Energy Company Licence Revocation

Nic Dakin Excerpts

Wednesday 3rd September 2014 Commons Chamber

[Caroline Flint]

I think there has been quite a lot of publicity about the fines, but what the hon. Gentleman says is interesting. The rules currently allow Ofgem to fine up to 10% of the company’s global turnover, which is a lot of money. I am not against Ofgem looking at whether it should be increasing the amount it fines, but I do think the ultimate sanction is about revoking a licence, because in such circumstances customers would have to be found a new supplier for their energy. Currently, that is exactly what Ofgem can do if a company goes into administration or if it fails to deliver gas and electricity to people’s homes. Is it not bizarre, however, that it cannot do this where there have been repeated offences against consumers through harmful customer practices that not only undermine trust in the energy market but, more important, make customers pay a heavy price?

[Nic Dakin (Scunthorpe) (Lab)]

I commend my right hon. Friend for her leadership on this issue, because that is what this is about: leadership in shaping the future, not looking back to the past, as such an approach is failing our business and domestic energy customers. I commend her for the way in which she has set out this case so clearly, and I am looking forward to the answer from the Secretary of State.

[Caroline Flint]

I thank my hon. Friend for his support on so many occasions when we have tried to put forward common-sense, constructive solutions to some of the problems that all in this House know exist in this energy market. Some will wrongly try to characterise our proposal as somehow anti-business—it is not. For one thing, businesses, especially small firms, have often been as much on the receiving end of the energy industry’s sharp practices as households. For another thing, if energy companies do not want to be at risk of losing their licences, all they have to do is treat their customers fairly and properly. More importantly, there is no such thing as a market without rules. It is difficult to think of a more vigorously free-market capitalist economy than the United States, but regulators there understand that a free market works only when there are proper rules to ensure competition and fair play. As Matthew D’Ancona said recently in his article in The Sunday Telegraph, capitalism must be

“tempered by the recognition that markets exist within a structure of laws and a social order.”

That is what I want for households and businesses in Britain.