Energy Price Freeze

Rehman Chishti Excerpts

Wednesday 6th November 2013 Commons Chamber

[Mr Davey]

I will make some progress and then I will let my hon. Friend in.

Labour’s price freeze is a con. It damages competition and, as we have heard, it damages investment. That contrasts with what the Government are offering, which is direct help to the poorest in society, radical energy efficiency programmes, and a focus on competition that the Labour party never had. That direct help, the warm home discount—£135 off the bills of 2 million of the poorest people—was never offered by the Labour party. We are taking forward the winter fuel payment and we have tripled the cold weather payment. That is direct help to the poorest people, and we are proud of that.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Will the Secretary of State give way?

[Mr Davey]

I will make some progress and then I will give way.

On energy efficiency, the energy company obligation—which the hon. Member for Brighton, Pavilion said is not working—has already helped 216,000 households this year alone, and we expect many more people to benefit from that by the end of the year. I have explained how well the green deal is going with 85,000 assessments already made.

When the Government talk about switching, the Labour party pooh-pooh it, saying, “That’s not the way to do it. Switching isn’t so important.” However, let us look at the facts on switching. uSwitch shows that, between 1 November 2012 and 31 April 2013, people who switched any supplier for both gas and electricity saved an average of £294, which is far more than they would save from the energy freeze offered by Labour.

--- Later in debate ---

[Mr Davey]

I am going to make some progress. I have given way a lot and will not give way for a while yet.

On Labour’s pool and ring-fencing proposals, the Government contrast the policies of the right hon. Lady with our policies for greater transparency in the financial accounts of the big six and for Ofgem’s wholesale market reform “Secure and Promote”. Interestingly, when I asked her whether she had read that document, she said that she had not—[Interruption.] To be fair, let me correct the record: she did not answer the question. If she has read it, she can come to the Dispatch Box and tell us. She is not coming to the Dispatch Box, so we know that she has not read the document. Let me help the right hon. Lady. It would have been beneficial for the Opposition to have read the documents. They claim that Ofgem is appalling and is not doing any work on competition, but the document shows that it has done so.

Interestingly, the reason for the work is given at the beginning of the document. Ofgem produced the document because it wants to make more competitive markets to help the consumer. The right hon. Lady has not read the document. That is not very good. It is clear from her policies that she has not done so.

[Rehman Chishti]

Will the Secretary of State give way?

[Mr Davey]

No, I am not giving way.

The right hon. Lady talked about the pool and the exchange on which the electricity will be traded, but she has not noticed that the day-ahead market in Great Britain has boomed under this Government. In 2011, just 5% of final Great Britain demand for power was traded on the day-ahead exchange. In the past six months, more than 50% was traded. We have seen a big increase, but she did not even bother to mention it.

--- Later in debate ---

[Mr Davey]

The hon. Gentleman cannot have been listening to the debate. It is clear that it is the Government who are standing up to vested interests, because we are bringing in competition against Labour’s big six. The problem for the Opposition is that they created the big six: we are the ones putting pressure on the big six.

[Rehman Chishti]

The Secretary of State will have heard the shadow Secretary of State say earlier that Ofgem is not fit for purpose. But when the Leader of the Opposition was Secretary of State for Energy and Climate Change, he said that Ofgem was fit for purpose. Does that not clearly show that the Opposition have no consistency, no vision and no strategy on these matters?

[Mr Davey]

My hon. Friend has been incredibly helpful because he anticipates what I am about to say about the third part of Labour’s policy package. It would abolish Ofgem, which it created and which the Leader of the Opposition reformed. It will replace it with Ofgem 2—a tough, new regulator. It is such a charade we could hardly make it up. We have been reforming Ofgem. We have given it powers that the right hon. Lady’s party failed to do in government. For example, if an energy company is found to have maltreated a customer the fines will go to the customer, not to the Chancellor of the Exchequer. That is one example of the new powers.

We have a new regime in the Energy Bill, with a strategy, policy and statement to make sure that Ofgem is doing the job that this House and the Government want, and we have now got new leadership at Ofgem. I look at the record—we are now tackling competition issues in the retail market and the wholesale market. It is true that under the last Government Ofgem was not as powerful or active as it should have been: we have reformed that.

We have gone further than that by now proposing to consult on criminal sanctions for manipulation of the energy markets. We are increasing the robustness of the regime by having an annual competition test. We have shown that we are not complacent. Although we have taken major measures to improve competition in the markets that we inherited, we want to go further year after year, because we believe in competition even though the Opposition do not.

--- Later in debate ---

[Mr Hood]

I have been in this House a while now, and I have seen policies from both sides. There is too keen an opinion about being anti-coal. I know that the hon. Member for Brighton, Pavilion (Caroline Lucas) and the green movement, and some coalition Members, are anti-coal, but it is a fact of life that our energy would be a lot cheaper today if we had not closed down the Scottish mining industry. I attended an Adjournment debate today called by my hon. Friend the Member for Mansfield (Sir Alan Meale), in which he described how the few miners that are left had been deprived of their concessionary fuel. He talked about how pensioners, widows and disabled miners had lost out on their pension rights. This is all because there is no mining industry to support our people in retirement. That is quite shameful.

Since 2011, the cost of energy has risen at an average rate of 1.6% a year, but the big six have increased prices by an average of 10.4% a year. I have listened to those who defend that situation, including the Secretary of State, who was so illiberal that it was untrue. He was more Osborne-ite than Lib Dem. I also listened to the hon. Member for Wealden (Charles Hendry). They seem to justify not freezing energy prices and not correcting the rigged market because to do so would interfere with investment. If those who are taking us for a ride by rigging the markets are saying, “If you stop me rigging the market, I will not invest,” my response would be that Governments have to govern. We cannot be held hostage by those monopolies. The situation in Scotland in recent weeks, in which the Government were being held to ransom, should worry us all.

The truth is that my constituents are hurting, as are yours, Madam Deputy Speaker, and we need a Government who are on their side, not one who make excuses, support the bosses and the privileged few, reward the wealthy and punish the poor. That is not what this Parliament should be doing.

I am getting nostalgic as I recall another one of my favourite quotes—that it is “the duty of government to seek to improve the quality and standard of life of its poorest citizen. Any Government that doesn’t do that is immoral”. We need to revisit that quote. Everything we do in this place should be driven not by the need to punish the poor for their poverty, but by the need to help them and lift them out of their poverty. When Governments and Parliaments fail at doing that, it has to be examined.

[Rehman Chishti]

The hon. Gentleman provided a quote on how not helping the poor is immoral, and I agree with him; of course that is right. If, however, we look at what happened to fuel poverty under the previous Government, we find that it went up by 50% in the last five years of that Administration—from 2.5 million to 4.7 million people. Does the hon. Gentleman agree with me, therefore, that the conduct of the previous Government was immoral?

[Mr Hood]

I could give the hon. Gentleman the obvious answer, but I will give him the polite answer. I do not welcome comments like that from Government Members when they are three years into their own government but always want to talk about the previous Government, especially when prices have been rigged, increases have been imposed on working people and the poor have been punished. All I hear is a young ambitious Conservative Back Bencher who wants to get on to the Front Bench by talking about what happened years or generations ago. I invite the hon. Gentleman and his hon. and right hon. Friends to consider what I said earlier: it is his duty, my duty and our duty to seek to improve the quality of life of our poorest citizens. We are not doing that. When the Labour leader talks about freezing prices and sorting out this rigged market, it might not be a panacea, but it is a good start.