Energy Price Freeze
Debate between Fiona O'Donnell and Ed Davey
Mr Davey
It fits in exactly, and I am delighted that the hon. Gentleman has raised that point. The larger companies can buy 18 months ahead, so if there is a rise in wholesale gas prices, they are hedged—they are protected. The smaller companies find it much harder to buy ahead, so if the wholesale prices go up, they get crushed. That is the truth about Labour’s policy. It may seem popular in Labour’s focus groups, but I am afraid it has not been thought through. As The Guardian said, it is “good politics”, but it is “bad policy”.
Fiona O'Donnell (East Lothian) (Lab)
I am not sure whether the right hon. Gentleman’s thought experiment had started when he drove his Energy Act 2013 through Parliament, which he certainly took plenty of time to do. Can he point to one single measure in that Act which has increased and supported competition?
Mr Davey
I am glad that the hon. Lady has mentioned the Energy Act 2013, because she voted for it. If she looks at the detail, she will see that not only did it reform Ofgem by giving it more powers to grant compensation to consumers who were badly treated, but it supported Ofgem’s retail and wholesale market reforms by having reserved powers to make sure they went through. Those powers are in place and are making sure those reforms go through.
I was talking about Labour’s bad energy policy, and let us look at its record in government on energy markets and prices. In the retail markets, Labour allowed the big companies to choke off proper competition—the very competition that privatised markets need in order to operate in the interests of consumers. It created Labour’s big six—the big six that dominate retail and wholesale markets.
Energy Bills
Debate between Fiona O'Donnell and Ed Davey(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Davey
I am grateful to my hon. Friend for his contribution, as always, but I must say that the most secure and effective policy is a mixed diverse approach. The mixed diverse approach ensures energy security but as, over time, we see reductions in the cost of alternative energy, such as clean energy, it also becomes increasingly good value for money.
Fiona O’Donnell (East Lothian) (Lab)
That was like a bad sketch in “The Fast Show”, with the Secretary of State saying, “The consumer gives the energy companies £120. I will give them £600 million and they can give the consumer £50 back.” He repeatedly referred to the most vulnerable consumers. Many of those in my constituency are forced to use expensive prepayment cards; what is the Secretary of State doing to protect them?
Oral Answers to Questions
Debate between Fiona O'Donnell and Ed Davey
Mr Davey
We have a whole range of measures. For a start, the warm home discount helps more than 2 million low-income people, including 1 million of the poorest pensioners, by taking £130 off their bill directly. Schemes such as collective switching mean that we are helping people club together to exercise power in the market to get better rates. The simplification of tariffs proposed by Ofgem will mean greater competition and choice for people. We have a whole range of measures. On energy efficiency, the energy company obligation, through the affordable warmth and carbon saving communities schemes, is helping people in fuel poverty.
Fiona O'Donnell
The Secretary of State clearly thinks he is doing a great job on fuel poverty. In which case, why does his own Department’s public attitudes survey show that concern about energy bills has risen from 49% last year to 59% this year? Is not this another example of a Government who are out of touch with ordinary people?
Oral Answers to Questions
Debate between Fiona O'Donnell and Ed Davey(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Fiona O'Donnell (East Lothian) (Lab)
The Minister will be aware that those who work with children and vulnerable adults can play a vital role in their protection. What is he doing to ensure that new employees, who often see problems with established bad practice, are protected if they decide to become whistleblowers?
Late Payments (SMEs)
Debate between Fiona O'Donnell and Ed Davey(12 years, 8 months ago)
Westminster HallRead Full debate Read Hansard Text
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Fiona O'Donnell
Some of the most vital SMEs in all our constituencies are local post offices—I have debated this issue with the Minister before—and they depend on the Government for their health. Has the Minister carried out any assessment of the weakening of the requirements on Government Departments on local post offices?
Mr Davey
I must confess to the hon. Lady that I myself have not made any assessment of Government Departments in relation to local post offices. I will see whether my Department or Post Office Ltd have made that assessment. If Post Office Ltd has made that assessment, I am sure that it will want to share the information with her.
The hon. Lady said earlier that the Government should work with the devolved Administrations on this issue. The whole of government—whether it is the devolved Administrations, local authorities or even parties working on a cross-party basis—needs to send out a clear signal that we want companies to pay their bills on time. That would make an important contribution towards ensuring that this economic recovery is as strong as possible.
There is an important point that was not made as often as other points during the debate, but it is none the less important to stress, which is the need to improve the way that companies manage their invoices. Obviously, many companies manage their invoices well, but some companies create the problem of late payment for themselves. Better management of invoices is something that we should emphasise. We believe that more than half of all UK business transactions take place with no pre-agreed payment terms, which is astonishing. Barclays has done some analysis in this area and its data suggest that only one in 10 suppliers regularly credit-checks their customers. Clearly, companies themselves need to do some work.
Under the previous Government, my Department undertook some research with Experian to look at payment of invoices to suppliers by four large FTSE 100 businesses. The total value of the sample invoices was more than £1 billion. There was no evidence at all of systemic late payment by those four companies. Typically larger companies in the UK have moved to electronic purchasing and invoicing, which means that late payment is no longer an option for them. I am not saying that there is not a problem with smaller companies; clearly there is, and we have heard contributions to the debate that show there is. However, it is worth putting on record that electronic payment systems in some of the largest companies are beginning to change things.
That research, which was carried out under the previous Government, identified clear evidence of poor invoicing by some suppliers. By that, I mean that invoices were completed incorrectly or submitted late. Consequently, data on payment across the UK economy are generally flawed, because of a single factor—due dates for payment are collected using the date provided on supplier invoices and more often than not those invoices reflect the terms assumed by the suppliers rather than the terms assumed by or contractually defined by the customer. So, there can be confusion about how that type of payment operates in practice.
That is why we see the average time for payment in the UK economy coming out at around 16 days beyond agreed terms. What typically happens is that suppliers assume a 30-day payment period, while the period adopted by the majority of larger businesses is 30 days net monthly; that is, 30 days from the end of the month in which the invoice is received. So we need to work really hard to ensure that suppliers have the information support that they need to manage their customer relationships and cash flow. Work is being done to try to help suppliers not only by the Department but by outside organisations. For example, since 2010 there have been more than 250,000 downloads of the simple checklists developed by the Institute of Credit Management to help suppliers manage customer relationships.
Inevitably, legislation was discussed during the debate. As I mentioned earlier, the UK was one of the first countries to introduce legislation setting out the rights of a supplier to agree payment terms and to secure payment. When we consider what other legislation might be introduced, I must point out that the majority of business bodies oppose any strengthening of the current legislation. Partly that is because many suppliers have long-standing relationships with their customers and—as has been mentioned—they are unlikely ever to resort to legal action to chase up payment from those customers. Where suppliers seek to use legislation to secure payment, weak invoicing means that all too often the courts are unable to intervene meaningfully. It is not that the courts are unwilling to intervene to enforce the law. Instead, when these matters have been examined, it has emerged that sometimes it was the supplier that failed to invoice the customer properly.
That is not to say that I do not see legislation as being entirely unimportant for setting the environment in this area. I encourage suppliers to set out their invoices with the agreed payment terms, stating very clearly the fee that will accrue if payment is not made by the due date. That is what the hon. Member for Streatham (Mr Umunna) was advising his clients to do when he was in the legal profession. It is very important that these contracts are set out clearly. If they are not set out clearly, suppliers have no chance of using the legislation, whatever it might be.
There was a question about the European legislation on late payments. Actually, UK legislation on late payments has played a really important part in shaping the EU legislation, and the recently revised EU directive on late payment very much mirrors UK practice. Because the revised EU legislation follows UK practice so closely, we are seeking advice on whether it will entail any changes whatsoever to existing UK legislation.
Postal Services Bill
Debate between Fiona O'Donnell and Ed Davey
Mr Davey
The hon. Lady is right—and we have been clear about this—that the network must be viable before going to mutualisation. The problem is that we inherited a post office network that was so badly managed that we had to turn it round. She asks for specific details, but she knows that several were set out in our November policy statement. She ought to know that the National Federation of SubPostmasters welcomed the start of the pilot scheme offering document verification for pension applications in 106 post offices in the north-east. She should also know that that is only the first of three planned pilots with the Department for Work and Pensions; the other two involve national insurance applications and testing the impact of requiring jobseekers who sign on by post to attend their local post office instead. I would have thought that she would have welcomed such pilots.
Fiona O'Donnell
I note that the Minister missed the green giro off that list. The position not only puts the post office network in my constituency at risk, but means that people who cannot access a PayPoint in their villages must travel to cash their cheques.
Mr Davey
I expressed my disappointment that Post Office Ltd did not win that contract from the Department for Work and Pensions, but I have described three pilots on which the DWP is working with Post Office Ltd. I could also have talked about the proposals on credit unions that we hope will go forward, or the fact that Post Office Ltd has won a contract with the London boroughs so that local authority staff can have an authentication service at the local post office. If that scheme develops, it might have applications throughout the country. Such developments have been welcomed by the National Federation of SubPostmasters, but of course we want to go further, which is why we are so pleased to have persuaded the Royal Bank of Scotland to enable its customers to access their bank accounts through the post office network, which we believe will start to happen from September. I would have thought that the hon. Lady would welcome such developments.
Mr Davey
I certainly would not—but when Labour Members make such points they really have a cheek, because their Government removed more than £300 million of Government services from the post office network. We are working hard across the Government to ensure that we can position Post Office Ltd in a place from which it can win contracts from Government Departments in Whitehall and local authorities to deliver the front office of government. I can tell the hon. Gentleman that a huge amount of work is being done on this, and he needs to be a little patient.
The problem is that when we came into government and developed the strategy, the cupboard was bare because the previous Government had done almost nothing. They had allowed the post office network and the process for developing new business to wither on the vine because they were so busy closing 7,000 post offices. I have to tell Opposition Members that the tender for the green giro began under the previous Government, so they really ought to be careful. We have had to deal with the tender that Labour Ministers wrote.
Fiona O'Donnell
The Minister will no doubt want to read the piece of paper that has just arrived in front of him, but perhaps I should read him what the National Federation of SubPostmasters actually said:
“The government’s decision not to award the new contract for benefit cheques to the Post Office does not bode well.”
It seems to me that competence in the Government is not as high as he—