Live Energy Price Urgent Question House of Commons


Live Energy Price Urgent Question

Similar Content

Browse content similar to Live Energy Price Urgent Question. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

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.:00:00.

duty of care and to make sure fire safety is of paramount importance

:00:00.:00:10.

for them. They must move on, demand has exceeded supply as is often the

:00:11.:00:14.

case in this place. Urgent question, Doctor Alan Whitehead. Thank you, Mr

:00:15.:00:24.

Speaker. To ask the Secretary of State if you will make a statement

:00:25.:00:28.

on the Government's intention for an energy price cap. The Competition

:00:29.:00:40.

and Markets Authority, following a two year inquiry, found energy

:00:41.:00:43.

customers on standard variable tariffs were paying on average ?1.4

:00:44.:00:47.

billion a year more than would be the case in a competitive market,

:00:48.:00:53.

that is completely unacceptable. And so my party's manifesto committed to

:00:54.:00:57.

introduce safeguard tariff to extend the price protection currently in

:00:58.:01:03.

place for some vulnerable customers, those on prepayment metres, to more

:01:04.:01:08.

customers on the poorest value tariffs. Ofgem can oppose such a

:01:09.:01:15.

price cap without delay. I wrote on the 21st of June to the chief

:01:16.:01:19.

Executive of Ofgem asking them to use the regulators powers to do

:01:20.:01:23.

that. Today the regulator has replied and announced it will work

:01:24.:01:27.

with consumer groups to take measures including extending the

:01:28.:01:30.

current safeguard tariff for those on prepayment metres to a wider

:01:31.:01:36.

group of consumers and to move urgently to implement these changes.

:01:37.:01:40.

I welcome this initial proposal. It is a step in the right direction,

:01:41.:01:45.

but I will wait to see the actual proposals and to see them turned

:01:46.:01:50.

into action to cut bills. The test of whether the regulators changes go

:01:51.:01:53.

far enough is whether they move sufficiently to eradicate the

:01:54.:02:00.

detriment of consumers that the CMA has identified. I remain prepared to

:02:01.:02:04.

legislate if they do not and I hope such legislation would command wide

:02:05.:02:13.

support across the House. Does the Secretary of State recall during the

:02:14.:02:15.

election has party placed the promise of an overall price cap on

:02:16.:02:20.

energy prices at the centre of their manifesto and does he recall the

:02:21.:02:24.

Prime Minister stating, I am making this promise, if I am re-elected I

:02:25.:02:29.

will take action to end this injustice by placing a cap on unfair

:02:30.:02:33.

energy prices which will protect around 17 million families on

:02:34.:02:36.

standard variable tariffs from being exploited with sudden and

:02:37.:02:40.

unjustified increases in bills. Does he accept the response to his letter

:02:41.:02:45.

on the 21st of June falls short of implementing that promise and

:02:46.:02:49.

although there are welcome suggestions on capping charges for

:02:50.:02:53.

prepayment metres, those measures would only affect 2.5 million

:02:54.:02:59.

customers leaving over 14 million customers completely unprotected

:03:00.:03:03.

from price rises. Can the Minister confirm he didn't in fact ask Ofgem

:03:04.:03:07.

to consider introducing a general price cap in his letter to them, and

:03:08.:03:19.

he -- can he tell the House why not. Does the Secretary of State intends

:03:20.:03:23.

to pass legislation that requires Ofgem to introduce the price cap or

:03:24.:03:27.

is he content to let his firm election promise of a cap for by the

:03:28.:03:31.

wayside? And if he does, what does he have to say to the 17 million

:03:32.:03:36.

people on standard variable tariffs who thought relief from rip-off

:03:37.:03:39.

price rises was on its way and he will now feel completely betrayed by

:03:40.:03:44.

this policy U-turn. I am grateful to the honourable gentleman for his

:03:45.:03:47.

questions and I hope you will see in my response to his initial question

:03:48.:03:51.

I have answered many of the points he made. He will share the view that

:03:52.:03:56.

I do, because I think it is his view as well, that we should act as soon

:03:57.:04:00.

as possible to provide this relief to consumers. To do that, that means

:04:01.:04:08.

Ofgem have to use those powers. They have the powers, they can use them

:04:09.:04:11.

immediately and I have encouraged them to do so. In terms of the

:04:12.:04:17.

letter that I sent that he mentions, he will know I'm sure, having

:04:18.:04:23.

studied the prospective use of these powers, if he was hoping to come

:04:24.:04:26.

into government, that the legislation requires me to ask for

:04:27.:04:33.

advice from Ofgem. That is exactly the terms in which I did so. They

:04:34.:04:38.

have responded to that and what they have said is that they will work

:04:39.:04:44.

with consumer groups to identify how far this protection should go. But I

:04:45.:04:51.

have been very clear that I want to see this detriment, ?1.4 billion a

:04:52.:04:59.

year eradicated. It is a test of the responsiveness of Ofgem that they

:05:00.:05:03.

should use their powers to this end, and I think our constituents for

:05:04.:05:06.

members on whichever side of the House would look to the regulator to

:05:07.:05:14.

make use of the powers they have to protect this unacceptable... To

:05:15.:05:21.

prevent this unacceptable situation continuing. There are 17 million

:05:22.:05:28.

families currently being ripped off on expensive deals, Ofgem's

:05:29.:05:36.

proposals will deal with that most 3 million of them which leaves 14

:05:37.:05:41.

million still being preyed on by the big six energy firms. What my right

:05:42.:05:46.

honourable friend agree Ofgem's proposals will be a betrayal of

:05:47.:05:50.

those households, and will the distance himself from this big six

:05:51.:05:54.

stitch up and pledge himself to help the millions of households who Ofgem

:05:55.:05:59.

seem set to ignore? My honourable friend has done great work with many

:06:00.:06:05.

members across the House in establishing there is an appetite

:06:06.:06:07.

and a need to tackle this problem that has been going on for too long

:06:08.:06:12.

that the CMA exposed. What Ofgem has said today in response to my letter

:06:13.:06:19.

to them is that they will work with consumer groups and come forward

:06:20.:06:24.

with a range of proposed responses. I will look at them closely, I know

:06:25.:06:28.

he will and I'm sure the select committee will, and I have said very

:06:29.:06:33.

clearly the test of the adequacy of these responses is that they address

:06:34.:06:36.

the clear detriment than has been established by the authorities. This

:06:37.:06:53.

UK Government... Energy was sadly lacking in the green paper published

:06:54.:07:01.

before the election. To just ask the secretary, can he confirm what plans

:07:02.:07:05.

he's got to protect the 14 million people that has not been picked up

:07:06.:07:11.

in the current measured or the 1.4 billion his correctly identified the

:07:12.:07:14.

CMA has highlighted is going to the big companies, how much of that

:07:15.:07:18.

money is going to be returned to consumers with the measures coming

:07:19.:07:22.

forward? And he mentioned considering legislation, what's

:07:23.:07:29.

happening now in deciding the need to act and will he ask Ofgem to

:07:30.:07:40.

determine the true level. It is right that this Government has taken

:07:41.:07:44.

a decision that previous government docked the decades to renew our

:07:45.:07:54.

nuclear power stations, and he will know in Scotland, his own party in

:07:55.:07:57.

Government in Scotland actually agreed to extend the life of nuclear

:07:58.:08:02.

power stations in Scotland. He will also know the impact that our

:08:03.:08:06.

success on renewable energy, specifically offshore wind, hard in

:08:07.:08:10.

Scotland and I've had some very fruitful discussions with colleagues

:08:11.:08:15.

across Scotland, especially in the remote islands about the future

:08:16.:08:21.

possibilities there. In terms of the Ofgem responds to my letter, I have

:08:22.:08:25.

set it out clearly. They said they will work with and consult consumer

:08:26.:08:30.

groups and come with a range of options. That ?1.4 billion detriment

:08:31.:08:34.

has to be eradicated, that will be the test of whether the proposals

:08:35.:08:40.

they come up with are acceptable and I'm sure that the House will want to

:08:41.:08:42.

scrutinise them as much as I. John Redwood. My right honourable

:08:43.:08:55.

friend has inherited a system... Is there anything he can do to bring

:08:56.:09:03.

cheaper energy into the next to bring cheaper bills in the future.

:09:04.:09:07.

We need to make sure that in meeting very important climate change

:09:08.:09:13.

commitments we do so at a cost that is competitive both for consumers

:09:14.:09:18.

and businesses, and that we obtain the industrial benefits that come

:09:19.:09:23.

with having a supply chain in this country. That's exactly why in the

:09:24.:09:28.

industrial strategy Green paper we have a chapter devoted to the future

:09:29.:09:33.

plans to make the most of this clean energy transition in all those

:09:34.:09:41.

respects. The recent report saying wind and solar is going to be the

:09:42.:09:46.

future in terms of low cost energy, but there was a Duke Ellington song

:09:47.:09:52.

called How Long Has This Been Going On? This has been going on too long,

:09:53.:09:56.

exploitation of people who can't afford it paying above the price.

:09:57.:10:01.

Isn't it about time we move from botched privatisation through

:10:02.:10:05.

inadequate regulation to an answer that puts money back in people's

:10:06.:10:08.

pockets rather than takes it out. To the first part of the question, I

:10:09.:10:17.

know of the huge progress made in the employment of renewables and the

:10:18.:10:21.

cost reduction and it's creating jobs across the UK, especially in

:10:22.:10:25.

coastal towns. I had the pleasure of opening up the Siemens wind blade

:10:26.:10:32.

factory in Hull, creating 1000 good jobs. He's right this detriment has

:10:33.:10:38.

been going on too long. That's why the competition markets authority

:10:39.:10:41.

were asked by this government to investigate root and branch the

:10:42.:10:44.

industry and they have identified ?1.4 billion of detriment and I have

:10:45.:10:48.

been clear that detriment has to become returns to the pockets of

:10:49.:10:56.

consumers. Susan Mayne. In my constituency the latest data shows

:10:57.:11:02.

that there are some 2687 households estimated to be in fuel poverty,

:11:03.:11:08.

6.6% of households. What more can be done to identify vulnerable groups

:11:09.:11:13.

and ensure they have the best advice and information about switching

:11:14.:11:16.

tariffs. Just suggesting to go online is not the way forward. It

:11:17.:11:19.

would be helpful to have a better dialogue between the consumer and

:11:20.:11:24.

energy provider. It's one of the features of the energy market that

:11:25.:11:27.

the poorer you are the higher proportion of the income you spend

:11:28.:11:32.

on energy, which is why it is imperative in my view that

:11:33.:11:34.

vulnerable consumers like that should not have to be required to go

:11:35.:11:40.

onto the Internet every few months to check that the tariff they are on

:11:41.:11:45.

hasn't been defaulted to a much higher one. That's the reason for my

:11:46.:11:52.

letter to Ofgem and why I'm looking for their response to be very

:11:53.:11:57.

vigorous. She's absolutely right that part of the wider set of

:11:58.:12:01.

policies is to make it for consumers to know the price of their

:12:02.:12:07.

consumption of energy, which is why smart meters are being introduced to

:12:08.:12:13.

allow greater area for that. Has the Secretary of State seen the analysis

:12:14.:12:19.

and evidence of former regulators who say consumer detriment pointed

:12:20.:12:24.

to in this market was seriously flawed and based on seriously flawed

:12:25.:12:28.

methodology? If he hasn't, will he look at it and report back to the

:12:29.:12:34.

house. I have seen that. I would say it was a two-year enquiry conducted

:12:35.:12:39.

by the competition markets authority. They identified ?1.4

:12:40.:12:45.

billion, a huge amount of money. I think our constituents know when

:12:46.:12:52.

they see the difference can be up to ?100 per year for a dual fuel bill,

:12:53.:12:58.

they pay by being on the dual fuel tariff. That's a significant amount.

:12:59.:13:05.

The CMA said suppliers have unilateral market power over their

:13:06.:13:09.

customer base and can exploit their position by pricing above the level

:13:10.:13:14.

that can be justified. That can't go on. Steven care. Does my right

:13:15.:13:24.

honourable friend agree with me that it will take more easier switching

:13:25.:13:28.

to encourage a fairer energy market in this country? I think there is a

:13:29.:13:35.

response required from the regulator. It is a regulated

:13:36.:13:40.

industry. The developments of modern markets mean it is possible for

:13:41.:13:44.

suppliers, especially dominant suppliers to identify those

:13:45.:13:50.

customers who are least likely to switch, and they are often among the

:13:51.:13:56.

most vulnerable and use that information to sting is unacceptable

:13:57.:13:59.

and we must use regulation to catch up with it. I think it's time we

:14:00.:14:04.

heard again from the good doctor. David Drew. Mr Speaker, it's my

:14:05.:14:10.

lucky day today. It won't continue I'm sure. I refer to my register in

:14:11.:14:14.

the register of members interests that the Secretary of State must

:14:15.:14:21.

realise, as much as we welcome the attempt to reverse fuel poverty,

:14:22.:14:25.

there is an adverse effect in the fuel wars at the margins that hasn't

:14:26.:14:29.

come forward because of this fairly blunt pricing structure. Will he

:14:30.:14:33.

look into that and make sure we are still seeing a drive forward in

:14:34.:14:39.

terms of renewables. We have seen a big increase in renewables as the

:14:40.:14:42.

price comes down, as his honourable colleague has said. The effects of

:14:43.:14:52.

overcharging is not returned to consumers, it's not about the

:14:53.:14:55.

increased deployment of renewables. It comes in the analysis of the CMA

:14:56.:14:59.

into profits that are higher than they would be in a competitive

:15:00.:15:04.

market, and also a relative inefficiency on the part of

:15:05.:15:07.

suppliers. I don't think the consumer should pay for either of

:15:08.:15:19.

those. Mr Robert Cowell. Many consumers, particularly those on low

:15:20.:15:23.

incomes do not pay energy bills by direct debit. When they do so they

:15:24.:15:29.

get lots of energy charges even when they pay on time. Could this be

:15:30.:15:34.

looked into, people who don't pay energy bills by direct debit should

:15:35.:15:40.

still get a fair energy bill. An excellent point. The poorest 10% of

:15:41.:15:46.

households spend 10% of the household expenditure on energy

:15:47.:15:48.

compared to the richest 10% spending 3%. We need to look particularly at

:15:49.:15:55.

the conditions of those more vulnerable consumers to make sure

:15:56.:16:01.

they are not disadvantaged. He mentioned is one of the ways that is

:16:02.:16:08.

the case. Matt Weston. Are we not tinkering at the edges here and

:16:09.:16:12.

doing a bit of window dressing? Perhaps the Secretary of State would

:16:13.:16:16.

agree with me. We all agree that the energy market appears to be

:16:17.:16:23.

dysfunctional. Perhaps we saw it best earlier this year when there

:16:24.:16:26.

was an increase in tariffs across the board that bore no relation to

:16:27.:16:29.

wholesale prices and everything to do with the exchange rate,

:16:30.:16:34.

particularly with the Euro where most of our domestic companies are

:16:35.:16:38.

based in France and Germany. We see the big six effectively operate as a

:16:39.:16:43.

cartel, not in the interests of the consumer. I'm not sure I would give

:16:44.:16:47.

them the excuse of exchange-rate movements here. The competition

:16:48.:16:53.

markets authority has said suppliers have unilateral market power over

:16:54.:16:58.

this part of their customer base. It's a regulated market. Ofgem have

:16:59.:17:03.

the powers to introduce and extend the price cap. My view is they

:17:04.:17:09.

should use it and use it now. I would like to take the Secretary of

:17:10.:17:13.

State back to the point of switching and ask him if he thinks more needs

:17:14.:17:18.

to be done to make it easier to switch, particularly for those

:17:19.:17:20.

members of our constituencies who are more vulnerable than others. I

:17:21.:17:26.

agree with my honourable friend. There shouldn't be barriers in the

:17:27.:17:30.

way to that. But I don't think it should be necessary to spend every

:17:31.:17:37.

evening on the Internet to be checking whether your bill has gone

:17:38.:17:40.

up by an outrageous margin. If you are loyal to a brand, maybe a

:17:41.:17:49.

trusted brand that people think they would be reasonably treated, I think

:17:50.:17:52.

that's not an unreasonable expectation to have, and I think the

:17:53.:17:57.

regulators should enforce it. Jonathan Edwards. In Wales we

:17:58.:18:07.

produce far more electricity and pay more than the rest of the British

:18:08.:18:11.

state. Over a third of our households are in fuel poverty.

:18:12.:18:15.

Doesn't that suggest Westminster control over fuel policy isn't

:18:16.:18:20.

working? That's one of the reasons this investigation was commissioned

:18:21.:18:28.

and why I asked Ofgem to enact and it will be particularly important to

:18:29.:18:32.

constituents in Wales. Rachel McClane. Will my right honourable

:18:33.:18:37.

friend join me in welcoming Ofgem's proposals to bring in measures to

:18:38.:18:41.

help micro-businesses? I do welcome that. It's right we have talked

:18:42.:18:46.

about household consumers and very small businesses as well. Their

:18:47.:18:52.

energy bill is an important component of the costs. I asked for

:18:53.:19:01.

that is to apply to micro-businesses as well. The usual vested interests

:19:02.:19:09.

of the big six were on the airwaves this morning advising consumers to

:19:10.:19:14.

just switch their energy supplier, but actually, if consumers really

:19:15.:19:19.

want to see a change to this rip off of energy prices, don't they

:19:20.:19:23.

actually have to switch governments? I would say it is this government

:19:24.:19:29.

that has referred the whole industry to the competitions and markets

:19:30.:19:33.

authority. When the Right Honourable member for Doncaster North was

:19:34.:19:37.

energy Secretary, I urged this on him at the time and he rejected it

:19:38.:19:42.

flat. It is this government that has exposed the level of detriment and

:19:43.:19:47.

it is this government that is acting to put a cap in place to prevent

:19:48.:19:51.

this abuse. It didn't happen under Labour. As welcome as a price cap

:19:52.:19:57.

will undoubtedly be, does the Secretary of State agree with me

:19:58.:20:01.

that the real key to bringing down prices for consumers is the

:20:02.:20:03.

liberalisation of the energy market through the digitisation of the

:20:04.:20:07.

energy system, storage in front of and behind the meter and demand side

:20:08.:20:12.

response as well. My honourable friend, who is well-informed about

:20:13.:20:16.

such issues, is right. The opportunity smart meters bring in,

:20:17.:20:19.

people can have more knowledge and control of their energy use and use

:20:20.:20:23.

that to get the best deals available. That's why the roll-out

:20:24.:20:28.

of smart meters is an important part of reforms of the energy market.

:20:29.:20:33.

Doesn't the outcome of the CMA enquiry tell him, as a very

:20:34.:20:38.

reasonable man, that this is the end of the road for this system. Indeed

:20:39.:20:44.

privatisation didn't work, regulation hasn't worked, we have

:20:45.:20:49.

had to had a CMA enquiry. What's needed is a fundamental reappraisal

:20:50.:20:52.

and change to this whole energy edifice. I'm surprised to hear from

:20:53.:20:59.

the honourable gentleman that the implicit support of the programme of

:21:00.:21:03.

nationalisation that his party stood on this sector, I think billions of

:21:04.:21:07.

pounds that would cost, would not be the most important use of our funds.

:21:08.:21:15.

It has been a regulated industry since the time of privatisation many

:21:16.:21:20.

years ago. That regulation needs to function better than it has. Sir

:21:21.:21:25.

Oliver Letwin. I have been listening very carefully to the answers, and

:21:26.:21:30.

am I right to understand he would not be satisfied with a final

:21:31.:21:35.

solution from Ofgem that continued to cross subsidise some customers

:21:36.:21:42.

out of loyalty premium, paid by those, even if not vulnerable, who

:21:43.:21:49.

didn't switch. This is a wake-up call for the industry. Consumers who

:21:50.:21:53.

are known not to switch can be milked to pay for subsidy for other

:21:54.:22:05.

consumers in an un-fairway. The CMA identified unilateral market power

:22:06.:22:07.

enabling them to exploit that position and I think it has to come

:22:08.:22:13.

to an end. Whilst welcoming proposals to make it easier to

:22:14.:22:19.

switch away from poor deals, does my right honourable friend agree Ofgem

:22:20.:22:23.

needs to go much further than it suggested in their letter to him

:22:24.:22:27.

this morning to protect consumers from exploitation? A very clear

:22:28.:22:37.

expectation that I want to see the detriment of the CMA identified be

:22:38.:22:42.

tackled once and for all. They want to speak to consumer groups and I

:22:43.:22:44.

hope those groups will share my honourable friend's analysis.

:22:45.:22:50.

Charles Watling. Will my honourable friend join me in welcoming the

:22:51.:22:55.

acknowledgement that Ofgem had of being able to put a cap in place.

:22:56.:23:00.

Shouldn't we urge Ofgem to use that power fully? My honourable friend is

:23:01.:23:08.

right. The proposal to consult with consumer groups, to go beyond what

:23:09.:23:12.

the CMA's remedies, at least the majority report of the CMA

:23:13.:23:19.

recommended, is welcomed. It's a step in the right direction, but I

:23:20.:23:23.

would like to see them put out in detail and implemented before I am

:23:24.:23:30.

satisfied. As somebody who represents an industrial town, as

:23:31.:23:34.

part of the wider debate on these issues, has my honourable friend had

:23:35.:23:39.

the opportunity to assess what impact nationalising the energy

:23:40.:23:43.

companies would have on energy bills and households? The input of finding

:23:44.:23:52.

the Williams pounds necessary to take into public ownership these

:23:53.:23:55.

industries, I think it would be not only a disaster for public finances,

:23:56.:24:00.

but destroy investor confidence in a whole range of industries that we

:24:01.:24:01.

need to have investment in. Julian Smith. I thought I could be

:24:02.:24:17.

behind someone else. You are not a senior government whip but at least

:24:18.:24:22.

you are a night. LAUGHTER I was a BBC news consumers reporter

:24:23.:24:27.

for five years and I saw the havoc that can be caused by this kind of

:24:28.:24:35.

metering. It can make a payday loan look reasonable, and it needs to

:24:36.:24:41.

heel. We should welcome the proposal from Ofgem to extend the Paris on --

:24:42.:24:50.

tariff on prepayment meters. My honourable friend is right. It has

:24:51.:24:57.

been the practice of this government to intervene where there are abuses,

:24:58.:25:00.

especially to vulnerable people in the way he describes and that has

:25:01.:25:04.

happened to prepaid meters but it needs to go further. We are grateful

:25:05.:25:09.

to the

:25:10.:25:10.

Download Subtitles

SRT

ASS