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Energy Bills

Volume 568: debated on Thursday 17 October 2013

With your permission, Mr Speaker, I would like to group this question with several others.

I am taking many steps to help, which come under three broad categories—

Order. I think the Secretary of State is seeking to group this question with Questions 6 and 18. I understand the concept of the broad brush, but it can be taken a bit far. We need greater specificity.

As always, I am very grateful for your advice, Mr Speaker, as I am sure the House is, too.

I will start again. I am taking many steps to help households with their energy bills. Those steps come under three broad categories: first, direct help for millions of people, with money off their bills and money to help to pay their bills, through the warm home discount, winter fuel payments and cold weather payments; secondly, energy efficiency, to help people to cut their bills by wasting less energy, through the energy company obligation, the green deal and smart meters; and thirdly, competition. I am intervening to make electricity and gas markets in the UK ever more competitive, so that energy companies cannot exploit people through market power.

Of course I am disappointed by energy companies that are putting up their prices. The key thing is competition, and we in this Government have pushed competition hard. The big six were the creation of the last Government, when we saw the number of companies reduced. Under this Government, competition is increasing. I would urge people who are disappointed by increases from their energy company to shop around and switch, because there are some very good deals out there.

Last week the Prime Minister said that Labour had definitely “struck a chord” on energy prices and that

“There’s a certain amount you can do freezing prices,”

so will the Minister freeze prices, which will benefit more than 47,000 households in my constituency?

The hon. Lady was obviously not at Prime Minister’s questions yesterday, because the Prime Minister called it a con, and he is right. Labour’s energy price freeze is a con. Let me explain to the Opposition why it is a con, because when people see a politician promising something for nothing, they do not believe them. The policy cannot control prices before Labour’s price freeze and it cannot control prices after it, so energy companies are likely to hike prices before and after. Consumers will be worse off as a result of such a measure.

Energy bills have already risen by £300 and are set to increase by perhaps another £100 this year. In my constituency, more than 36,000 people would benefit if the Government took action to freeze bills this year, which could save up to £120 per household. Why will the Government not stop defending the big six companies and other companies, and get on the side of the consumers and help them out this winter?

We are on the side of the consumer, because we are promoting competition. The hon. Gentleman and his party, through their price freeze, will hurt competition. Let me explain it to him. Whereas we have seen companies entering the market under this Government, a price freeze would hurt small suppliers. If he doubts my word, he should listen to the small suppliers themselves. Nigel Cornwall, of the Energy Suppliers Forum, says that Labour’s policy

“ignores real progress made in increasing competition in the market over recent years”.

Small suppliers do not like Labour’s policy because they know it would hurt consumers.

Does my right hon. Friend agree that nobody suffers more than consumers in rural areas that are off grid? The ECO system was supposed to ensure that 15% of the funding went to upgrade hard-to-reach homes in rural areas, but the evidence on the ground is that the big six are unwilling to assist with supplying new oil-fired liquefied petroleum gas boilers. Given that energy bills are more than 50% higher in off-grid areas, will he raise the issue with the energy companies and ensure that all households can receive help?

My hon. Friend raises an interesting question. Almost all aspects of the energy company obligation are working well, but the rural sub-obligation—the bit he is referring to—is not working so well, and we are looking at how it can be improved.

The Opposition want to have their cake and eat it. They say they want to decarbonise the energy market, yet they also say they do not want people to pay for it. Can my right hon. Friend bring some reality and honesty to the argument and tell us how we decarbonise the economy while at the same time trying to keep costs to consumers to a minimum?

My hon. Friend is absolutely right. The Energy Bill and electricity market reform do just that. He may be interested to know that we have today asked the Leader of the Opposition 10 questions about Labour’s policy. If we look at it, we not only find that it is a con that will reduce competition and hurt the small suppliers, but that it will hurt investment, too, which is needed to keep energy security and to decarbonise. Labour’s policy is economically illiterate.

SSE’s 8.2% average price increase—we should remember that some people have to pay more than that—is unacceptable when the company is boasting on its website about the large dividends it pays out to its shareholders every year. I see competition as the answer. Will my right hon. Friend tell my constituents what concrete steps are being taken to improve competition and when they will be able to have a much wider choice than they have at the moment?

My hon. Friend is absolutely right. When big energy companies make these high price rises, I would urge all their customers to look at the competition available. There is a lot of choice out there. In fact, there is far more choice than there has been for a long time—possibly ever. The last Government killed choice and reduced competition; under this Government, we have seen a big increase.

Let me tell the Secretary of State that if Labour is elected, our price freeze will happen, and if companies collude to increase prices beforehand, we will take action. The right hon. Gentleman is the one in government, so if companies try to hike up their prices beyond anything that can be justified before 2015, will he stop them—yes or no?

We will help customers to get the best deals. The right hon. Lady knows that. She knows that on the current market, customers can get much better deals than those offered by the big six. She knows that the number of small suppliers has increased. She knows that in 2011 there were no independent suppliers with more than 50,000 customers. Thanks to our policies, there are now three with more than 100,000 and a further seven companies have entered the market in the last two years. That is the choice; that is the solution: people can cut their bills significantly by changing supplier.

There you have it, Mr Speaker: every single time, this Government put the energy companies before consumers. According to figures from the House of Commons Library, energy prices are rising three times faster under this Government than under the last Labour Government. Our price freeze will save money for 27 million households and 2.4 million businesses while we reset the market. It is the right hon. Gentleman’s policy that is a con; he says everyone will be put on the cheapest tariff, but is it not a fact that 90% of people will see no benefit from his policy at all?

Millions are seeing benefits from our policy of competition. The right hon. Lady has made a very interesting point today. In response to our charge that Labour’s policy is a con, because energy companies could push up bills beforehand and after, she said that Labour would take action if they do. Does that mean that she is going to introduce full price regulation? Is Labour now promising that, because that is the implication of what she said?