. | :55:10. | |
to know that the lady from Brent Central that it is Labour policy to | :55:11. | :55:15. | |
renationalise the big six companies. I welcome further clarification on | :55:16. | :55:19. | |
that together with an explanation of how much it would cost and how it | :55:20. | :55:24. | |
would be funded. An interesting contribution. I can graduate and | :55:25. | :55:30. | |
thank my shadow for rectal and dicing the complexity of the problem | :55:31. | :55:35. | |
we face -- recognising the complexity. He is right to focus on | :55:36. | :55:43. | |
transparency. To my friend from Weston-Super-Mare, these things will | :55:44. | :55:48. | |
be taken as contributions and reflected on by government. It is | :55:49. | :55:51. | |
worth saying that the government's record in energy markets is not | :55:52. | :55:57. | |
absolutely unblemished. There have been several occasions on which | :55:58. | :56:02. | |
changes have been made and had to be unwind because they were contrary to | :56:03. | :56:06. | |
competitive pricing or innovation and that is worth recognising. I | :56:07. | :56:12. | |
have listened very positively to what he has said about the | :56:13. | :56:15. | |
government being prepared to intervene when a market is not | :56:16. | :56:19. | |
working. Can I remind him of comments from the CBI on the energy | :56:20. | :56:25. | |
market which refers it -- to it as a managed market because energy is an | :56:26. | :56:29. | |
essential to life product which sets itself apart from some of the | :56:30. | :56:34. | |
discussions we had earlier about toothpaste and other products? IR | :56:35. | :56:37. | |
agenda stand up for what government should do which is set the framework | :56:38. | :56:43. | |
in which markets operate. The point is well taken and you do not have to | :56:44. | :56:49. | |
look far into the Wealth of Nations to know that markets are reflective | :56:50. | :56:53. | |
when they are as deep as possible. The division of labour and therefore | :56:54. | :56:59. | |
value generation can be realised. Also when they are supported by a | :57:00. | :57:02. | |
strong state and a strong system of justice and enforcement. That is | :57:03. | :57:08. | |
absolutely the tone of approach to the markets in this case. May I find | :57:09. | :57:17. | |
members for a very thoughtful and interesting debate which has covered | :57:18. | :57:21. | |
a great deal of ground in a limited time? We are acting to make | :57:22. | :57:29. | |
switching easier and quicker. We are rolling out smart meters and | :57:30. | :57:32. | |
continuing to help low-income houses with energy bills. We recognise the | :57:33. | :57:36. | |
CMA did important work in highlighting how much consumers are | :57:37. | :57:41. | |
currently losing out. We recognise recent price rises underlined the | :57:42. | :57:45. | |
fact the majority of consumers are paying more than they need to. We | :57:46. | :57:50. | |
believe the current practice as it stands is not acceptable and we will | :57:51. | :57:54. | |
set out proposals to address these issues shortly. I wanted to repeat | :57:55. | :58:02. | |
my thanks not only to my co-sponsors but to everybody else who has taken | :58:03. | :58:08. | |
part in this debate. It has been full of passion and determination. | :58:09. | :58:11. | |
This is an issue which has been around for far too long and is an | :58:12. | :58:18. | |
issue which, in spite of the best efforts of successive governments, | :58:19. | :58:21. | |
has not got better sufficiently quickly, and therefore there is | :58:22. | :58:27. | |
clearly further to travel. I was very reassured by the direction of | :58:28. | :58:30. | |
travel which the minister has just laid out and I would like to welcome | :58:31. | :58:35. | |
some of his comments about rolling out my data which is something which | :58:36. | :58:38. | |
should solve many of the problems on data access which are obstacles to | :58:39. | :58:44. | |
switching. It has been around for six years and we are waiting, we | :58:45. | :58:50. | |
anticipate and hope that it will arrive very shortly. It is good to | :58:51. | :58:56. | |
hear there is fresh impetus behind that move and equally the point | :58:57. | :59:00. | |
about 24 hour switching again being something that will help to drive up | :59:01. | :59:04. | |
the levels of competition which writer away across the political | :59:05. | :59:07. | |
spectrum and throughout this debate that has been a recognition that | :59:08. | :59:12. | |
progress towards a properly competitive market where the big six | :59:13. | :59:15. | |
suppliers feel under pressure to look after their customers has been | :59:16. | :59:20. | |
too slow and needs to move faster. I am reassured to hear him making that | :59:21. | :59:23. | |
point and that commitment from the government benches. He has also said | :59:24. | :59:30. | |
it is not moving fast enough. Clear implication of all of the speeches | :59:31. | :59:34. | |
we have heard so far today is that politically the way is clear. If | :59:35. | :59:40. | |
there is something where proposals from people like myself, and I would | :59:41. | :59:44. | |
count myself as one of the most born in born drive free marketeers you | :59:45. | :59:52. | |
would find, looking at a relative price cap or other measures, the | :59:53. | :59:56. | |
chairman of the select committee, the front bench speaker for SNP, and | :59:57. | :00:01. | |
acceptance from the Labour Party front bench this is worth looking | :00:02. | :00:06. | |
at, we can say categorically this is an idea whose time has come, a | :00:07. | :00:12. | |
thirst for action, movement, and therefore from the government point | :00:13. | :00:15. | |
of view they should be bold and willing to move soon. | :00:16. | :00:21. | |
As many as are of the opinion, say "aye". To the contrary, "no". . The | :00:22. | :00:28. | |
ayes have it. I beg to move this house now do adjourn. As many as are | :00:29. | :00:32. | |
of the opinion, say "aye". To the contrary, "no". . The ayes have it. | :00:33. | :00:34. | |
Order, order. | :00:35. | :00:42. |