Energy Price Freeze
Debate between Christopher Pincher and Neil Carmichael
Christopher Pincher (Tamworth) (Con)
It is always a pleasure to follow the hon. Member for Ynys Môn (Albert Owen), who is a fellow member of the Select Committee on Energy and Climate Change. One of the disadvantages of speaking at the fag end of any debate is that everything that can be said has been said, but, of course, not everybody who can say it has said it, and I am no exception to that rule. Although I will try not to repeat other contributions overmuch, some points will be worth repeating.
During the last debate on energy in November, I said that the right hon. Member for Don Valley (Caroline Flint), the shadow Secretary of State, made a characteristically ebullient speech. She conducted herself today with no less chutzpah, but I have to say to her that I think her arguments would have greater resonance across the House and the country if she were prepared to recognise that the failures of the past have contributed in no small measure to the challenges we face now. She talked about the need to increase competition in the energy market, but she refused to acknowledge—indeed, she danced around the fact—that the energy market was consolidated under Labour, going from 14 major energy providers down to just six. She talked about the need for greater energy security, so why have we not invested in more nuclear stations or in home-grown shale gas so that we do not rely so much on international hydrocarbon prices and imported gas, which is increasing energy prices for so many of our customers? It is therefore no small surprise that we are greeting her current argument for an energy price freeze with a degree of scepticism. [Interruption.] I notice that she is chuntering away from the safety of the Opposition Front Bench. That is probably the best place for her, because she can do less damage to our economy and to her country sitting there than on the Government Front Bench.
Christopher Pincher
I will not give way because I know that the hon. Member for Huddersfield (Mr Sheerman) wants to speak.
If we have a price freeze, these will be the facts. It would encourage providers to hike their prices in anticipation of a blanket freeze, which means that our constituents would pay artificially high prices. It would drive smaller players out of the marketplace and consolidate it even further. That has been said by Dieter Helm, First Utility—the Leader of the Opposition’s provider of choice—Adam Scorer of Consumer Futures and Steve Fitzpatrick of Ovo. It would also drive investment out of the energy sector, as many hon. Members have said during the debate. The chief executive of E.ON said at a meeting of the Select Committee that the cost of capital goes up every time the Leader of the Opposition opens his mouth and talks about a price freeze.
We all accept that about £110 billion has to be spent on our energy infrastructure—including our pipes and pylons—over the next 10 years to keep the lights on and the kettles boiling. Such investment has largely come from the big six over the past five years. E.ON has invested £7 billion, and Centrica has invested £6 billion. If that spend is extrapolated across the big six over 10 years, they will invest about £70 billion. If we are to find the £40 billion extra, we will have to rely on investment by small independent players, as well as bigger companies. Otherwise we will have to fall back on the poor benighted taxpayer to add cash to consumer’s bills or—heaven forfend—to borrow more money, which the shadow Chancellor seems to like to do, in order to pay for the infrastructure.
We need to get in the investment, and a price freeze will only discourage investment, but we really need to reduce bills. That is what our customers want. Encouraging 24-hour switching may cut bills by £140; reducing the number of tariffs from 340 to just four can cut bills by £200; and rolling back the green levies can cut bills by £50. That will help our hard-pressed constituents—the hard-pressed consumers—not the gimmick proposed by Labour.