Stephen Mosley
Main Page: Stephen Mosley (Conservative - City of Chester)
Caroline Flint (Don Valley) (Lab)
I beg to move,
That this House welcomes the decision to refer the energy market to the Competition and Markets Authority (CMA) for investigation; believes that this confirms that the energy market is broken; notes that this investigation could take up to 18 months and will not report until late 2015; further notes the decision by Scottish and Southern Energy to freeze electricity and gas prices until 2016; further believes that all households and businesses should be protected from any more unfair price rises while the CMA investigation is ongoing; and calls on the Government to freeze electricity and gas prices whilst the energy market is reformed to improve transparency, competition and accountability.
Last week, the House had a brief opportunity to debate the decision to refer the energy market for a full market investigation by the Competition and Markets Authority. That decision was confirmation, if ever it was needed, that Britain’s energy market is broken and that radical action is required. If it helps get to the bottom of exactly what has gone wrong with the market and goes some way towards restoring consumers’ trust, it is to be welcomed.
However, Ministers should be honest with the House today that a market investigation alone offers little comfort to consumers who are struggling now, because it leaves them in the bizarre position of being told that competition in the market is not working and the prices that they pay are not fair, but that nothing will be done about it for two years. First, Ofgem has to consult on whether it should refer the energy market to the CMA. That will take two months. It will then have to consider all the responses and publish a final decision. That could take another month. Only then, which is likely to be the end of June at the very earliest, will Ofgem refer the matter formally to the CMA. The CMA investigation will then begin and that could take another 18 months.
Today, therefore, I present to the House a simple motion with a simple proposal: while the investigation is ongoing, and while the energy market is being reformed, consumers should be protected from any more unfair price rises—not a voluntary price freeze by one company that benefits only some customers, but a price freeze for all households and small businesses.
Time after time we have seen that voluntary approaches do not work. Consider the way that companies failed to pass on reductions in wholesale costs, and the way they sat on hundreds of millions of pounds of direct debit overpayments. Those companies have only ever changed their behaviour when forced to do so, and the Government should learn the lessons of those experiences and intervene to require all suppliers to freeze their prices. As we have said many times before, that would not prevent companies from cutting prices, but it would stop them from increasing them. The Government have the power to do that, and if they did so they would have our support. Although SSE’s decision to freeze its prices until 2016 may not go far enough and may exclude small businesses, it is clear evidence from within the industry that a price freeze is possible.
Stephen Mosley (City of Chester) (Con)
The right hon. Lady says that she supports a price freeze, but the Government have announced a £50 cut to energy bills. Would Labour reverse that?
Caroline Flint
I am afraid that despite the Government’s tampering, bills have gone up by an average of £60. Furthermore, as a result of the Government’s tinkering, according to their impact assessment some 400,000 homes will not receive energy insulation. That is not something to stand up and crow about.
Hon. Members may recall that there were those who said that a price freeze was unworkable and impossible to deliver. It is not normally in my nature to name and shame people when their arguments have been well and truly demolished—[Hon. Members: “Go on!”] Okay. On this occasion, in the interests of openness and transparency, I am obliged to remind the House of what the Secretary of State said. This is the man who told the House last week:
“We have never said that the big six could not have a price freeze.”,—[Official Report, 27 March 2014; Vol. 578, c. 479.]
However, on the day my right hon. Friend the Leader of the Opposition made his speech to the Labour party conference, the Secretary of State said:
“Fixing prices in this way risks blackouts, jeopardises jobs and puts investment in clean, green technology in doubt”.
Last week, he said that SSE’s decision to fix prices was “good news”. He added:
“Let’s hope”
—I emphasise hope—
“some of the other companies now follow.”
It may be in the Secretary of State’s nature to follow, but it is in mine to lead. If he wants energy companies to freeze their prices, as he told the public last week, he should not wait for them: he should do it now.
I take the security of our energy supply seriously. That is why the collapse in investment under this Government is so worrying and why there has been so much concern about the length of time it took to get contracts for difference in place, and how long it is still taking to get the capacity market up and running—policies we have supported. That is why in government we will establish a dedicated energy security board. However, a Labour Government will not be held to ransom, and neither must the Secretary of State.