:00:00. > :00:00.some of those centres myself last week, we will be writing to all
:00:00. > :00:00.suppliers across the country to make sure they are fully aware of their
:00:00. > :00:10.duty of care and to make sure fire safety is of paramount importance
:00:11. > :00:14.for them. They must move on, demand has exceeded supply as is often the
:00:15. > :00:24.case in this place. Urgent question, Doctor Alan Whitehead. Thank you, Mr
:00:25. > :00:28.Speaker. To ask the Secretary of State if you will make a statement
:00:29. > :00:40.on the Government's intention for an energy price cap. The Competition
:00:41. > :00:43.and Markets Authority, following a two year inquiry, found energy
:00:44. > :00:47.customers on standard variable tariffs were paying on average ?1.4
:00:48. > :00:53.billion a year more than would be the case in a competitive market,
:00:54. > :00:57.that is completely unacceptable. And so my party's manifesto committed to
:00:58. > :01:03.introduce safeguard tariff to extend the price protection currently in
:01:04. > :01:08.place for some vulnerable customers, those on prepayment metres, to more
:01:09. > :01:15.customers on the poorest value tariffs. Ofgem can oppose such a
:01:16. > :01:19.price cap without delay. I wrote on the 21st of June to the chief
:01:20. > :01:23.Executive of Ofgem asking them to use the regulators powers to do
:01:24. > :01:27.that. Today the regulator has replied and announced it will work
:01:28. > :01:30.with consumer groups to take measures including extending the
:01:31. > :01:36.current safeguard tariff for those on prepayment metres to a wider
:01:37. > :01:40.group of consumers and to move urgently to implement these changes.
:01:41. > :01:45.I welcome this initial proposal. It is a step in the right direction,
:01:46. > :01:50.but I will wait to see the actual proposals and to see them turned
:01:51. > :01:53.into action to cut bills. The test of whether the regulators changes go
:01:54. > :02:00.far enough is whether they move sufficiently to eradicate the
:02:01. > :02:04.detriment of consumers that the CMA has identified. I remain prepared to
:02:05. > :02:13.legislate if they do not and I hope such legislation would command wide
:02:14. > :02:15.support across the House. Does the Secretary of State recall during the
:02:16. > :02:20.election has party placed the promise of an overall price cap on
:02:21. > :02:24.energy prices at the centre of their manifesto and does he recall the
:02:25. > :02:29.Prime Minister stating, I am making this promise, if I am re-elected I
:02:30. > :02:33.will take action to end this injustice by placing a cap on unfair
:02:34. > :02:36.energy prices which will protect around 17 million families on
:02:37. > :02:40.standard variable tariffs from being exploited with sudden and
:02:41. > :02:45.unjustified increases in bills. Does he accept the response to his letter
:02:46. > :02:49.on the 21st of June falls short of implementing that promise and
:02:50. > :02:53.although there are welcome suggestions on capping charges for
:02:54. > :02:59.prepayment metres, those measures would only affect 2.5 million
:03:00. > :03:03.customers leaving over 14 million customers completely unprotected
:03:04. > :03:07.from price rises. Can the Minister confirm he didn't in fact ask Ofgem
:03:08. > :03:19.to consider introducing a general price cap in his letter to them, and
:03:20. > :03:23.he -- can he tell the House why not. Does the Secretary of State intends
:03:24. > :03:27.to pass legislation that requires Ofgem to introduce the price cap or
:03:28. > :03:31.is he content to let his firm election promise of a cap for by the
:03:32. > :03:36.wayside? And if he does, what does he have to say to the 17 million
:03:37. > :03:39.people on standard variable tariffs who thought relief from rip-off
:03:40. > :03:44.price rises was on its way and he will now feel completely betrayed by
:03:45. > :03:47.this policy U-turn. I am grateful to the honourable gentleman for his
:03:48. > :03:51.questions and I hope you will see in my response to his initial question
:03:52. > :03:56.I have answered many of the points he made. He will share the view that
:03:57. > :04:00.I do, because I think it is his view as well, that we should act as soon
:04:01. > :04:08.as possible to provide this relief to consumers. To do that, that means
:04:09. > :04:11.Ofgem have to use those powers. They have the powers, they can use them
:04:12. > :04:17.immediately and I have encouraged them to do so. In terms of the
:04:18. > :04:23.letter that I sent that he mentions, he will know I'm sure, having
:04:24. > :04:26.studied the prospective use of these powers, if he was hoping to come
:04:27. > :04:33.into government, that the legislation requires me to ask for
:04:34. > :04:38.advice from Ofgem. That is exactly the terms in which I did so. They
:04:39. > :04:44.have responded to that and what they have said is that they will work
:04:45. > :04:51.with consumer groups to identify how far this protection should go. But I
:04:52. > :04:59.have been very clear that I want to see this detriment, ?1.4 billion a
:05:00. > :05:03.year eradicated. It is a test of the responsiveness of Ofgem that they
:05:04. > :05:06.should use their powers to this end, and I think our constituents for
:05:07. > :05:14.members on whichever side of the House would look to the regulator to
:05:15. > :05:21.make use of the powers they have to protect this unacceptable... To
:05:22. > :05:28.prevent this unacceptable situation continuing. There are 17 million
:05:29. > :05:36.families currently being ripped off on expensive deals, Ofgem's
:05:37. > :05:41.proposals will deal with that most 3 million of them which leaves 14
:05:42. > :05:46.million still being preyed on by the big six energy firms. What my right
:05:47. > :05:50.honourable friend agree Ofgem's proposals will be a betrayal of
:05:51. > :05:54.those households, and will the distance himself from this big six
:05:55. > :05:59.stitch up and pledge himself to help the millions of households who Ofgem
:06:00. > :06:05.seem set to ignore? My honourable friend has done great work with many
:06:06. > :06:07.members across the House in establishing there is an appetite
:06:08. > :06:12.and a need to tackle this problem that has been going on for too long
:06:13. > :06:19.that the CMA exposed. What Ofgem has said today in response to my letter
:06:20. > :06:24.to them is that they will work with consumer groups and come forward
:06:25. > :06:28.with a range of proposed responses. I will look at them closely, I know
:06:29. > :06:33.he will and I'm sure the select committee will, and I have said very
:06:34. > :06:36.clearly the test of the adequacy of these responses is that they address
:06:37. > :06:53.the clear detriment than has been established by the authorities. This
:06:54. > :07:01.UK Government... Energy was sadly lacking in the green paper published
:07:02. > :07:05.before the election. To just ask the secretary, can he confirm what plans
:07:06. > :07:11.he's got to protect the 14 million people that has not been picked up
:07:12. > :07:14.in the current measured or the 1.4 billion his correctly identified the
:07:15. > :07:18.CMA has highlighted is going to the big companies, how much of that
:07:19. > :07:22.money is going to be returned to consumers with the measures coming
:07:23. > :07:29.forward? And he mentioned considering legislation, what's
:07:30. > :07:40.happening now in deciding the need to act and will he ask Ofgem to
:07:41. > :07:44.determine the true level. It is right that this Government has taken
:07:45. > :07:54.a decision that previous government docked the decades to renew our
:07:55. > :07:57.nuclear power stations, and he will know in Scotland, his own party in
:07:58. > :08:02.Government in Scotland actually agreed to extend the life of nuclear
:08:03. > :08:06.power stations in Scotland. He will also know the impact that our
:08:07. > :08:10.success on renewable energy, specifically offshore wind, hard in
:08:11. > :08:15.Scotland and I've had some very fruitful discussions with colleagues
:08:16. > :08:21.across Scotland, especially in the remote islands about the future
:08:22. > :08:25.possibilities there. In terms of the Ofgem responds to my letter, I have
:08:26. > :08:30.set it out clearly. They said they will work with and consult consumer
:08:31. > :08:34.groups and come with a range of options. That ?1.4 billion detriment
:08:35. > :08:40.has to be eradicated, that will be the test of whether the proposals
:08:41. > :08:42.they come up with are acceptable and I'm sure that the House will want to
:08:43. > :08:55.scrutinise them as much as I. John Redwood. My right honourable
:08:56. > :09:03.friend has inherited a system... Is there anything he can do to bring
:09:04. > :09:07.cheaper energy into the next to bring cheaper bills in the future.
:09:08. > :09:13.We need to make sure that in meeting very important climate change
:09:14. > :09:18.commitments we do so at a cost that is competitive both for consumers
:09:19. > :09:23.and businesses, and that we obtain the industrial benefits that come
:09:24. > :09:28.with having a supply chain in this country. That's exactly why in the
:09:29. > :09:33.industrial strategy Green paper we have a chapter devoted to the future
:09:34. > :09:41.plans to make the most of this clean energy transition in all those
:09:42. > :09:46.respects. The recent report saying wind and solar is going to be the
:09:47. > :09:52.future in terms of low cost energy, but there was a Duke Ellington song
:09:53. > :09:56.called How Long Has This Been Going On? This has been going on too long,
:09:57. > :10:01.exploitation of people who can't afford it paying above the price.
:10:02. > :10:05.Isn't it about time we move from botched privatisation through
:10:06. > :10:08.inadequate regulation to an answer that puts money back in people's
:10:09. > :10:17.pockets rather than takes it out. To the first part of the question, I
:10:18. > :10:21.know of the huge progress made in the employment of renewables and the
:10:22. > :10:25.cost reduction and it's creating jobs across the UK, especially in
:10:26. > :10:32.coastal towns. I had the pleasure of opening up the Siemens wind blade
:10:33. > :10:38.factory in Hull, creating 1000 good jobs. He's right this detriment has
:10:39. > :10:41.been going on too long. That's why the competition markets authority
:10:42. > :10:44.were asked by this government to investigate root and branch the
:10:45. > :10:48.industry and they have identified ?1.4 billion of detriment and I have
:10:49. > :10:56.been clear that detriment has to become returns to the pockets of
:10:57. > :11:02.consumers. Susan Mayne. In my constituency the latest data shows
:11:03. > :11:08.that there are some 2687 households estimated to be in fuel poverty,
:11:09. > :11:13.6.6% of households. What more can be done to identify vulnerable groups
:11:14. > :11:16.and ensure they have the best advice and information about switching
:11:17. > :11:19.tariffs. Just suggesting to go online is not the way forward. It
:11:20. > :11:24.would be helpful to have a better dialogue between the consumer and
:11:25. > :11:27.energy provider. It's one of the features of the energy market that
:11:28. > :11:32.the poorer you are the higher proportion of the income you spend
:11:33. > :11:34.on energy, which is why it is imperative in my view that
:11:35. > :11:40.vulnerable consumers like that should not have to be required to go
:11:41. > :11:45.onto the Internet every few months to check that the tariff they are on
:11:46. > :11:52.hasn't been defaulted to a much higher one. That's the reason for my
:11:53. > :11:57.letter to Ofgem and why I'm looking for their response to be very
:11:58. > :12:01.vigorous. She's absolutely right that part of the wider set of
:12:02. > :12:07.policies is to make it for consumers to know the price of their
:12:08. > :12:13.consumption of energy, which is why smart meters are being introduced to
:12:14. > :12:19.allow greater area for that. Has the Secretary of State seen the analysis
:12:20. > :12:24.and evidence of former regulators who say consumer detriment pointed
:12:25. > :12:28.to in this market was seriously flawed and based on seriously flawed
:12:29. > :12:34.methodology? If he hasn't, will he look at it and report back to the
:12:35. > :12:39.house. I have seen that. I would say it was a two-year enquiry conducted
:12:40. > :12:45.by the competition markets authority. They identified ?1.4
:12:46. > :12:52.billion, a huge amount of money. I think our constituents know when
:12:53. > :12:58.they see the difference can be up to ?100 per year for a dual fuel bill,
:12:59. > :13:05.they pay by being on the dual fuel tariff. That's a significant amount.
:13:06. > :13:09.The CMA said suppliers have unilateral market power over their
:13:10. > :13:14.customer base and can exploit their position by pricing above the level
:13:15. > :13:24.that can be justified. That can't go on. Steven care. Does my right
:13:25. > :13:28.honourable friend agree with me that it will take more easier switching
:13:29. > :13:35.to encourage a fairer energy market in this country? I think there is a
:13:36. > :13:40.response required from the regulator. It is a regulated
:13:41. > :13:44.industry. The developments of modern markets mean it is possible for
:13:45. > :13:50.suppliers, especially dominant suppliers to identify those
:13:51. > :13:56.customers who are least likely to switch, and they are often among the
:13:57. > :13:59.most vulnerable and use that information to sting is unacceptable
:14:00. > :14:04.and we must use regulation to catch up with it. I think it's time we
:14:05. > :14:10.heard again from the good doctor. David Drew. Mr Speaker, it's my
:14:11. > :14:14.lucky day today. It won't continue I'm sure. I refer to my register in
:14:15. > :14:21.the register of members interests that the Secretary of State must
:14:22. > :14:25.realise, as much as we welcome the attempt to reverse fuel poverty,
:14:26. > :14:29.there is an adverse effect in the fuel wars at the margins that hasn't
:14:30. > :14:33.come forward because of this fairly blunt pricing structure. Will he
:14:34. > :14:39.look into that and make sure we are still seeing a drive forward in
:14:40. > :14:42.terms of renewables. We have seen a big increase in renewables as the
:14:43. > :14:52.price comes down, as his honourable colleague has said. The effects of
:14:53. > :14:55.overcharging is not returned to consumers, it's not about the
:14:56. > :14:59.increased deployment of renewables. It comes in the analysis of the CMA
:15:00. > :15:04.into profits that are higher than they would be in a competitive
:15:05. > :15:07.market, and also a relative inefficiency on the part of
:15:08. > :15:19.suppliers. I don't think the consumer should pay for either of
:15:20. > :15:23.those. Mr Robert Cowell. Many consumers, particularly those on low
:15:24. > :15:29.incomes do not pay energy bills by direct debit. When they do so they
:15:30. > :15:34.get lots of energy charges even when they pay on time. Could this be
:15:35. > :15:40.looked into, people who don't pay energy bills by direct debit should
:15:41. > :15:46.still get a fair energy bill. An excellent point. The poorest 10% of
:15:47. > :15:48.households spend 10% of the household expenditure on energy
:15:49. > :15:55.compared to the richest 10% spending 3%. We need to look particularly at
:15:56. > :16:01.the conditions of those more vulnerable consumers to make sure
:16:02. > :16:08.they are not disadvantaged. He mentioned is one of the ways that is
:16:09. > :16:12.the case. Matt Weston. Are we not tinkering at the edges here and
:16:13. > :16:16.doing a bit of window dressing? Perhaps the Secretary of State would
:16:17. > :16:23.agree with me. We all agree that the energy market appears to be
:16:24. > :16:26.dysfunctional. Perhaps we saw it best earlier this year when there
:16:27. > :16:29.was an increase in tariffs across the board that bore no relation to
:16:30. > :16:34.wholesale prices and everything to do with the exchange rate,
:16:35. > :16:38.particularly with the Euro where most of our domestic companies are
:16:39. > :16:43.based in France and Germany. We see the big six effectively operate as a
:16:44. > :16:47.cartel, not in the interests of the consumer. I'm not sure I would give
:16:48. > :16:53.them the excuse of exchange-rate movements here. The competition
:16:54. > :16:58.markets authority has said suppliers have unilateral market power over
:16:59. > :17:03.this part of their customer base. It's a regulated market. Ofgem have
:17:04. > :17:09.the powers to introduce and extend the price cap. My view is they
:17:10. > :17:13.should use it and use it now. I would like to take the Secretary of
:17:14. > :17:18.State back to the point of switching and ask him if he thinks more needs
:17:19. > :17:20.to be done to make it easier to switch, particularly for those
:17:21. > :17:26.members of our constituencies who are more vulnerable than others. I
:17:27. > :17:30.agree with my honourable friend. There shouldn't be barriers in the
:17:31. > :17:37.way to that. But I don't think it should be necessary to spend every
:17:38. > :17:40.evening on the Internet to be checking whether your bill has gone
:17:41. > :17:49.up by an outrageous margin. If you are loyal to a brand, maybe a
:17:50. > :17:52.trusted brand that people think they would be reasonably treated, I think
:17:53. > :17:57.that's not an unreasonable expectation to have, and I think the
:17:58. > :18:07.regulators should enforce it. Jonathan Edwards. In Wales we
:18:08. > :18:11.produce far more electricity and pay more than the rest of the British
:18:12. > :18:15.state. Over a third of our households are in fuel poverty.
:18:16. > :18:20.Doesn't that suggest Westminster control over fuel policy isn't
:18:21. > :18:28.working? That's one of the reasons this investigation was commissioned
:18:29. > :18:32.and why I asked Ofgem to enact and it will be particularly important to
:18:33. > :18:37.constituents in Wales. Rachel McClane. Will my right honourable
:18:38. > :18:41.friend join me in welcoming Ofgem's proposals to bring in measures to
:18:42. > :18:46.help micro-businesses? I do welcome that. It's right we have talked
:18:47. > :18:52.about household consumers and very small businesses as well. Their
:18:53. > :19:01.energy bill is an important component of the costs. I asked for
:19:02. > :19:09.that is to apply to micro-businesses as well. The usual vested interests
:19:10. > :19:14.of the big six were on the airwaves this morning advising consumers to
:19:15. > :19:19.just switch their energy supplier, but actually, if consumers really
:19:20. > :19:23.want to see a change to this rip off of energy prices, don't they
:19:24. > :19:29.actually have to switch governments? I would say it is this government
:19:30. > :19:33.that has referred the whole industry to the competitions and markets
:19:34. > :19:37.authority. When the Right Honourable member for Doncaster North was
:19:38. > :19:42.energy Secretary, I urged this on him at the time and he rejected it
:19:43. > :19:47.flat. It is this government that has exposed the level of detriment and
:19:48. > :19:51.it is this government that is acting to put a cap in place to prevent
:19:52. > :19:57.this abuse. It didn't happen under Labour. As welcome as a price cap
:19:58. > :20:01.will undoubtedly be, does the Secretary of State agree with me
:20:02. > :20:03.that the real key to bringing down prices for consumers is the
:20:04. > :20:07.liberalisation of the energy market through the digitisation of the
:20:08. > :20:12.energy system, storage in front of and behind the meter and demand side
:20:13. > :20:16.response as well. My honourable friend, who is well-informed about
:20:17. > :20:19.such issues, is right. The opportunity smart meters bring in,
:20:20. > :20:23.people can have more knowledge and control of their energy use and use
:20:24. > :20:28.that to get the best deals available. That's why the roll-out
:20:29. > :20:33.of smart meters is an important part of reforms of the energy market.
:20:34. > :20:38.Doesn't the outcome of the CMA enquiry tell him, as a very
:20:39. > :20:44.reasonable man, that this is the end of the road for this system. Indeed
:20:45. > :20:49.privatisation didn't work, regulation hasn't worked, we have
:20:50. > :20:52.had to had a CMA enquiry. What's needed is a fundamental reappraisal
:20:53. > :20:59.and change to this whole energy edifice. I'm surprised to hear from
:21:00. > :21:03.the honourable gentleman that the implicit support of the programme of
:21:04. > :21:07.nationalisation that his party stood on this sector, I think billions of
:21:08. > :21:15.pounds that would cost, would not be the most important use of our funds.
:21:16. > :21:20.It has been a regulated industry since the time of privatisation many
:21:21. > :21:25.years ago. That regulation needs to function better than it has. Sir
:21:26. > :21:30.Oliver Letwin. I have been listening very carefully to the answers, and
:21:31. > :21:35.am I right to understand he would not be satisfied with a final
:21:36. > :21:42.solution from Ofgem that continued to cross subsidise some customers
:21:43. > :21:49.out of loyalty premium, paid by those, even if not vulnerable, who
:21:50. > :21:53.didn't switch. This is a wake-up call for the industry. Consumers who
:21:54. > :22:05.are known not to switch can be milked to pay for subsidy for other
:22:06. > :22:07.consumers in an un-fairway. The CMA identified unilateral market power
:22:08. > :22:13.enabling them to exploit that position and I think it has to come
:22:14. > :22:19.to an end. Whilst welcoming proposals to make it easier to
:22:20. > :22:23.switch away from poor deals, does my right honourable friend agree Ofgem
:22:24. > :22:27.needs to go much further than it suggested in their letter to him
:22:28. > :22:37.this morning to protect consumers from exploitation? A very clear
:22:38. > :22:42.expectation that I want to see the detriment of the CMA identified be
:22:43. > :22:44.tackled once and for all. They want to speak to consumer groups and I
:22:45. > :22:50.hope those groups will share my honourable friend's analysis.
:22:51. > :22:55.Charles Watling. Will my honourable friend join me in welcoming the
:22:56. > :23:00.acknowledgement that Ofgem had of being able to put a cap in place.
:23:01. > :23:08.Shouldn't we urge Ofgem to use that power fully? My honourable friend is
:23:09. > :23:12.right. The proposal to consult with consumer groups, to go beyond what
:23:13. > :23:19.the CMA's remedies, at least the majority report of the CMA
:23:20. > :23:23.recommended, is welcomed. It's a step in the right direction, but I
:23:24. > :23:30.would like to see them put out in detail and implemented before I am
:23:31. > :23:34.satisfied. As somebody who represents an industrial town, as
:23:35. > :23:39.part of the wider debate on these issues, has my honourable friend had
:23:40. > :23:43.the opportunity to assess what impact nationalising the energy
:23:44. > :23:52.companies would have on energy bills and households? The input of finding
:23:53. > :23:55.the Williams pounds necessary to take into public ownership these
:23:56. > :24:00.industries, I think it would be not only a disaster for public finances,
:24:01. > :24:01.but destroy investor confidence in a whole range of industries that we
:24:02. > :24:17.need to have investment in. Julian Smith. I thought I could be
:24:18. > :24:22.behind someone else. You are not a senior government whip but at least
:24:23. > :24:27.you are a night. LAUGHTER I was a BBC news consumers reporter
:24:28. > :24:35.for five years and I saw the havoc that can be caused by this kind of
:24:36. > :24:41.metering. It can make a payday loan look reasonable, and it needs to
:24:42. > :24:50.heel. We should welcome the proposal from Ofgem to extend the Paris on --
:24:51. > :24:57.tariff on prepayment meters. My honourable friend is right. It has
:24:58. > :25:00.been the practice of this government to intervene where there are abuses,
:25:01. > :25:04.especially to vulnerable people in the way he describes and that has
:25:05. > :25:09.happened to prepaid meters but it needs to go further. We are grateful
:25:10. > :25:10.to the