Energy Price Freeze

Anas Sarwar Excerpts

Wednesday 6th November 2013 Commons Chamber

[Anas Sarwar (Glasgow Central) (Lab)]

The Secretary of State spoke for just over 35 minutes. Nothing he said will have given any comfort to my constituents, or to anyone suffering as a result of the energy crisis. Perhaps he should reflect on what he has said and come back with something that will mean a lot more to people struggling with their household bills at this difficult time.

[Toby Perkins]

My hon. Friend will be aware that thousands of people in Chesterfield have signed a petition in favour of the policy we are debating today. After today, rather than send them a long letter, I will send them the Secretary of State’s speech, so they can see exactly what the Liberal Democrats think of the struggles they are facing.

--- Later in debate ---

[Anas Sarwar]

Absolutely, although I imagine my hon. Friend’s constituents would fall asleep after five minutes rather than read the speech in its entirety.

As winter bites and the nights become colder, many of our constituents are again worrying about the cost of heating their home. Wholesale energy costs have increased by only 1.7% this year, but the average bills that Glaswegian families have had to pay have rocketed by more than 10%. According to Fuel Poverty Evidence Review, more than 800,000 Scottish households—almost 35% of Scots—are fuel-poor, and spend 10% or more of their household income on energy.

What my constituents know, what I know and what the entire country knows, with the apparent exception of both the Prime Minister and the First Minister of Scotland, is that the British energy market is broken. It is dominated by only six companies, which collectively supply 99% of British households and generate more than two thirds of the country’s electricity.

[Mr MacNeil]

According to figures from the House of Commons Library, last year UK electricity prices increased by 5.7% on average, while the EU average was a fall of 3.5%. In fact, the UK had the highest increase of all the G7 and EU countries, bar Japan. Last year, the UK had the third highest prices in this area. Eight years ago it was little better—the fifth highest in the EU. Why does the hon. Gentleman think that the UK consistently pays the highest energy prices in the developed world?

[Anas Sarwar]

The hon. Gentleman highlights the need to fix a broken market across the UK. The bizarre thing is that he wants to leave the UK, but stay in the UK energy market. That is against the interests of the people of Scotland. I will come on to the wider policy of the Scottish nationalists in a moment.

Given that we have had price hikes of more than £300 since the last election, and at the same time more than £7 billion of profits have gone to the shareholders of the big energy companies, does that not highlight the case for breaking the monopoly of the big six companies?

[Duncan Hames]

Will the hon. Gentleman give way?

[Anas Sarwar]

I am sorry, but I have given way twice already.

Last week, we saw the big six sit before the Select Committee on Energy and Climate Change and claim that prices in the past few years have been driven by wholesale costs, when it has already been demonstrated that that is not the case. That was confirmed by some of the smaller companies, one of which told the Committee:

“I can’t explain any of these price rises… I have been somewhat confused by looking at the explanations for the price rises that we’ve seen in the past three or four weeks.”

There have been billions of pounds’ worth of profit while pensioners in my constituency face the impossible choice of heating or eating this winter. What could be more indicative of a broken market than one that leaves our most vulnerable citizens unprotected at a time of greatest need, solely in the name of higher profits?

The problem is not simply the behaviour of the energy giants. My constituents are literally paying the price of being trapped between an uncaring, out-of-touch Tory-Government pursuing cuts and profit at any cost, and a distracted Scottish Government desperately trying to frame any and every problem as a reason for independence—two Governments more interested in electoral dividing lines and narrow ideology than in improving the lives of the Scottish people. They are choosing to stand up for the vested interests of the big six energy companies and boost their profits while Scottish families struggle to pay their bills. It is indeed a sad day when Governments become a cheerleader for the energy companies, instead of putting struggling people first.

Scots are now faced with a crippling combination of rising living costs and frozen wages that have created a cost of living crisis that both Governments are failing to address. Disappointingly, however, Alex Salmond wishes only to talk about the powers he wants rather than getting on and using the powers he has to make a difference. There is now an interesting coalition in the context of the constitutional debate in Scotland. We have a coalition of the Scottish National party, the Tories, the Liberal Democrats and the big six energy companies all standing up for their own interests, not the interests of the people of Scotland. The Prime Minister’s policy was not announced first by him: the first person to announce the Prime Minister’s policy on energy prices was the Deputy First Minister of Scotland, Nicola Sturgeon, at the SNP conference. She said that the SNP wanted to take the cost off the energy bill and instead put it on the tax bill, meaning that people who are working hard will continue to have to pay the price while big energy companies will get away scot-free. Those are the wrong priorities, and they are damaging.

What else have we heard from the nationalists? They want not just to let energy companies off meeting their responsibilities for renewables, but give them a massive tax cut. They want to cut corporation tax, which will mean that after independence they will have more, not less, profits. What is even more confusing is that they say—we have heard it already from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil)—that the UK energy market is broken and that is why we need independence. Their policy, however, is to say, “Let’s break away from the United Kingdom, but let’s share the UK energy market.” That is not in the best interests of Scotland. Scotland makes up 8% of the UK population, yet one third of spending on renewables is spent in Scotland, so the whole of the UK is contributing, through their energy bills, to supporting the renewables industry. Do we honestly think that one third of renewables spending will continue to be spent in Scotland after independence? I do not think so. Independence would break the historic pooling of resources across the UK for the benefit of all.

[Mr MacNeil]

Is the hon. Gentleman aware of the purchase of renewable energy in the Republic of Ireland?

[Anas Sarwar]

Absolutely. We have not heard about Ireland for a long time. I am happy to consider the example of Ireland to show why we are better off in the UK. Corporation tax in Ireland is half the UK rate, but unemployment is double that in the UK. That shows us how working in partnership with our friends and neighbours in England, Wales and Northern Ireland benefits bill payers not just in Scotland, but across the UK.

I want to highlight a positive example in my constituency and my city of what a caring administration can do to help people who are struggling at this difficult time. The Labour-led council in Glasgow, which, despite facing more than £150 million in budget cuts from the Scottish Government, has again stepped up to protect Glasgow pensioners over the age of 80 by offering a £100 winter fuel payment to those struggling to meet the costs of energy this winter. That is a Labour council using its powers to protect the most vulnerable in our communities. It is not making excuses about why it cannot or will not act, and it is not looking to pass the buck or put the blame on to someone else. It is not pointing fingers, or using other people’s misery as a basis to promote a political agenda or independence. Instead, it is providing a lifeline to thousands and responding to the cost of living crisis affecting our constituents. I am proud that on the Labour Benches we are standing up for British consumers.

Under a Labour Government, we will not just break up the big six energy companies’ monopoly, but ensure fairness in the system and cut bills. For the people in my constituency, 38,549 households will have their bills cut if a Labour Government are returned at the next general election. We will save a typical household £120 and an average business £1,800, at a time when household budgets are being squeezed. Labour will not stand by but take action, as Glasgow city council has done, to help hard-pressed Scottish and UK families. We will put people first, while others continue to put their ideologies and political obsessions before the interests of the people of Scotland and the UK. We will tackle the cost of living crisis that is denied by the UK Government and the Scottish Government, despite official figures from the House of Commons Library that confirm that working people are £1,500 a year worse off under those Governments. Prices have risen faster than wages in 39 of the past 40 months, on both the First Minister’s and the Prime Minister’s watch; and chief executives have enjoyed pay increases averaging 7%, while public sector workers have had to endure real-terms pay cuts and worsening conditions. Tackling energy prices is crucial to easing the burdens on family incomes, which are symptomatic of a problem that these Governments are simply unable or unwilling to address.

As my right hon. Friend the Leader of the Opposition said yesterday, the Government have nothing to say about our plans for the living wage, the falling value of the minimum wage or zero-hours contracts. They are silent because they believe in a race to the bottom and they know these things create the low-wage, high-profit economy that they seek and fundamentally believe in. It is an economy where profits of £7 billion and tax cuts for the richest peacefully co-exist every single day with millions of people living in poverty. It is an economy that prioritises six large companies over the well-being of 60 million people.

The Opposition want real action to help British families: a price freeze while our broken energy market is fixed; a regulator that can cut unjustified price rises; a ring fence between the generation and supply businesses of the energy companies to ensure proper transparency and to force energy companies to trade the energy they produce in the open market; and a new simple tariff structure that people can understand. People in this country deserve action to help them during the winter months, not the damaging ideology of this Tory Government.