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Energy Costs

Volume 571: debated on Thursday 28 November 2013

The Government are providing help to consumers with energy bills in three basic ways: through direct financial support, with energy efficiency initiatives, and by boosting competition. In 2012-13, with the winter fuel payment, with the warm home discount, and with cold weather payments, the Government spent over £2.5 billion on direct subsidies to reduce bills. With the energy company obligation and the green deal, we are helping consumers to reduce bills permanently. Along with Ofgem, our policies in the retail and wholesale markets are intensifying competition to help consumers reduce their bills this winter and every winter.

Does my right hon. Friend agree that what the people of Redditch want are fair and firm energy policies, in the realisation that no Government can fix international oil and gas prices, despite what they are being told locally by the Opposition?

The hon. Lady is absolutely right. It is a complete con to pretend that fixing prices is going to help with bills, because no Government proposing or implementing that could fix the prices before or after the freeze period. The price freeze offered by the Opposition is not just a con but would not work.

Small businesses are important customers, and many have had huge energy price rises. They do not have the opportunity to switch easily; they do not even have a comparison website in order to look at what at other companies are offering. What are the Government going to do about this? Will they look seriously at helping small businesses with very poor margins, many of which are going under because they cannot afford energy costs?

The hon. Gentleman raises an important point. We have been working very hard on this with No. 10 and with small business organisations and looking at the real issues—for example, the automatic roll-overs that cause so many problems. We are gaining agreements with the industry to stamp out these bad practices and to help small businesses.

A quarter of our energy needs were once met by nuclear power, but that is no longer the case because six of the reactors that closed down under Labour Governments were not replaced. Does the Secretary of State agree that it would be fair to say that energy bills are tougher to control because we are now over-reliant on imported fuel sources in order to make sure that our generators are fuelled?

My hon. Friend is absolutely right. The main reason people’s fuel bills have gone up over the past few years is that there has been a huge increase in wholesale gas prices, which accounts for 60% of the increase in people’s bills. We are becoming more dependent on imports of gas, and that is partly to do with the fact that the previous Government failed to make the essential investments that this country needs.

I know that the Secretary of State will share the whole House’s concern about the number of excess winter deaths last year, and it is revealing that 80% were among the over-75s. On 12 January 2012, Labour tabled a motion calling for the energy companies to put all those over 75 on the cheapest tariff, but sadly the Government opposed it. Given that the evidence clearly shows that the over-75s are least likely to be on the lowest tariff, most likely to live in poorly insulated properties and most vulnerable to the cold weather, will he reconsider and make the energy companies put all those over 75 on the cheapest tariff in time for winter?

Of course the excess winter deaths figures are disturbing. I think that every Member and every party in this House is committed to tackling this, not least because it is a problem that every Government have faced. The solution lies in a combination of policies—health policies, social care policies, housing policies and energy policies. That is why our fuel poverty strategy, which we will publish early in the new year, is a cross-Government attempt to make sure that we are tackling the real problem. I am afraid that once again the right hon. Lady is offering a simplistic solution, and she forgets that this Government have already acted with Ofgem to make sure that everyone is put on the lowest available tariff.

To be very clear, our policy is about putting all those over 75 on to the cheapest tariff regardless of how they pay and regardless of whether they are online, which is one of the factors preventing them from getting the cheapest tariff. The Secretary of State’s policy does not affect 90% of people and will still leave those over 75 who are not online and do not pay by direct debit paying more than other people. I remind him that in his own constituency nearly 8,000 people over 75 would save up to £200 as a result of our policy. For those people, and for 4 million like them around the country, why will he not make the energy companies put them on the cheapest tariff and refocus the ECO budget on those living in fuel poverty?

Because we are doing more for the elderly. This Government brought in the warm home discount, which is taking £135 off the bills of the poorest pensioners. That is real action, taking money directly off their bills. We will certainly take no lectures from the right hon. Lady.

My right hon. Friend will be aware that consumers pay £60 extra on their energy bills because of VAT rates. Will he seek to renegotiate our VAT with the European Union so that we can get control over it and cut our energy bills?

My hon. Friend gives me too much credit, because I am not in charge of VAT. I am sure my right hon. Friend the Chancellor of the Exchequer will listen to what my hon. Friend says, but he sets even the Chancellor a tall order by wanting him to renegotiate the sixth VAT directive.