Skip to main content

UK Energy Market

Volume 568: debated on Thursday 17 October 2013

I keep the competitiveness of the UK energy market under constant review and have acted to make it more competitive. In retail markets, where companies are supplying customers, we have acted by deregulating to increase the number of suppliers and by reforming bills and tariffs. In wholesale markets, where companies are selling power they are generating to suppliers, Ofgem measures and measures in the Energy Bill will boost competition and market access for independent generators across the UK.

Npower told my constituent Alan Gowers, a pensioner, that his tariff was ending and his new one would be 50% more expensive. SSE estimated that my spend would go up by 10% and so it tripled my direct debits. I have worked in competition regulation for six years and I can tell the Secretary of State that this is not a competitive market. When a market is not functioning—when it is fuelling a cost of living crisis—do a Government who stand up for people not intervene?

We are intervening, because the market we inherited from the previous Government was not as competitive as it should have been. Before Labour’s previous energy market reforms, there were three generators and 14 suppliers—17 companies—but after those reforms the number went down to six, so Labour reduced competition. Labour is the party of the big six. This coalition Government have acted to make sure that we have competition to take on the big six, so the hon. Lady should speak to her Front Benchers because Labour is the party of non-competitive energy markets—the party of the big six—whereas our coalition Government are taking on the big six.

As part of the competition assessment, the Secretary of State could do worse than visit the workers at Ineos at Grangemouth, who supply the energy needs for the whole of Scotland and, indeed, the north of England, and whose jobs are now under threat from a belligerent employer that has walked away from talks with the trade unions and, more seriously, is now demanding taxpayers’ money in order to invest in the company.

I am grateful for the hon. Gentleman’s question. I hope he will be reassured by the fact that I have spoken personally both to key Unite trade union leaders and to Ineos. We persuaded them to go into ACAS talks. I regret that those talks have broken down, but I urge both parties to resume them and try to resolve this situation without industrial dispute. May I take this opportunity to say that, working with the Scottish Government and industry, we have done everything we can to make sure that if there is a dispute, the fuel will flow through Scotland’s economy?

My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) gave two of the many examples that hon. Members could give of how the retail energy market is not working in the interests of households or businesses. Ensuring that all power trading is on an open exchange and stopping companies selling power to themselves at secret prices, as we are proposing, will reset the market, encourage other entrants and ensure that people know why they are paying what they are paying. Will the Minister confirm the speculation in The Times at the weekend that his Government will shortly perform a welcome U-turn and adopt our proposal to introduce a pool that will bring clarity, fairness and transparency to the UK retail energy market?

No, we will not, because we have got a much better policy. Working with Ofgem and in the Energy Bill, as the hon. Gentleman ought to know now, we are tackling the real problem in the wholesale market—a problem that the previous Labour Government completely failed to deal with. Interestingly, Labour’s new policy reverses the policy that Labour implemented in government —talk about confused; never have an Opposition been so confused in their policies.