Energy Markets Competition Assessment

Angus Brendan MacNeil Excerpts

Thursday 27th March 2014 Commons Chamber

[Mr Davey]

I am pleased that the competition assessment is focusing on vertical integration, because I think that it needs to be looked at. Ofgem proposed the introduction of a market making obligation because it wanted to tackle some of its concerns about vertical integration. However, the consultation document states:

“We recognise that there are benefits to vertical integration in terms of cost efficiency…and in terms of supporting investment to maintain security of supply. However there are also costs in terms of barriers to entry.”

The report is balanced, and, unlike the Labour party, has not rushed into making a judgment. Everything cannot be the fault of vertical integration. The gas market is not vertically integrated, but I believe that there are serious problems related to competition in the domestic gas supply market.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Any review of the energy market is welcome, but yesterday, referring to nuclear power, Scottish and Southern Energy said

“the deal which the UK government has reached with EDF”

—the French energy giant—

“over the construction of two reactors at Hinkley Point…will add considerable costs to consumer energy bills for 35 years.”

Will the “full market investigation” cover the cost of nuclear power and its effect on comprehensive spending review bills, and if not, why not?

[Mr Davey]

The investigation will not deal with that, because it involves policy on the generation mix. A mixed, diverse source of low-carbon energy is the best way in which to protect the consumer. There are Members of Parliament and, no doubt, many people outside who know the future—who have a crystal ball and know what the various technology costs will be in the 2020s. Perhaps SSE has a crystal ball; perhaps the hon. Gentleman has a crystal ball, but I do not. I have created a framework in which there is competition between technologies, and I believe that that is the right way in which to proceed.