:00:13. > :00:26.The time is ten past eight. When Labour promising 20 that they would
:00:27. > :00:32.freeze the energy, the book thrown at them. Companies would be to
:00:33. > :00:36.schedule over them and they would not go up again. Now the
:00:37. > :00:41.Conservatives have a new plan, cap energy prices. They want to convince
:00:42. > :00:48.us that this plan unlike the plan of the then Labour leader Ed Miliband
:00:49. > :00:57.will save customers money. Can they be serious? Here is what David
:00:58. > :00:59.Cameron said to us in 2013. There is one thing that governments can't
:01:00. > :01:04.control and that is the international wholesale price of
:01:05. > :01:07.gas. I know we'd like to live in some sort of Marxist universe where
:01:08. > :01:13.you can control all these things, but it needs a basic lesson in
:01:14. > :01:20.economics. Greg Clark is here. Good morning. What do plan? The plan is
:01:21. > :01:26.for that part of the energy market, the CMA, has determined is not
:01:27. > :01:31.sufficiently competitive and that market power by the big energy
:01:32. > :01:36.companies is being abused to, in their words, charge a level of
:01:37. > :01:46.tariffs above a level that can be justified. We think there should be
:01:47. > :01:49.protection through a cap in the default tariffs that people go on to
:01:50. > :01:52.if they are not part of the competitive market. That would work
:01:53. > :01:57.for everyone in those standard tariffs and would cost the energy
:01:58. > :02:03.companies 17 million or so people on those tariffs, up to ?100 a year
:02:04. > :02:05.could be saved? What the competition market authority established was
:02:06. > :02:10.that the overcharging that they estimated with running at about ?1.4
:02:11. > :02:18.billion a year. That is varying over time. The additional costs for
:02:19. > :02:23.consumers has ranged from ?70 to about ?200. Where would that money
:02:24. > :02:27.come from? He will come from the energy companies having to reduce
:02:28. > :02:31.their prices. Whether you envisage them finding the money? What the CMA
:02:32. > :02:38.said was that there were two sources. One that they were
:02:39. > :02:48.overcharging and that this was... What would they not do? Handed out
:02:49. > :02:59.as dividends? Given to other customers? -- what would they do?
:03:00. > :03:01.Reduce the excess profits they were making by exploiting what they
:03:02. > :03:07.called the unilateral market pattern. The second thing that the
:03:08. > :03:16.CMA observed in their report is that the lack of competition, the market
:03:17. > :03:21.power that they have, has led to inefficiency in the energy companies
:03:22. > :03:25.and that one of the benefits of putting greater pressure on them
:03:26. > :03:29.would be to get them to perform more efficiently. In effect, customers
:03:30. > :03:44.including some bold rubble customers were paying for flabby, tissue. --
:03:45. > :03:50.vulnerable. That sounds like magic. It is comes from nowhere, the money?
:03:51. > :03:54.No. We have established that it drives down prices and makes
:03:55. > :03:58.companies are efficient. What they have said and I agree with is that
:03:59. > :04:02.these pressures should be applied to the big six when it comes to their
:04:03. > :04:08.standard variable tariffs. You can see where the money is going to come
:04:09. > :04:14.from, the big six average cheapest tariff up by 100 quid, slightly more
:04:15. > :04:17.than 100 quid. Already, people are paying for your policy and it is the
:04:18. > :04:21.people who have shopped around and have got themselves better deals,
:04:22. > :04:26.those deals are going to go and people are going to be paying more.
:04:27. > :04:31.The key finding from this two-year investigation was that in effect,
:04:32. > :04:34.there is two parts of the market. They competitive market for people
:04:35. > :04:41.who scour the Internet every night, find the best tariff, switch
:04:42. > :04:45.instantly. More and more people do that. No. The same level of
:04:46. > :04:50.switching. 16% to give. Isn't the answer they get more people to do
:04:51. > :04:56.it? Levy make the point to answer the question that you ask for. --
:04:57. > :05:00.let me. In the competitive market there is vigorous competition, so
:05:01. > :05:03.any attempt to raise prices there will have a competitive response on
:05:04. > :05:12.the part of the smaller players. There is market power. Perhaps
:05:13. > :05:16.because they don't have Internet access, they are not able to switch
:05:17. > :05:22.and it is right that they should be given some sort of safeguard against
:05:23. > :05:30.being... This is exactly what Labour said in 2013. The Labour policy in
:05:31. > :05:34.2013 would have been totally counter-productive. It was built as
:05:35. > :05:37.a freeze, in fact it was advertised... Eventually it became a
:05:38. > :05:41.cap. They were promising to do pretty much the same thing as you.
:05:42. > :05:44.Those people who couldn't move easily, they are going to be
:05:45. > :05:47.protected and that is what you are doing. We were told all sorts of
:05:48. > :05:50.things. Other with going to be less investment, indeed that is what the
:05:51. > :05:57.companies are saying today. That they would raise their prices and it
:05:58. > :05:59.seems that they are already raising their prices in order to make sure
:06:00. > :06:01.that they don't suffer when that happens. All those things that you
:06:02. > :06:05.promised would happen when Labour did it, are happening all going to
:06:06. > :06:13.happen now. No. Labour's was a very crude policy. It was too directly
:06:14. > :06:20.intervene by politicians setting the tariffs. We have responded to a
:06:21. > :06:24.two-year investigation to the CMA that establish that there is ?1.4
:06:25. > :06:28.billion a year on average of overcharging. When you are
:06:29. > :06:34.presenting... Just to make it plain. Hold on a second. You are penny it
:06:35. > :06:42.all on the CMA suggesting there is intervention. -- pinning. You didn't
:06:43. > :06:46.go -- they didn't go this far. You're going further. They
:06:47. > :06:51.identified this damage to consumers. They said that there shouldn't be a
:06:52. > :06:54.price cap for those on prepayment meters. They were in two minds as to
:06:55. > :07:02.whether that should be extended beyond that. You have gone to be
:07:03. > :07:07.unaware they were. The majority said that we should leave it there. The
:07:08. > :07:11.minority report said that that was not going to remove that that on to
:07:12. > :07:17.consumers quickly enough. So you shouldn't. We are taking the same
:07:18. > :07:23.approach that the CMA have given to prepared meters. Doing what the
:07:24. > :07:26.minority report said. Ayew guaranteeing that those on variable
:07:27. > :07:34.tariffs will see prices actually fall next year? -- are you. It is a
:07:35. > :07:44.matter for the energy regulator to clarify. Given the clarity of the
:07:45. > :07:47.view that there is ?1.4 billion overspend, the purpose of the
:07:48. > :07:53.exercise is to remove that abuse and to bring down bills for... If
:07:54. > :07:58.old-style prices were to go up, then prices would go down. That is one of
:07:59. > :08:01.the pieces of madness for the Labour Party policy. That is very
:08:02. > :08:13.important. If you are a consumer, off, we'll take a view. You will not
:08:14. > :08:22.be able to say if prices will rise Carol Horsfall with any degree of
:08:23. > :08:27.certainty. -- rise and fall. People who don't switch, a safeguard should
:08:28. > :08:32.be determined by inspecting the wholesale prices and international
:08:33. > :08:37.markets as you say. The cost pressures should be done by the
:08:38. > :08:41.energy regulator. But I think it's important. It should not be done by
:08:42. > :08:44.a politician, it should be done by the energy company. Is this
:08:45. > :08:49.something that you can simply do? Enforce it and give that power to
:08:50. > :08:59.the regulator do you consult on it? We would legislate. To avoid any
:09:00. > :09:02.legal holes, some companies have said they are very much against it.
:09:03. > :09:08.You think this is watertight legally? Yes, that is why we wanted
:09:09. > :09:12.to legislate and make it absolutely clear. It's a very important part of
:09:13. > :09:17.the programme of the Government. Right from the outset, Theresa May
:09:18. > :09:20.before she became leader of the party and Prime Minister said that
:09:21. > :09:27.she was determined to make sure that there was and economy the works
:09:28. > :09:32.everyone. When you know that some of the most vulnerable people in
:09:33. > :09:35.society are being charged ?1.4 billion more than the authorities
:09:36. > :09:41.have justified army have lacked on that. We will. Let's turn to
:09:42. > :09:44.immigration. Let's look at what the Federation of Master builders, the
:09:45. > :09:49.Institute of directors, London first, any number of business groups
:09:50. > :09:53.are saying to you, immigration targets are wrong. It is not going
:09:54. > :09:56.to wrong. It is not the right way to approach the sink. What do you say
:09:57. > :10:02.to them? I talk to business at all the time as part of my job. They,
:10:03. > :10:12.depending on the area that they are in, they rely on skills
:10:13. > :10:15.internationally. Take nuclear power, that is an international market.
:10:16. > :10:19.What has always been clearly understood is that there is no
:10:20. > :10:23.suggestion that no one would be able to come and work in this country
:10:24. > :10:24.that has skills that are acquired, or indeed go from this country
:10:25. > :10:37.elsewhere. In that case, who are you targeting?
:10:38. > :10:43.The key thing is we will have control that we did not in the past.
:10:44. > :10:46.We will look at how we design that policy to make sure that business
:10:47. > :10:50.and industries continue to have access. Given there are so many
:10:51. > :10:55.saying that they need access to people and we need them to be coming
:10:56. > :10:59.right across the piece, through NHS, farming, building, all sorts of
:11:00. > :11:06.skilled people, universities, where are you going to get your reduction,
:11:07. > :11:10.your sizeable reduction, from? It comes from being able to set our own
:11:11. > :11:15.policy. Once you set your policy, where will you look? To look at the
:11:16. > :11:20.circumstances of each sector and say what is the right policy for that?
:11:21. > :11:24.Sorry to interrupt, but who is coming at the moment who won't be
:11:25. > :11:27.coming to make sure you hit your target? I assume you want to hit
:11:28. > :11:32.that target within the next Parliament. You would want to do it
:11:33. > :11:36.within five years. I was going to say, part of what we need to do as a
:11:37. > :11:41.country and an economy is to make sure that we develop the skills in
:11:42. > :11:46.this country to be able to benefit from the opportunities that there
:11:47. > :11:51.are. I mentioned the nuclear industry, and we got a big expansion
:11:52. > :11:55.of nuclear power, because we haven't invested in new nuclear power over
:11:56. > :12:01.the years, we are having to import skills from other countries. Part of
:12:02. > :12:04.the Hinckley investment is to build a national College of nuclear
:12:05. > :12:08.engineering so that we are developing those skills in this
:12:09. > :12:12.country. In the longer term, that would know that help, but if you go
:12:13. > :12:21.into this election with a target of tens of thousands, and one assumes -
:12:22. > :12:27.you haven't confirmed it - you aim to meet that target within five
:12:28. > :12:35.years? Our manifesto hasn't been published. Let's assume that you
:12:36. > :12:39.tried to reach that target, what people will say, and what all of
:12:40. > :12:43.those businesspeople I quoted to you are worried about, is that this will
:12:44. > :12:46.impact on them. What you seem to be saying, on the sector by sector,
:12:47. > :12:52.don't worry, but somewhere, if you are going to do it, is its students,
:12:53. > :12:56.for instance? There is an understanding, and I and the
:12:57. > :13:02.Government recognise that competitive use of our industry
:13:03. > :13:07.means that in lots of different areas we depend and prosper from
:13:08. > :13:10.having an exchange. That is completely understood. At the same
:13:11. > :13:14.time, over the medium and long-term, we should as part of our industrial
:13:15. > :13:18.strategy, something we should have been doing anyway over decades,
:13:19. > :13:23.building the level of skills in this country, and that is the context in
:13:24. > :13:27.which we will exercise the powers. It is a target but not something
:13:28. > :13:33.you're going to hit? That is not the case at all. Big pillar of the
:13:34. > :13:37.industrial strategy is improving the level of technical skills in the
:13:38. > :13:41.workforce. Again, this is a very important generational change to
:13:42. > :13:48.revive technical education and training. What has happened to
:13:49. > :13:54.free-market conservatism? It is being pursued with vigour and it has
:13:55. > :13:57.always been a tenet... You are intervening in the gas and
:13:58. > :14:01.electricity market, presumably thinking about the insurance market,
:14:02. > :14:07.I don't know, bread, fruit - what has happened? Part of the
:14:08. > :14:10.Conservative tradition is where we have markets and we have opened up
:14:11. > :14:14.areas of industry that were previously state controlled the
:14:15. > :14:17.market. You will know over the years that we have been an innovator in
:14:18. > :14:22.putting in place competition regimes there. And now you are going in the
:14:23. > :14:27.other direction. We have been a world leader in this, making sure
:14:28. > :14:33.dominant players with market power over consumers cannot abuse that
:14:34. > :14:39.market power. It is entirely in the tradition of our competition
:14:40. > :14:43.policy... Is it? Did Margaret Thatcher do that? When Margaret
:14:44. > :14:46.Thatcher privatise the energy markets, she set up the special
:14:47. > :14:51.regulator. It was done before anyone else in the world, and you need to
:14:52. > :14:55.keep that regulation up to date. If you are presented by the statutory
:14:56. > :15:00.competition authority with a conclusion that ?1.4 billion is
:15:01. > :15:03.being taken out of the pockets of some vulnerable consumers, it is
:15:04. > :15:08.entirely in keeping with the conservative tradition and standing
:15:09. > :15:14.up for ordinary families in this country that Theresa May is
:15:15. > :15:16.determined to do that we should continue. Greg Clark, thank