Greg Clark Interview Election 2017

The time is ten past eight. When Labour promising 20 that they would

freeze the energy, the book thrown at them. Companies would be to

schedule over them and they would not go up again. Now the

Conservatives have a new plan, cap energy prices. They want to convince

us that this plan unlike the plan of the then Labour leader Ed Miliband

will save customers money. Can they be serious? Here is what David

Cameron said to us in 2013. There is one thing that governments can't

control and that is the international wholesale price of

gas. I know we'd like to live in some sort of Marxist universe where

you can control all these things, but it needs a basic lesson in

economics. Greg Clark is here. Good morning. What do plan? The plan is

for that part of the energy market, the CMA, has determined is not

sufficiently competitive and that market power by the big energy

companies is being abused to, in their words, charge a level of

tariffs above a level that can be justified. We think there should be

protection through a cap in the default tariffs that people go on to

if they are not part of the competitive market. That would work

for everyone in those standard tariffs and would cost the energy

companies 17 million or so people on those tariffs, up to ?100 a year

could be saved? What the competition market authority established was

that the overcharging that they estimated with running at about ?1.4

billion a year. That is varying over time. The additional costs for

consumers has ranged from ?70 to about ?200. Where would that money

come from? He will come from the energy companies having to reduce

their prices. Whether you envisage them finding the money? What the CMA

said was that there were two sources. One that they were

overcharging and that this was... What would they not do? Handed out

as dividends? Given to other customers? -- what would they do?

Reduce the excess profits they were making by exploiting what they

called the unilateral market pattern. The second thing that the

CMA observed in their report is that the lack of competition, the market

power that they have, has led to inefficiency in the energy companies

and that one of the benefits of putting greater pressure on them

would be to get them to perform more efficiently. In effect, customers

including some bold rubble customers were paying for flabby, tissue. --

vulnerable. That sounds like magic. It is comes from nowhere, the money?

No. We have established that it drives down prices and makes

companies are efficient. What they have said and I agree with is that

these pressures should be applied to the big six when it comes to their

standard variable tariffs. You can see where the money is going to come

from, the big six average cheapest tariff up by 100 quid, slightly more

than 100 quid. Already, people are paying for your policy and it is the

people who have shopped around and have got themselves better deals,

those deals are going to go and people are going to be paying more.

The key finding from this two-year investigation was that in effect,

there is two parts of the market. They competitive market for people

who scour the Internet every night, find the best tariff, switch

instantly. More and more people do that. No. The same level of

switching. 16% to give. Isn't the answer they get more people to do

it? Levy make the point to answer the question that you ask for. --

let me. In the competitive market there is vigorous competition, so

any attempt to raise prices there will have a competitive response on

the part of the smaller players. There is market power. Perhaps

because they don't have Internet access, they are not able to switch

and it is right that they should be given some sort of safeguard against

being... This is exactly what Labour said in 2013. The Labour policy in

2013 would have been totally counter-productive. It was built as

a freeze, in fact it was advertised... Eventually it became a

cap. They were promising to do pretty much the same thing as you.

Those people who couldn't move easily, they are going to be

protected and that is what you are doing. We were told all sorts of

things. Other with going to be less investment, indeed that is what the

companies are saying today. That they would raise their prices and it

seems that they are already raising their prices in order to make sure

that they don't suffer when that happens. All those things that you

promised would happen when Labour did it, are happening all going to

happen now. No. Labour's was a very crude policy. It was too directly

intervene by politicians setting the tariffs. We have responded to a

two-year investigation to the CMA that establish that there is ?1.4

billion a year on average of overcharging. When you are

presenting... Just to make it plain. Hold on a second. You are penny it

all on the CMA suggesting there is intervention. -- pinning. You didn't

go -- they didn't go this far. You're going further. They

identified this damage to consumers. They said that there shouldn't be a

price cap for those on prepayment meters. They were in two minds as to

whether that should be extended beyond that. You have gone to be

unaware they were. The majority said that we should leave it there. The

minority report said that that was not going to remove that that on to

consumers quickly enough. So you shouldn't. We are taking the same

approach that the CMA have given to prepared meters. Doing what the

minority report said. Ayew guaranteeing that those on variable

tariffs will see prices actually fall next year? -- are you. It is a

matter for the energy regulator to clarify. Given the clarity of the

view that there is ?1.4 billion overspend, the purpose of the

exercise is to remove that abuse and to bring down bills for... If

old-style prices were to go up, then prices would go down. That is one of

the pieces of madness for the Labour Party policy. That is very

important. If you are a consumer, off, we'll take a view. You will not

be able to say if prices will rise Carol Horsfall with any degree of

certainty. -- rise and fall. People who don't switch, a safeguard should

be determined by inspecting the wholesale prices and international

markets as you say. The cost pressures should be done by the

energy regulator. But I think it's important. It should not be done by

a politician, it should be done by the energy company. Is this

something that you can simply do? Enforce it and give that power to

the regulator do you consult on it? We would legislate. To avoid any

legal holes, some companies have said they are very much against it.

You think this is watertight legally? Yes, that is why we wanted

to legislate and make it absolutely clear. It's a very important part of

the programme of the Government. Right from the outset, Theresa May

before she became leader of the party and Prime Minister said that

she was determined to make sure that there was and economy the works

everyone. When you know that some of the most vulnerable people in

society are being charged ?1.4 billion more than the authorities

have justified army have lacked on that. We will. Let's turn to

immigration. Let's look at what the Federation of Master builders, the

Institute of directors, London first, any number of business groups

are saying to you, immigration targets are wrong. It is not going

to wrong. It is not the right way to approach the sink. What do you say

to them? I talk to business at all the time as part of my job. They,

depending on the area that they are in, they rely on skills

internationally. Take nuclear power, that is an international market.

What has always been clearly understood is that there is no

suggestion that no one would be able to come and work in this country

that has skills that are acquired, or indeed go from this country

elsewhere. In that case, who are you targeting?

The key thing is we will have control that we did not in the past.

We will look at how we design that policy to make sure that business

and industries continue to have access. Given there are so many

saying that they need access to people and we need them to be coming

right across the piece, through NHS, farming, building, all sorts of

skilled people, universities, where are you going to get your reduction,

your sizeable reduction, from? It comes from being able to set our own

policy. Once you set your policy, where will you look? To look at the

circumstances of each sector and say what is the right policy for that?

Sorry to interrupt, but who is coming at the moment who won't be

coming to make sure you hit your target? I assume you want to hit

that target within the next Parliament. You would want to do it

within five years. I was going to say, part of what we need to do as a

country and an economy is to make sure that we develop the skills in

this country to be able to benefit from the opportunities that there

are. I mentioned the nuclear industry, and we got a big expansion

of nuclear power, because we haven't invested in new nuclear power over

the years, we are having to import skills from other countries. Part of

the Hinckley investment is to build a national College of nuclear

engineering so that we are developing those skills in this

country. In the longer term, that would know that help, but if you go

into this election with a target of tens of thousands, and one assumes -

you haven't confirmed it - you aim to meet that target within five

years? Our manifesto hasn't been published. Let's assume that you

tried to reach that target, what people will say, and what all of

those businesspeople I quoted to you are worried about, is that this will

impact on them. What you seem to be saying, on the sector by sector,

don't worry, but somewhere, if you are going to do it, is its students,

for instance? There is an understanding, and I and the

Government recognise that competitive use of our industry

means that in lots of different areas we depend and prosper from

having an exchange. That is completely understood. At the same

time, over the medium and long-term, we should as part of our industrial

strategy, something we should have been doing anyway over decades,

building the level of skills in this country, and that is the context in

which we will exercise the powers. It is a target but not something

you're going to hit? That is not the case at all. Big pillar of the

industrial strategy is improving the level of technical skills in the

workforce. Again, this is a very important generational change to

revive technical education and training. What has happened to

free-market conservatism? It is being pursued with vigour and it has

always been a tenet... You are intervening in the gas and

electricity market, presumably thinking about the insurance market,

I don't know, bread, fruit - what has happened? Part of the

Conservative tradition is where we have markets and we have opened up

areas of industry that were previously state controlled the

market. You will know over the years that we have been an innovator in

putting in place competition regimes there. And now you are going in the

other direction. We have been a world leader in this, making sure

dominant players with market power over consumers cannot abuse that

market power. It is entirely in the tradition of our competition

policy... Is it? Did Margaret Thatcher do that? When Margaret

Thatcher privatise the energy markets, she set up the special

regulator. It was done before anyone else in the world, and you need to

keep that regulation up to date. If you are presented by the statutory

competition authority with a conclusion that ?1.4 billion is

being taken out of the pockets of some vulnerable consumers, it is

entirely in keeping with the conservative tradition and standing

up for ordinary families in this country that Theresa May is

determined to do that we should continue. Greg Clark, thank