Energy Bill

John Robertson Excerpts

Wednesday 19th December 2012 Commons Chamber

[John Robertson (Glasgow North West) (Lab)]

I congratulate the Chairman of my Select Committee, the hon. Member for South Suffolk (Mr Yeo), on his contribution. I believe that our Select Committee has been more than diligent in calling the Government to account. Unfortunately, the Government have not exactly been forthcoming in giving us the information that we require. We deliberated on the Bill some time ago and had five weeks of pre-legislative scrutiny. That is roughly seven weeks shorter than the time in which anybody else has ever been asked to do pre-legislative scrutiny. As such, it put us under a great deal of pressure.

We are told that the Government will table a number of amendments to the Bill. I appreciate that this is a very technical Bill and that the Government are not sharp enough to fill in the details. The Minister was right that the Bill was long in the making. We expected to get it some time last year for our scrutiny. The Government have had plenty of time to put together what they require, but—here we go again—they are going to table a load of amendments that Members in this Chamber will not be able to scrutinise or talk about. That is not good enough. I believe that, as the elected Chamber, we should be able to scrutinise, ask questions and get answers. I do not believe that we are getting the answers.

We have to look at the Bill in general terms. In the short time that I have, I want to talk about my pet subject: the consumer—the person who has to pay the bill—and what we are going to do to help them. I do not believe that the consumer is getting a good deal in this day and age. In fact, they are getting a deplorable deal. The Government are part of the problem because in Ofgem they do not have a body that helps them by setting out where they can call the companies to account.

Will the Secretary of State consider whether some form of windfall tax could be written into the Bill? The Labour party would be happy to table an amendment for such a tax, based on excessive profits. I believe that at a time of austerity, energy companies—particularly the big six—should not be making excessive profits or receiving billions of pounds from the Government to develop other forms of energy without providing a return for that money. The Bill should therefore include a measure that would, perhaps, allow those companies only to make profits that are in line with inflation at this point in time. We could then look at the issue again in a few years’ time. Those companies must be held to account, and the only way to do that is by hitting them in the pocket.

[Sir Robert Smith]

There is a real frustration with the prices people pay and we must ensure that we have the best market possible. We also need huge investment, but that must make a return on its capital. Otherwise, it will go to another country. Does the hon. Gentleman think that his proposal could drive away that investment?

[John Robertson]

I agree to a certain extent with my hon. Friend—I will call him that because we both sit on the Energy and Climate Change Committee, which on this matter is non-party political and we support each other—but energy companies owe it to their customers to try to keep prices down as much as possible at this time. My hon. Friend may remember that the Committee wanted to consider—or, rather, could not consider—the companies’ accounts. Who knows what they make? In many cases they refused to give us information because they did not want their competitors to know what was going on. I am sorry but we need an open and honest industry.

I chair the all-party group on nuclear energy, and I tried to create an industry that was open and honest although it did not have a reputation for that. Energy companies must show their books and let people see what they are doing. The Secretary of State could not tell me what the companies’ profits really are. The companies tell us what they think their profits are, but we can be sure that the information will not be correct and that they will be earning a lot more money than they admit. Multinational companies in other areas do not even pay tax in this country. Are the energy companies paying what they should?

[David Mowat]

I am excited at being given way to, so I thank the hon. Gentleman for that. My point is similar to that of the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith). What return on capital employed would the hon. Gentleman consider reasonable for such an organisation? Does he believe that anything in those companies’ accounts demonstrates that the return on the capital employed that they have been making is unreasonable? What is a reasonable figure?

[John Robertson]

That would be a good question if I knew the turnover of those companies. They say that their turnover is roughly 2%, but I do not think that is correct. We must look in depth at what their profits really are and how much money they actually spend. The money that energy companies receive from the Government to invest in other forms of energy never appears in their accounts; it does not seem to be part of the equation. That money comes not from shareholders or the companies themselves but from a third party: the Government. I want to know exactly what that money is for and what we have had as a return. I have not seen a very good return, and in particular I do not believe that money given to the renewables onshore wind industry provided value for money. It has even been a drawback, because we should have been spending money on experimentation and research and development in other areas. If we had done that, we might be in a better place today.

However, the hon. Member for Warrington South (David Mowat) is right and it is imperative that we get investment. We must show that our industry not only does a good job but can be trusted and is reliable. I do not think the word “trust” can currently be attributed to the big six energy companies and we must look at that.

Ofgem needs to be beefed up, and if it needs to be replaced, we should do that; I know my right hon. Friend the Member for Don Valley (Caroline Flint) would like that. I am not against the idea, but those jobs in Glasgow are important to my constituency and others in the area and I would like to keep them. I would also like to give Ofgem staff the power to do something—to get out there and threaten those companies—but they cannot currently push people about.

The companies have put prices up three times in the past two years, which is ridiculous, and they want to put them up further. The main debates in Committee will be on how much the strike price will be and what contracts for difference will mean to companies, but the dearer things get, the more they will cost the general public. We do not do enough for the customer, and, as the Secretary of State knows, I believe we do not do an awful lot for the people who cannot help themselves—those who do not have access to computers and cheque accounts. We must see how we can help them.

In my short speech, I have covered a lot of matters. I will support the Bill and look forward to being in opposition again with the Secretary of State.