Energy Price Freeze

Debate between Christopher Pincher and Alan Whitehead

Wednesday 6th November 2013 Commons Chamber

[Christopher Pincher (Tamworth) (Con)]

I thank you, Madam Deputy Speaker, and my legion of fans. I apologise for not being here for the opening exchanges of this important debate, but I had to attend a funeral. I congratulate the Opposition on tabling this motion but, in as much as we are discussing long-term structural energy issues, as much as it is a challenge to the Government, it is also an admission by the Opposition of their failure during their 13 years in government, when they had the time, the money and the majorities to make changes but did not do so.

The shadow Secretary of State said, with characteristic chutzpah, that we need to develop more home-grown energy. Of course, she is right, but the question then must be: why during 13 years of Labour Government was no new nuclear power station opened? The last to open was in 1995 and the next will be opened under a Conservative-led Government in the future. Labour also had no keenness to explore shale gas. These things the Labour Government failed to do. Labour Members have said that we need greater competition in the energy market—

[Dr Whitehead]

rose—

[Christopher Pincher]

I will not give way, because I am on borrowed time—[Interruption.] In a parliamentary sense. In addition, both the Opposition spokesman and the and Treasury Bench spokesman need to speak.

The Opposition have said that we need greater competition in the energy market. They are right, but the energy market as it stands—the big six—is Labour’s creation. The right hon. Member for Oldham West and Royton (Mr Meacher) called it an oligopoly, but it is Labour’s oligopoly and the Opposition must take some responsibility for that, as the hon. Member for Blaydon (Mr Anderson), who is now shaking his head, said in his speech.

The Opposition have now suggested that we should fix prices under a price freeze for a period of time so that we can right the market. If something looks too good to be true, sounds too good to be true and smells too good to be true, most right-thinking people would say that it is too good to be true. A price fix is too good to be true.

Fixing prices, as many experts have said, will only mean that the energy companies will hike their prices in anticipation of that fix. That means that people will be paying artificially high prices, particularly if the wholesale price falls during the period of the freeze. It is not just me who is saying that; Professor Dieter Helm is saying it, too.

The Opposition also say that we need to get more competition into the energy market, but if we listen to Steve Fitzgerald, the darling of the Select Committee who ran rings around some of the players from the big six at that meeting, or to First Utility, the Leader of the Opposition’s provider of choice, we hear them say that a fix will make it more difficult to operate in the market. It will not allow small players in and will entrench the position of Labour’s big six. The Labour party ought to admit that.

The Opposition also say that investment will flow into our infrastructure anyway. I do not believe that is true. We need to spend at least £110 billion in the next 10 years on our power stations, our pipes and our pylons to keep the lights switched on and we need much of that investment to come from private companies. The hon. Member for Southampton, Test (Dr Whitehead), who made a thoughtful speech and is my colleague on the Energy and Climate Change Committee, said that he does not believe that the energy companies will invest that sort of money. We learned in the Select Committee inquiry just a week ago that E.ON alone has invested £7 billion in its generating capacity over the past five years. If we extrapolate that over the big six, that would suggest that they are spending some £40 billion on the infrastructure we so desperately need.

If the investment dries up because of a price freeze that sends the wrong message to the markets, the poor old taxpayer—the van driver, the nurse, the doctor, the teacher and the pensioner—will have to pick up the tab. That is why I think the Opposition’s proposal is a con. It is a scam. It is a swizz. It is voodoo economics. It is political charlatanism. They know it and the electorate can see it, too. What we need is not some artificially high price freeze in the future but price cuts now. That is what our electorate want and what our constituents tell us. If we roll back some of the green levies that account for some £112 on the average dual fuel bill, if we make it easier to switch, saving people some £200, and if we get people on to the lowest tariffs, saving them about £158, we can reduce bills now for hard-pressed consumers. That is the way to deal with our energy challenge.

The proposals made by those on the Labour Front Bench might look good and might sound good on television, but we and our voters know that they are not going to wash.