Chris Huhne
Main Page: Chris Huhne (Liberal Democrat - Eastleigh)(12 years, 7 months ago)
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Caroline Flint
I will continue to expand on my theme a little, if I may, but I will be happy for the hon. Lady to intervene again if I have time.
If we want to get to the root of the problem, we must talk about reform, and our plans would provide immediate help for millions of families. First, we must deal with the sheer number and complexity of energy tariffs, which are extremely confusing and unfair. They hit loyal customers and penalise those who use less energy, and they really must be reformed. We propose a simple new tariff structure, which will be clearer and fairer and which will help all energy customers to get a better deal. It would work like a phone bill, with a daily standing charge and a cost per unit for the energy used.
Simplifying the pricing of energy would make it much easier for people to compare deals, work out which is the cheapest for them, and ditch the ones that are ripping them off. We need to get rid of expensive primary units and unregulated standing charges, so that people are no longer penalised for being low energy users, which is quite ridiculous. Instead of his “Check, switch, insulate” mantra, could the Secretary of State not try “Simple, honest, straightforward”? That might work better for customers.
What about redress? I understand that only two days ago, on breakfast TV, when asked about our proposal for a thorough investigation of past mis-selling and compensation for customers who have been ripped off, the Secretary of State suggested that that was not worth doing because it would delay other reforms. Labour Members will accept new protection measures as they are introduced, and we agreed that that should happen throughout Europe when we were in office. However—let me challenge the Secretary of State by repeating this—we are saying today that a full investigation into past mis-selling must be initiated, and that those who have been ripped off must be fully compensated.
The Secretary of State for Energy and Climate Change (Chris Huhne)
In fact, what I said was not worth doing was referring the matter to the Competition Commission, because of the delays that it would involve.
Caroline Flint
I am not sure whether that means that the Secretary of State now supports our demand for a full investigation and redress for consumers who have been ripped off.
Chris Huhne
I announced some weeks ago that we were considering redress for consumers. Moreover, we have said that it should not be just a question of a rap across the knuckles or indeed a fine, but that there should be a possibility of redress for consumers as well.
Caroline Flint
Obviously we will explore that in a little more detail, but I think it is clear that those who have mis-sold a package must pay back to people what they have lost through that, and must pay them compensation. It is clear that the fines are not working, because every time a consumer organisation conducts another survey, it finds more evidence of mis-selling. I think that this is quite straightforward, and I do not see why we need to go on talking about it. Let us just get on with it.
The Secretary of State for Energy and Climate Change (Chris Huhne)
The right hon. Member for Don Valley (Caroline Flint) brings a wealth of Government experience to her brief, and I congratulate her on her appointment and on securing today’s debate. She has a particularly difficult Opposition Front-Bench role as her boss, the Leader of the Opposition, was the former Secretary of State for Energy and Climate Change. He held that post for almost two years, and presided over the last Government’s energy and climate change policies. It is his legacy that I am having to deal with.
As we did not hear much from the right hon. Lady about that legacy, I would like to remind her of it. First, we inherited a situation whereby we ranked 25th out of 27 European Union member states on renewable energy. No turf was turned for any new nuclear power stations. There was no progress on that throughout the 13 years the Labour Government were in office.
Chris Huhne
Carbon capture and storage is a crucial technology if we are to ensure that the coal mines and miners in this country have ongoing employment, but in 2007 the Peterhead project was cancelled, despite the competition, with the consequence that we have now further delayed addressing this issue.
Chris Huhne
There was not a single comprehensive energy saving package throughout the time of the last Labour Government, whereas in our first year in office, we have proposed in the Energy Bill a comprehensive package to make sure that householders can save energy, so that we end the scandal we inherited from the right hon. Lady and her colleagues of householders in our country spending more on their energy every year than people do in Sweden, where temperatures are 7° lower than here. That highlights the waste we inherited.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. If the right hon. Gentleman does not wish to give way, he cannot be made to do so. I ask Members to be patient with him.
Chris Huhne
I will happily give way in a moment, but having listed a few legacy issues that we are attempting to deal with, I should make one final point. The leader of the Labour party held this portfolio for almost two years, but only now that he no longer has any power to do anything does he keep coming up with interesting ideas. He recently came up with the interesting idea—I do not agree with it but it is an interesting proposal—that the energy companies should be broken up and should no longer be vertically integrated. However, I can see no such proposal in the Opposition motion. Why is that? Is the right hon. Lady already resiling from the proposal that her boss made just a few weeks ago?
Indeed, I read this motion very carefully expecting, as usual, to come across a number of points on which we could disagree, but I and my ministerial team have consulted, and we cannot disagree with it. We will not oppose it. I hope that the right hon. Lady asks her boss whether she was right not to propose that key idea he made a few weeks ago.
Chris Huhne
I am happy to give way to the hon. Gentleman, who, sadly, has lost his Front-Bench role dealing with these issues. I, for one, thought he performed his duties rather well.
Huw Irranca-Davies
I thank the right hon. Gentleman for his civility. However, he is rewriting history yet again. What did he and his party do throughout the previous decade and longer when we were establishing the consensus on the need to build new nuclear? Also, would he care to comment on the fact that when we left office this country was one of the top five most attractive countries in the world for inward investment on renewables?
Chris Huhne
We do not need to go as far back as that. As the hon. Gentleman knows, the coalition reached an agreement which said that, given the overwhelming support for new nuclear from the Opposition and the Conservative party, it has a part to play. I refer him to my recent speech at the Royal Society in which I addressed how we intend to make sure that we do not repeat the mistakes on new nuclear generation that, sadly, so many Energy Secretaries made in the past.
Chris Huhne
I will make a little progress before giving way again.
Across the country, rising energy prices are hitting households hard. On top of increasing petrol and food costs, many households are facing an increase of more than £100 in their annual dual fuel bills. For those who are struggling, it can seem as if bills simply keep going up. I am sure that all Members will join me in expressing concern about that, but sympathy from the sidelines is not enough. It is our responsibility to do everything we can to help. That is why we are focusing on the things that will make a difference both this winter and in the long term.
First and foremost, consumers need to know how they can cut their energy bills right now. We need open and honest information, so people can see the savings they can make by checking their energy deal, switching tariffs or suppliers, and insulating their homes. One of the positive things to come out of Monday’s energy summit was a commitment from the energy companies that, as part of the voluntary agreement, they will notify all their customers when there is a cheaper tariff than that which they are currently paying. That is a step forward. It is not the end of the story, but it is a step forward.
Mr Weir
Does the right hon. Gentleman agree that the choice of language is important? He says that we can reduce bills by switching and insulating, but is it not the case that, given the massive rise in energy prices, if people switch or insulate they may stop the rise being so big, but bills will keep rising? That is why people are being hit so hard. Wages are not rising, but bills are. Unless we can reduce bills, we will not help the situation.
Chris Huhne
That is a very good point. It is certainly the case that over the past year there has been a substantial increase in world gas prices because of the high growth in the far east, the demand for gas and the Fukushima nuclear accident. That substantial increase in gas prices has inevitably fed through to bills, but I think that people understand that, by getting a grip and comparing tariffs, they can curb that increase, and sometimes offset it entirely.
Ofgem is the independent regulator, and I have a lot of respect for the work it does. It has found that people could save £200 by switching, and I should point out that an additional £100 is available for simple energy insulation steps.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
One of my constituents has taken the trouble to analyse each section of his bill. He found that although the gas price—the actual energy price—had reduced from being 62% of his bill to 42%, his bill had increased. When he interrogated his supplier he found that the profit level it had built in had a 9% increase. In reality, it had taken that money, which was not demanded of it for energy sources, and put it into the profit level. That is why bills are increasing.
Chris Huhne
I agree with the hon. Gentleman, which is why we are happy not to oppose the motion. I agree that there are signs in this market of anti-competitive behaviour and we need to get a grip on that, which is exactly what this Government are doing in supporting what Ofgem—the independent regulator—is doing.
Chris Huhne
I will make a little progress before I give way.
Our approach means working together across the consumer groups and the energy industry to get the message out about checking, switching and insulating. Earlier this week, my right hon. Friend the Prime Minister and I brought the energy suppliers, the consumer groups and Ofgem together to do precisely that. In the new year, Citizens Advice will co-ordinate a “Big Energy Week” campaign, and energy suppliers have put together winter help packages for consumers, which I am sure other hon. Members will welcome.
Geraint Davies
The right hon. Gentleman is saying that he wants to be a champion of consumer rights. He will be aware that the primary consumer watchdog on energy, Consumer Focus, which has mandatory statutory powers, is being abolished by his Government and those powers are being absorbed by Citizens Advice, which has enough on its plate with changes in legal aid, cuts and all the rest of it. Does he not accept that that change will disempower energy consumers, at least over that period of change, and that the powers of Consumer Focus are set in statute in a stronger way than those of Citizens Advice, which is a charity?
Chris Huhne
I do not agree with the hon. Gentleman on that. I care as passionately as he does about consumer rights on this issue. I spent some time on the board of Which?, the consumer association, so I will not be second to anyone on those particular issues. My experience—perhaps his differs—is that many of my constituents go first and foremost for advice on these issues to their citizens advice bureau, so that is an appropriate place to situate such advice.
When the coalition took office, some 400 separate tariffs were available. That is also part of the legacy we inherited from the time when the right hon. Lady’s boss was Secretary of State for Energy and Climate Change. This coalition Government have, in our Energy Bill—now the Energy Act 2011, as it received Royal Assent yesterday—taken powers to force companies to give straightforward information about cheaper tariffs. We are also working with Ofgem to cut the number of tariffs and make it easier to compare them. According to Ofgem, only 15% of households switched gas supplier last year and only 17% switched electricity supplier. Switching should be fast and easy, and we are cutting the time it takes to switch to just three weeks—that is another change that this Government have introduced. In addition, Citizens Advice and Ofgem announced record funding from suppliers for the “Energy Best Deal” campaign, which helps vulnerable consumers to shop around for the best deal.
Chris Huhne
I cannot resist, although I hope that the hon. Gentleman will be raising a matter concerning fuel poverty. I wish he would because I will be able to respond.
John Robertson
My speech is full of stuff on fuel poverty, but I wish to pick up on one of the points that the Secretary of State made. He said that Sweden was using less energy than the United Kingdom, but that is wrong. According to the Swedish Government’s own figures, Sweden uses twice as much energy as this country does, and the cost is more. In addition, according to the International Energy Agency, Sweden’s energy use is substantially higher than that of the UK. I do not suppose he meant to mislead the House, but I think he must get his facts right.
Chris Huhne
The hon. Gentleman needs to examine the situation for households. It is clearly the case that Sweden has a lot of hydroelectricity and a lot of industries are very dependent on it. My point was about households and the household use of heating, which is key.
Millions of households could save just by switching tariffs or payment method. From now on, suppliers will write to customers to tell them about these savings—that is another outcome from Monday’s energy summit.
Chris Huhne
I am going to make a bit of progress before giving way again. The hon. Member for Angus (Mr Weir) has already intervened once, so he will have to wait until I have taken interventions from some of the other hon. Members.
This winter, energy bills will show customers how to save money, encouraging them to call their supplier and check online for savings. They will also have access to advice.
Caroline Flint
The Secretary of State makes much of the fact that people will be able to save if they switch. What about the people who cannot use direct debit? What about the people who have not got access to the internet or those who, even if they did, would find it difficult to navigate their way through?
Chris Huhne
The sort of people the right hon. Lady is talking about are the sort of people we are particularly targeting with our warm homes discount. I heard some of the interventions from Labour Members with mounting surprise, because one of the things that this Government have done, of which I am very proud, is to concentrate help on those most in need—those most vulnerable to rising fuel prices. Through the warm homes discount we have altered the previously voluntary arrangement. I say to Labour Members that their Government operated a purely voluntary arrangement with the big six, so cosy was the relationship between the big six and the right hon. Lady’s boss. It was a voluntary, grace and favour arrangement, whereby support was provided for the most vulnerable. We did not have any truck with that. We decided that we were going to legislate on this, which is exactly what we did. As a result, we will have a two thirds increase in the support made available for these social discounts compared with what was available under the previous Labour Government. So on the matter of fuel poverty, we have been doing exactly the right thing, which is to concentrate support where it is most needed and to make sure that that support is available.
Sarah Newton (Truro and Falmouth) (Con)
The Secretary of State is making an excellent point about targeting resources where they are necessary. Will he congratulate Cornwall council and other councils that are taking exactly that approach and working in partnership with the voluntary sector to provide free insulation and other ways of helping people in fuel poverty to stay warm this winter?
Chris Huhne
I certainly will congratulate the hon. Lady’s local council and every council, of all parties, on that work. I hope that we can maintain a cross-party and consensual view on this. Many councils, some Liberal Democrat-led, some Conservative-led and some Labour-led, have been pioneers in this area, and I want to see them do more. Leading on that is really important for our constituents, and it is something to which I pay great tribute.
People can save money on bills, but they can also save by using less energy in the first place. Far too many UK homes are not properly insulated. Loft and cavity wall insulation can save more than £100—we are talking about very simple changes. The big six energy suppliers, which supply 99% of UK households, all offer free or cut-price insulation, yet many householders still have not taken up the offer. So from December, 4 million of the most vulnerable energy customers will receive letters to tell them they are eligible for free or heavily discounted insulation to their loft or cavity walls. Many of these people will not necessarily save energy because they are currently too cold and keep their bills down. By having that insulation, they will be able to increase their comfort, and that is a very good thing to get through an extremely tough winter. The right hon. Lady is absolutely right to say that one of the scandals in this country, which underpinned the work of the Hills fuel poverty review, is that 25,000 people die each winter because of the cold. We have to deal with that. As has been pointed out, it is a multiple of the number of people killed on the roads and it is a scandal that across this House—I am not going to cast further aspersions on the record of the previous Government—we have not tackled this issue with more vigour until now.
These letters will direct people to a dedicated independent helpline, as part of our programme to ensure an extra 3.5 million homes are properly insulated by the end of 2012. Next year we will also be rolling out the green deal to help even more households save money through energy efficiency.
We must also make sure that help is getting to those who need it most—the most vulnerable households. As I pointed out, discounts have risen very sharply under the coalition, and the extra support will be available this winter. We are requiring energy companies to provide help to about 2 million low-income households through the warm home discount.That is a discount of £120 for 600,000 of the poorest pensioners—substantially more than they have been getting until now. We are spending £110 million on heating and insulation for low-income and vulnerable households through Warm Front.
Caroline Flint
Is it not the case that only about one in 20 pensioners will benefit from the warm homes discount, whereas our social tariffs went to all vulnerable households? In addition, there are cuts of £100 in the winter fuel allowance for those over 80 and cuts for older people of £50. This all adds up when one takes into account the VAT increases and everything else that people have to pay the price for under this Government.
Chris Huhne
The right hon. Lady again makes a point about winter fuel payments which I should have picked her up on previously. She may not be aware of this, as she was not in the Department previously, but we have adopted precisely the policy of the previous Labour Government on winter fuel payments. We have left it completely unchanged. They increased winter fuel payments on a temporary basis and then proposed to bring them down, and we have kept exactly in line with that policy, so I am in no position to accept lectures on this matter from the Opposition as we are implementing the policy that they agreed.
Of course, cold weather payments will also be paid to households in areas with extended periods of very cold weather. Part of the green deal scheme will be designed specifically to provide affordable warmth to low-income, vulnerable households through heating and insulation measures. Those policies will make a difference this winter, next winter and every winter thereafter. However, we also need to take the right long-term decisions so that energy does not become unaffordable in future. We need to keep the lights on in the cheapest, cleanest way and to make sure that households get the best deal in the long term as well.
John Pugh (Southport) (LD)
The Secretary of State may be aware that north of my constituency a find of 200 trillion cubic feet of shale gas has been announced. That will make an enormous difference one way or another if it is genuine. Would he like to comment on that and the difference it might make to prices in future?
Chris Huhne
I am grateful to my hon. Friend for that question. Our overall energy policy is designed to be robust in the face of considerable uncertainties in relation to technologies and what is likely to happen to the price of particular fuels. If it transpires that the early indications we have received from Cuadrilla about the size of the find under Lancashire are correct, there will clearly be an impact on gas prices within the UK. We have already seen that gas prices in the United States are half of those in the UK and the rest of Europe and are even lower than the prices for gas in the far east. This is a very important development and all our policy framework is designed to make sure that we can provide affordable, clean electricity at the cheapest possible price to British consumers in the long run. If that means cheap gas, then obviously the technological imperative is to go forward with carbon capture and storage so that we can use that gas in an environmentally friendly manner. That is precisely why that is so important.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Will the Secretary of State give way?
Chris Huhne
I must make a bit of progress with my speech; otherwise I fear we will be here all night.
Over the next 10 years, we need £110 billion of investment in power plants and another £90 billion of investment in energy infrastructure to avoid the risk of black-outs. If we do not invest now to reduce our energy use and our dependence on fossil fuels in the long term, we will have to rely on ever more expensive imports. That will leave us at the mercy of global oil and gas prices and at the mercy of events in very volatile parts of the world. We have only to look at what has been happening in Libya and the rest of the middle east to see that. The impact on energy security and household bills will be worse. This is a very important way of insuring our country against the sort of economic shocks that we can otherwise expect.
That four-pronged strategy of energy saving, renewables, new nuclear and carbon capture and storage is absolutely essential.
Luciana Berger
I thank the Secretary of State for giving way. He said that energy saving was one of those prongs, and on energy saving he said only a moment ago that the Government are introducing the energy company obligation, which will replace Labour’s carbon emissions reduction target and community energy saving programme. That ECO pot is not going to go just to homes in fuel poverty but will be split, with some money going to subsidise able-to-pay households. Will he tell us how much there will be in that ECO pot?
Chris Huhne
We will be bringing forward the consultation document on the green deal and the ECO subsidy shortly, and all those issues will be addressed. Clearly, we have to make sure that we are getting value for money on both the carbon reduction side and in reducing fuel poverty because they are both very important.
I want to make some remarks on carbon capture and storage, which was raised in Prime Minister’s questions. Despite the fact that all the parties have worked extremely hard on the first carbon capture and storage demonstration project at Longannet, we have not been able to reach a satisfactory deal, as the Prime Minister pointed out. We will not, therefore, be proceeding with the project. That decision is purely about the viability of that particular project and is not a reflection on our commitment to the CCS programme; indeed, hon. Members will have heard me commit us to that very clearly a moment ago.
The long-term need for CCS remains as strong as ever. We will continue working across Government to start a more streamlined selection process as soon as possible and £1 billion will be available, as it was allocated in the comprehensive spending review, for that new process. Over the coming weeks, we will ensure that the lessons from that first process are fully learned and we now know that commercial-scale CCS projects are technically viable and are likely to be financially achievable. We also know more about the best way to procure these first-of-a-kind projects. Our findings will be published and made freely available on the Department of Energy and Climate Change website to help to speed up deployment of CCS both here and abroad. We will study those lessons closely as we develop the forthcoming CCS road map setting out our vision for CCS deployment.
Caroline Flint
I thank the Secretary of State for referring to the situation with carbon capture and storage projects around the country. Will he explain to the House how the Government will look to use the great deal of work and research that have been done at the plant in Scotland to make sure that the endeavours, hard work and ingenuity there are not lost but are supported?
Chris Huhne
I am grateful for that question. It is absolutely right; we have learned an enormous amount from that. A lot of work has gone into the negotiations and a lot of good engineering work has been done with the front-end engineering and design studies. They will all be published, if they have not been already, and will be made available to everyone. We are absolutely confident, as a result of this process, that we are able to go ahead with the CCS project within that budget. Unfortunately, at Longannet the difficulties were specific to that project, including the length of the pipeline between Longannet and the reservoirs, as well as other issues concerning the rest of the plant such as its upgrading to comply with the large combustion plant directive. As a result of the knowledge that we have acquired in that negotiation and as a result of those feed studies, we are confident that we will be able to take a project forward.
Mr Weir
Earlier in his speech, the Secretary of State referred to the disgraceful decision of the previous Government to abandon the gas CCS project at Peterhead, but are not this Government doing exactly the same with Longannet now? It was chosen as the only viable CCS plant in the competition, as no one else came forward. By abandoning it now, is he not putting back CCS development and ensuring that its much talked about exportable technology will not be developed in this country?
Chris Huhne
No, I disagree with that. I think that we have a very good track record at a number of our leading universities, with Edinburgh being first and foremost amongst them, of work on carbon capture and storage. One lesson that we have learned from the negotiations is that we can build a commercial-scale CCS plant with £1 billion. Indeed, we have had a very clear indication of interest back at Peterhead from Scottish and Southern that it would be prepared to do that with consortium partners. That is clearly going to be an offer that other contestants will have to beat, so for all the reasons that I have given and that I have explained at considerable length, we are determined that we should be successful with CCS technology. It is disappointing to me personally and to many others that we were not able to proceed at Longannet because of the specific problems there, but that certainly does not mean that we are shelving CCS.
Andrew George
I appreciate that my right hon. Friend is giving the House the benefit of time and his advice on the issue. Nevertheless, there will be concern about the impact that that outcome might have on the time scale for the delivery of an effective CCS programme. To be clear, is he saying that the difficulties at Longannet were primarily financial or technical? Does that raise a question about the viability of the technology, or can he reassure the House in that regard?
Chris Huhne
I can reassure the House that on the basis of the feed studies, that does not raise questions about the generic technology. What arose were questions related to the specific costs of employing the technology at Longannet, given how far away it is from the reservoirs and so forth. Those were the issues. We are confident that we can procure a CCS commercial scale plant within that £1 billion. That is what we intend to do.
Ian Lavery
A billion pounds was allocated to the CCS project at Longannet. I am amazed by what was said at Prime Minister’s Question Time and by what the Secretary of State has just said. That it is not going to happen. Projects 2 to 4 were already in the pipeline—excuse the pun—and I believe there are a number of interested parties. Will the £1 billion allocated for Longannet be available for one of those projects or will it be available across the board? Will the right hon. Gentleman confirm that it will be committed to CCS with coal, or could it be gas?
Chris Huhne
Let me say clearly that one of the things we will do is attempt to align our deadlines on this with the European Commission’s new entrant reserve competition. One of the conditions of that competition is that the CCS plants have to be up and running and ready by 2016. That is in answer to the earlier question about the deadline. We do not foresee a slippage in deadlines.
There is money available from the European budget to support those projects. Money will be available. That £1 billion from the UK Treasury is secure. In addition, there may be help for running costs from the electricity market reform contracts for difference. With all those things we ought to be able to make sure that we get commercial-scale carbon capture and storage up and running. The projects that have been proposed to the Commission are a mixture of coal and gas. We want to make sure that we are doing both.
I hope the House will come away knowing that we are fully committed to the programme and the technology. What happened at Longannet is a disappointment. We would have liked it to go ahead if we could have done it within the affordability envelope that we had and if we had not hit those specific project problems there, but we will now go ahead elsewhere and we are confident that we will be able to get the commercial-scale CCS.
Our proposals to reform the electricity market—I have already mentioned contracts for difference—will deliver the best deal for Britain and for consumers because they will keep prices down and ensure that consumers are protected. We are working on giving Ofgem powers to force companies to give money back to consumers if the companies break the rules. That is the point about redress that the right hon. Lady mentioned.
Caroline Flint
Will that include customers who have already been victims of mis-selling or is the policy only for those who might be misled in the future?
Chris Huhne
The right hon. Lady knows that unfortunately it is a strong principle right across the House, and I am sure she will agree, that we should not have retrospective legislation. Legislation is for matters going forward. I agree that it would have been good if we had had legislation allowing for redress some years ago, but we have been in government only since the last election. For 13 years that was not done by the Labour Government.
Karl Turner (Kingston upon Hull East) (Lab)
Did the Secretary of State raise the issue of mis-selling at the energy summit? It seems to me that he probably was not there long enough to do so.
Chris Huhne
The hon. Gentleman is quite wrong about that. Mis-selling is clear. Ofgem had already tackled that with substantial fines and with the public reputational risk. As a result of the mis-selling that some of the companies were discovered to have engaged in, a number of them have said that they will not go down the doorstep route. There is therefore clear action on that already, but I agree that what should happen is not just a question of fines or making sure that the companies get the rap—[Interruption.] I have raised the matter with the companies and with Ofgem. It is important to make sure that there is also the possibility for Ofgem to provide redress to consumers who have lost out. That is an important principle. All of us on the Government Benches will want companies to rise to their responsibilities.
We are also working to open up the energy market to smaller companies. In the past, regulation stopped independent suppliers serving more than 50,000 customers. We have already raised the ceiling to 250,000 customers, and we are working with small suppliers to make it easier for them to comply with regulation.
Global energy prices are beyond our control, but we are doing everything we can to help households with their energy bills this winter. On tariffs, bills and insulation, we are making it easier for people to save money and save energy. Together with consumer groups and industry, we are working to improve the offer to consumers. We are taking action to help the most vulnerable households to cope with rising bills and inefficient properties. From the green deal to the reform of the electricity market, we are making the right long-term decisions to ensure warm homes and affordable, secure energy for the future.
Caroline Flint
At Prime Minister’s Question Time today the Prime Minister suggested that he supported the opening up of the energy market to a pool. Does that mean that the Government agree with the Labour Front-Bench team that the pool should be opened up in such a way that the big six should put all their energy into a pool for everybody to compete for?
Chris Huhne
I certainly agree. We have been talking to Ofgem about this and we have been talking with the big six. I found it a very interesting proposal from Scottish and Southern that it was prepared to trade a substantial amount of its electricity in the wholesale market. Scottish and Southern said 100%—of course, that is 100% of the spot market; it does not mean that Scottish and Southern is prepared to trade 100% of its electricity. The devil is in the detail. We have to make sure that the forward market is also liquid.
I am absolutely committed. I am not in favour of the Opposition’s proposal that we should refer these matters to the Competition Commission, because for two to five years that would put a freeze on the whole market. None of the big six would need to do anything at all. They would be able to put their prices up with impunity, they would be able to cut their investment, they would be able to pay more dividends to shareholders, and we would have an awful long time to wait before we had any real reform. The reality is that we think that we understand enough about what is not right in the market, at the retail end and the wholesale end, and are working very hard with Ofgem to ensure that it is put right, which is exactly what we will do.
Dr Alan Whitehead (Southampton, Test) (Lab)
Will the Secretary of State give way?
Chris Huhne
I am afraid that I have finished my speech, as delighted as I would have been to give way to my neighbour from Southampton.
Luciana Berger
I thank my hon. Friend for his intervention and I shall cover that point in just a few moments.
There has been an issue with doorstep selling, which four out of the six energy companies have had to stop because it has been proven that people were mis-sold packages and were paying more than double what they were before. We know from last week’s Which? report that a third of people are not offered the best advice from their energy suppliers when they call them for advice about which tariff to switch to.
On Monday, we heard and saw all the news about the energy summit and thought that that was a great opportunity. The Government could have done something tangible to help, but all we got was more of the same. We were told to shop around, ring this number and look at that website. I looked at the DECC website to see what the exact outcome of the summit was, and it tells us:
“This winter suppliers will place a cheaper tariff signpost message on the front page of bills, encouraging customers to call their supplier or visit a website to find out if they could be saving money on their energy bills.”
We already know that many people do not have access to the internet or to websites and cannot benefit from cheaper tariffs because they do not have access to a bank account or because they are unable to secure direct debits, an issue that specifically affects pensioners. We already know that that approach does not work, but the energy summit had no outcome on simpler tariffs, improving trust, reforming the market or increasing competition. It showed an out-of-touch Government wedded to an out-of-date orthodoxy at the expense of everyone else.
In her opening speech, my right hon. Friend the Member for Don Valley (Caroline Flint) set out a very clear plan to limit energy cost increases and to support struggling households.
Chris Huhne
The hon. Lady mentions the clear plan from the right hon. Member for Don Valley (Caroline Flint), but will she clarify for the benefit of the House whether it is now Labour policy to break up the big six, as the leader of the Labour party suggested, or to have a Competition Commission referral? May we have some clarification?
Luciana Berger
The Leader of the Opposition has said that we are seeking to break the dominance of the big six. He has not explicitly said that he wants to break them up—[Interruption.]