House of Commons
Wednesday 2 April 2014
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
1. What recent assessment she has made of the security situation in Northern Ireland; and if she will make a statement. (903393)
The threat level in Northern Ireland continues to be severe, with persistent planning and targeting by terrorists. Action by the Police Service of Northern Ireland and its partners maintains a high level of pressure on those groups, with the aim of preventing attacks and collecting the evidence that is needed for convictions.
Given the recent attempts to attack members of the PSNI—including the events that occurred just this weekend in Larne—is the Secretary of State confident that it has all the resources that it needs in order to respond to such incidents, and does she expect members of police forces from Great Britain to undertake a mutual aid operation in Northern Ireland over the summer?
I wholeheartedly condemn the disgraceful scenes that have been witnessed in Larne over recent days. Such thuggish behaviour is absolutely unacceptable, and I know that the PSNI is taking very seriously the need to bring those responsible to justice. As we have discussed during previous sessions of Northern Ireland questions, there is an ongoing debate about police funding for the year 2015-16. The Government have provided additional funds, but it remains to be seen exactly how much the Department of Finance and Personnel will contribute. Discussions continue, and I strongly support the efforts made by the Chief Constable to resolve this important matter with the DFP.
Given that the security situation in Northern Ireland is still difficult, is my right hon. Friend confident that the police will still be able to recruit enough officers immediately to replace those who are retiring from the force?
The police are currently recruiting. They recognise the importance of maintaining numbers at appropriate levels, particularly in the light of wastage rates. It is important for us to resolve the question of 2015-16. The Chief Constable has said that he needs about 7,000 officers to ensure that he can run matters efficiently, and the level is slightly below that at present, so I hope that the future discussions with the DFP will bear fruit, as they have in relation to the security funding agreed by the United Kingdom Government.
Given the recent revelations about recordings made at Garda stations in the Irish Republic of all telephone calls made to and from those stations over a number of years, and given that information was withheld from the Smithwick tribunal that investigated the deaths of police officers Breen and Buchanan, what assessment has the Secretary of State made of those revelations, and of their impact in revealing the level of collusion that may have existed between police in the Republic and the IRA?
I had the opportunity to discuss the matter with the Tánaiste and the Irish Government on Monday, and I was assured that concern about the recording of police conversations, and other matters relating to the Garda, would not undermine the efforts being made in the south to help the PSNI to fight terrorism. A number of inquiries are under way to investigate, in particular, whether the recordings will have any impact on current prosecutions. It is very important that those inquiries establish the facts, and that we ensure that every effort continues to be made to bring terrorists to justice and put them in jail.
In the course of the Secretary of State’s discussions with the authorities in the south, particularly the police, what efforts are being made to step up the battle against fuel launderers? There is grave concern in Northern Ireland, where it is felt—given the number of prosecutions and of people charged—that the battle is not being fought with enough vigour, and that the fact that the National Crime Agency is not operating fully in Northern Ireland is having a detrimental effect.
The National Crime Agency will still be able to be part of the fight against fuel laundering, because it is a reserved matter. The latest development is the announcement of the introduction of a new fuel marker, for which I know the right hon. Gentleman and his DUP colleagues have pressed very strongly, and which is to be produced by the Dow Chemical Company. Work is being done on both sides of the border to strengthen the fight against fuel laundering, and work is also under way on the new marker, which will be much more difficult to remove from fuel.
There were 30 national security attacks in Northern Ireland in 2013. Will my right hon. Friend assure the House that there will be a relentless and effective pursuit of the small but violent minority of people in Northern Ireland who prefer terrorism to democracy?
I can certainly give that assurance. The Government remain absolutely committed to combating terrorism in Northern Ireland and elsewhere. Strong support for the PSNI is vital, which is why we have given it significant extra resources. We also recognise the crucial importance of combating other forms of crime in Northern Ireland, including crime committed by individuals linked to loyalist paramilitaries.
With respect to the latter organisations, does the Secretary of State feel any discomfort about the amount of time that is spent differentiating between parts of the Ulster Defence Association and the Ulster Volunteer Force, as though they were respectively a good organisation and an organisation gone bad? Does she agree that they are illegal organisations that should have long since ceased to exist in any structured form?
Both the UDA and UVF are proscribed organisations, but in relation to recent activities in Larne, and criminal activity in the hon. Lady’s constituency, what the individuals involved are undertaking—however they choose to label themselves—is utterly unacceptable criminal behaviour. I am strongly supportive of the extensive efforts being made by the PSNI to put those people in prison and prevent them from exploiting and seeking to control their communities merely to line their own pockets through organised crime.
The Secretary of State will be well aware that there has been some controversy within Belfast city council about inviting Pope Francis to visit the city. Does the Secretary of State believe that the security situation and, indeed, the political situation in Northern Ireland are conducive to a papal visit any time soon?
The papal visit to London was extremely successful, and I have every confidence that the security situation will make a papal visit to Northern Ireland entirely possible. Whether such an invitation is extended is obviously a matter for the Northern Ireland Executive, but I think it would be a very positive step if the Pope were to visit Northern Ireland.
Cost of Living
I am answering these questions together as, spookily enough, they are identical in every word. The Government continue to take actions to support hard-working households. Following the Budget, 685,000 people in Northern Ireland will have benefited from the personal allowance changes since 2010. Furthermore, drivers, as well as Northern Ireland households using fuel oils for home energy, will benefit from the cancelling of the fuel duty rise planned for September.
Great minds obviously think alike. In North Antrim and South Down 40% of workers are paid less than the living wage, and across the Province the levels of part-time workers, particularly women, on poverty pay are shocking. In fair pay fortnight, can the Minister tell the House whether he will offer incentives for firms to pay the living wage, so that we can tackle one of the major causes of this Government’s cost of living crisis in Northern Ireland?
As the hon. Gentleman knows, the greatest reason for the economic crisis in Northern Ireland and elsewhere in the United Kingdom is the appalling economic legacy left us by the previous Government. I am surprised that he does not welcome, for instance, the recently published Northern Ireland Centre for Economic Policy spring outlook predicting that the local economy will grow by 2.8% in 2014 and that over 13,000 new jobs will be created this year in Northern Ireland. That is a fantastic thing to welcome. It is through decent employment that people are lifted out of poverty.
Given that getting a job is the most important element in alleviating cost of living problems, will my right hon. Friend elucidate the measures that the Northern Ireland Office has taken to promote private sector investment so that new firms come into Northern Ireland?
My hon. Friend will know that last June an economic pact was signed by the Northern Ireland Executive and others that looked forward to a rebalanced economy with more private sector jobs. In the last year some 10,000 jobs have been created in the private sector. As I have said, we are expecting another 13,000 this year, and 23,000 new jobs over the next year.[Official Report, 28 April 2014, Vol. 579, c. 10MC.]
I have great sympathy with what the hon. Gentleman says, and I am aware that some 68% of households in Northern Ireland heat their homes with fuel oil, which has gone up dramatically in price in the last few years. Our stop on the fuel escalator will have a decent impact on all those who heat their houses with fuel oil. Of course, we wish to see people doing better and those in poverty helped out of poverty, and that is why we are focusing on economic recovery, as is the hon. Gentleman’s party in the Northern Ireland Executive.
The Minister will know that the Government’s welfare reform proposals, including the caps, will hit hardest of all in Northern Ireland and will cause a severe cost of living crisis for those already struggling most. It is my contention that the universal credit project is unworkable and is falling apart. Does the Minister agree, and should not the project now be abandoned?
If I might say gently to the hon. Lady, no, I do not agree, and nor do the majority of people in the whole of the United Kingdom, including Northern Ireland, agree that we should go on with the hugely increasing burden of benefits on taxpayers. We look forward to the Northern Ireland Assembly making progress on the Welfare Reform Bill in Northern Ireland. If the hon. Lady might say to her colleagues in the Assembly that we should have some progress, the economy and the people of Northern Ireland would look forward to greater prosperity.
Recent figures from the Office for National Statistics show that in terms of both output and pay, Northern Ireland has been the region hardest hit by the recession. One in six workers is on low pay, and the average household has seen a 9% drop in income. What are the Government going to do about the cost of living crisis facing the people of Northern Ireland?
I have already responded on this issue. The hon. Gentleman is rather kind to raise it, given that he was a member of the last Government, who led to the economic crisis that we inherited in 2010. We have done an enormous amount—I have mentioned the economic pact—and the investment conference that my right hon. Friend the Secretary of State hosted in Northern Ireland in October has led to a great deal of further foreign direct investment in Northern Ireland. Indeed, the Northern Ireland Executive is working hard on this issue, and I congratulate them on the work they have done.
The idea that our Government caused the global banking crisis is complete nonsense, given that the Conservatives were calling for deregulation year after year after year.
May I ask the right hon. Gentleman to answer a serious question about Northern Ireland? Political stalemate on welfare reform within Northern Ireland and between the Northern Ireland Executive and the Treasury now poses a real threat to Northern Ireland’s recovery. Is it not time for the Government to take a more active role in seeking an end to this unacceptable stalemate?
I do not think that I blamed the last Government for the international banking crisis; I blamed them for the dire state of the UK economy that we inherited in 2010—quite reasonably, if I might say so.
We are working very hard with the Executive to bring about a better economic situation in Northern Ireland. We want to see the Welfare Reform Bill passed in the Assembly, as indeed do many parties in the Executive. Unfortunately, it is currently bogged down in the Assembly because two parties are unwilling to support it.
I have been working with Northern Ireland’s political leadership to support and encourage progress on flags, parades and the past. It is important to find an agreed way forward on these issues in order to underpin political stability, support economic renewal and overcome community division.
I am fully engaged in trying to make that happen, and I remain optimistic that an agreed way forward can be found. The party leaders continue to meet. The speeches made by the Deputy First Minister and First Minister in Washington on these matters were very clear that both Sinn Fein and the Democratic Unionist party were determined to find a way forward. The on-the-runs crisis has set things back, but I know that the party leaders continue to work. It is a pity that the Ulster Unionist party has pulled out, and I urge it to come back to the table.
Does the Secretary of State accept that if the process begun by Richard Haass is to be brought to a satisfactory conclusion, party leaders and parties in Northern Ireland will require the active hands-on support of both the British and Irish Governments—namely, her good self and the Tánaiste Eamon Gilmore?
They certainly will need the support and encouragement of both Governments. I can assure the House that they very definitely have that, and that was confirmed in my discussions with Tánaiste Eamon Gilmore on Monday. We are committed to this process and we want to see it succeed. If we have learned anything from the events of recent days, it is the importance of a balanced, transparent and accountable process to deal with Northern Ireland’s past.
The Secretary of State referred to the party leaders meeting, and of course they are meeting, with the exception of the Ulster Unionist leader. We should encourage progress in those discussions because many people want to see those issues addressed and resolved so that we can get on and deal not just with the past, but with the present and the future.
The hon. Gentleman is right. Resolving these issues or finding an agreed way forward will enable further efforts and energies to be concentrated on pensions, the economy and so on. There is a real opportunity here. A lot of good work was done under the auspices of Richard Haass and Meghan O’Sullivan, not least by the right hon. Member for Lagan Valley (Mr Donaldson) as part of the negotiations under Richard Haass.
As we are currently advised, structures of the sort proposed by Richard Haass in draft document No. 7 would not need Westminster legislation, apart from a fairly straightforward devolution of responsibilities for parading. Some of the issues are quite complex, and we would work with the Northern Ireland Executive, once there was an agreement, to see whether further legislation might be needed in Westminster.
Does the Secretary of State agree that following the local and European elections and the conclusion of the judge-led inquiry into on-the-runs at the end of May, all Northern Ireland parties should see it as their top priority to reach a speedy agreement on the issues covered by the Haass talks? Three years of elections in Northern Ireland cannot lead to permanent political logjam.
I certainly agree with the shadow Secretary of State. We have a crucial opportunity, which I hope the party leaders will seize. We are on the eve of a new parading season. The next few weeks will be crucial. I very much welcome the fact that the party leaders are continuing their discussions and will do so throughout most of the election period. It is crucial that we find a way forward on these matters and the crisis surrounding OTRs only makes the case more strongly for a solution on the past.
First World War (Irish Soldiers)
The Northern Ireland Office is committed to delivering the Government’s programme for the first world war centenary in Northern Ireland in a manner which promotes reconciliation and contributes to a peaceful, shared future. The Department is also co-ordinating closely with the Irish Government on the centenary and the wider decade of commemorations in Ireland.
Enormous numbers of Irish men from both communities willingly volunteered. That is the key: they willingly volunteered for king and country, and many of them made the ultimate sacrifice. Can the Minister tell the House how he will use the commemorations to bring both communities together in remembrance of their common sacrifice?
My hon. Friend is right. Some 200,000 Irish personnel volunteered to fight in the first world war. It is difficult to tell who was a regular, who was Irish and from the north, or whatever. They were just termed British in those days. Some 49,000 were killed in the first world war and we do commemorate them. As a Government we get on extremely well with the Irish Government. For myself, I laid four wreaths on Armistice day at Islandbridge, Glasnevin and elsewhere—the first time, I think, that a British Minister has done that since partition.
The men of the 36th (Ulster) Division and, indeed, all Irish soldiers were volunteers in the great war. More Victoria Crosses were won by Irish soldiers than by any other section. What will the Secretary of State’s office do to encourage primary schoolchildren in Northern Ireland to learn about the great sacrifice of our volunteers and our soldiers, and the commitment of our men and women in the previous century to our nation?
We are very keen that all children should know of the sacrifice of our forefathers 100 years ago. Education and education policy are devolved, but the right hon. Member for Lagan Valley (Mr Donaldson) is leading on commemoration and is doing an extremely good job. The hon. Gentleman mentions VCs. The first Victoria Cross awarded to a British soldier in the first world war was won by Maurice Dease at the battle of Mons. It was posthumous and he was a Catholic Irishman from Coole in County Westmeath.
Many nationalists from the south served and died in the first world war. My grandfather was from Mayo, and he fought on the Somme. Will the Minister be able to send me precise details of the events taking place in the south to commemorate 1914?
There is a programme of events and, as I have said, the right hon. Member for Lagan Valley is leading on this in Northern Ireland. A ceremony is planned for 4 August in Dublin—probably in St Patrick’s cathedral—which will be followed that evening by a ceremony in St Anne’s cathedral in Belfast. I will send the hon. Gentleman further details.
On Monday, along with other members of the British-Irish Parliamentary Assembly, I had the honour of visiting the war memorial that commemorates the 49,000 Irish who were killed in the first world war. We were ably led by the hon. Member for Tewkesbury (Mr Robertson). Will the Minister congratulate the BIPA on all the work it does, and will he do all he can to ensure that the commemoration in Flanders later this year is a success?
I certainly congratulate the British-Irish Parliamentary Assembly. I also congratulate my hon. Friend the Member for Tewkesbury (Mr Robertson), who laid a wreath at Islandbridge. Islandbridge is a very fitting memorial, designed by Lutyens, which the Queen also visited recently.
Dealing with the Past
I hold regular discussions with representatives of the Northern Ireland political parties on a range of issues, including dealing with Northern Ireland’s past. I continue to encourage party leaders to work towards an agreement on the past which is balanced and can command public support.
I am grateful to the Secretary of State for her reply. Does she think it has become harder to reach a deal on the past as a result of the on-the-runs issue, which was effectively an agreement on partial immunity for people who might be required to tell the truth about various incidents?
The concern caused by the on-the-runs issue, and the fact that the scheme was not dealt with transparently, have set back the progress on dealing with the past. However, the proposals set out in the Haass No. 7 document provide a good basis for further discussions and I welcome the fact that many of the parties have said that they can support that kind of architecture, despite the fact that further issues need to be resolved before an agreement is found.
Does the Secretary of State accept that honesty is essential in dealing with the issues of the past? Does she also agree that it is time for Sinn Fein leaders to face up to their past of murder and destruction, and to apologise to the people of Ulster for their bloody campaign of terror?
I do believe that honesty and transparency are an important means of dealing with the legacy of the past. The UK Government have taken a lead in taking responsibility where the actions of the state have been wrong, and we would expect everyone involved in the troubles to account for the role that they have played.
In order to give lasting peace the best chance, there has to be equity and balance when addressing the past. Given the way in which the on-the-run letters contrast with how some ex-soldiers fear they might be treated, will the Secretary of State look at the ongoing peace process in the round to ensure that there is balance?
Of course it is crucial in all matters relating to Northern Ireland to maintain balance and fairness. I reiterate the assurances I have given the House that the letters issued under the on-the-runs scheme did not amount to an amnesty or to immunity; they were merely a statement of fact as to whether the individual concerned was wanted by the police for arrest at a particular time.
I agree with the Secretary of State’s last answer, and I stress that if we are to find a way of bringing closure to the victims of the most difficult cases that haunt us from the past, that has to be done in an even-handed fashion. It would be wrong, for example, if Bloody Sunday soldiers were prosecuted but loyalist or republican paramilitaries were not.
I emphasise again, as the Prime Minister has done at this Dispatch Box, that this Government do not support amnesties from prosecution for anybody. It is crucial that, whatever arrangements are made in relation to the past in Northern Ireland, they should be balanced and fair to all sides in the community.
12. One aspect of how we deal with the past is the continuing support we give to victims. May I thank the Secretary of State for the support she gave in securing the funding for the Peace Centre in Warrington announced in the Budget? May I also ask her to address the issue of European Union funding being ring-fenced for the island of Ireland, which means that victims on the mainland do not have access to it? (903404)
I thank my hon. Friend for his kind words about my role in securing additional funding for the Warrington Peace Centre. The people there do fantastic work and I am keen to continue working with them. I am, of course, aware of the concerns about the fact that they are not able to access funds which are provided solely for people in Northern Ireland, even when, sadly, there are many victims of terrorism in Great Britain. It is vital that those victims have all the support that they need, and this Government believe that any solution on the past in Northern Ireland must have victims at its centre.
Beyond her exhortations to the parties, has the Secretary of State actually scoped what legislative measures would be required from her in respect of the Haass proposals on the past? In addition, what authorisations and directions would be needed from ministerial colleagues in Whitehall?
The advice I have been given is that Westminster legislation would not be required if the parties decided to implement the Haass 7 proposals, apart from a devolution of parading. The measures on the past, I am advised, could all be done via legislation in the Assembly, but I am happy to review this matter in discussions with the hon. Gentleman at a later date.
The Prime Minister was asked—
Is the Prime Minister aware that at the current time in England 3,956,000 people are in the private rented sector? Generation Rent finds that two thirds of them feel insecure and half of them feel that they pay far too much in rent. Does he not think it is time to end the social cleansing of inner-city Britain by bringing in proper rent regulation with a fair rent formula and total regulation of the private rented sector to give people security and peace of mind in where they live?
Where I am sure the hon. Gentleman and I would agree is that there is a need to build more houses, including houses in the private rental sector—I would say there is cross-party agreement on that. Where I think he is wrong is on full-on rent control, which has been tried in the past and has tended to destroy the private rented sector, drive everyone back to the state sector and reduce the quality of housing as a result.
In the week when our right hon. Friend the Chancellor of the Exchequer has spoken of the importance to the Government of securing full employment, will the Prime Minister confirm that the record shows that no Labour Government in history left office with unemployment lower than when they came to office? Does that not illustrate in this area, as in all others, the importance of the principle that what matters is what works?
My right hon. Friend is factually correct: every Labour Government have left office with unemployment higher than when they came to office. In this Parliament what we have seen is 1.7 million more people employed in the private sector and 1.3 million more people employed as a whole—one of the highest rates of employment in our history. We must keep up the work to offer more hope and more security to more of our people.
Here is what the Prime Minister’s own side is saying about this issue. The hon. Member for Northampton South (Mr Binley) said yesterday that it was a “debacle”, “unethical” and “immoral”. The Prime Minister sold the shares for 330p. What are they trading at now?
When the right hon. Gentleman was sitting in the Cabinet, this business lost half a billion pounds. It is now in the private sector. It is making profits, paying taxes and working hard for our country. More to the point, there are more than 140,000 people who work for the Post Office, delivering letters and parcels, who own shares in the business that they work for. They have a stake in the future of Royal Mail. They are collecting dividends as well as pay, and that is something of we should all be proud.
The Prime Minister cannot answer the question because it is such an embarrassment. He sold at 330p, and this morning the price was 563p. It is basic maths. It is not so much “The Wolf of Wall Street” but the dunce of Downing street. Let me ask him this: if Royal Mail was sold at today’s price, how much more would the taxpayer have made?
I will take a lecture from almost anyone in the country about the sale of Royal Mail, but not from the two muppets who advised the last Chancellor on selling the gold. There they sit with not a word of apology for £9 billion wasted. The Royal Mail privatisation has got £2 billion for the taxpayer, 140,000 employees owning shares and 700,000 members of the public who are now shareholders. This is a great success for our country, and something that the right hon. Gentleman should be praising.
Order. When the Prime Minister was speaking I said that he should not be shouted down and nor should anyone else. However hard the effort is made to shout someone down, it will not work because we will just keep going. The sooner the juveniles can grow up and reach adulthood, so much the better.
And here is the thing, Mr Speaker, a third of the shares were sold to just 16 City investors. And get this: there was a gentleman’s agreement that those City investors would not sell the shares. What happened? Within weeks, half of those shares had been sold, and they had made a killing worth hundreds of millions of pounds. In other words, mates rates to the Prime Minister’s friends in the City. Perhaps he can tell us what happened to that gentleman’s agreement on those shares?
We know why the right hon. Gentleman is asking these questions—because he is paid to by the trade unions. He sat in a Cabinet that wanted to privatise Royal Mail. That was its commitment. What happened was this. The general secretary of the Communication Workers Union said that “in terms of the last Labour Government, they tried to privatise the Royal Mail—it was the unions who brought that government to its senses.” Once again, Labour was weak in Government because it could not carry out its policies; it is weak in Opposition because it does not support shareholding by postal workers in Royal Mail; it is weak because it has no economic policy; and it is weak because it has no plan.
He has flogged it off to his friends in the City and he cannot answer the question. I will ask him the question again. There was a gentleman’s agreement that these so-called long-term investors would not sell their shares, but half of them were sold and hundreds of millions of pounds were made. What happened to that agreement? Answer the question.
What happened is that the taxpayer is £2 billion better off. Yes, and anyone who has sold shares has missed out on what is a successful business. The truth is this: the right hon. Gentleman sat in a Cabinet that wanted to privatise Royal Mail. They could not do it—[Interruption.]
They could not do it because the trade unions would not let them. There are now 140,000 shareholders working for Royal Mail and almost three quarters of a million members of the public with shares. Those are signs for celebration in our country, not reasons to talk them down just because the Opposition are anti-market, anti-competitive and anti-business. Nothing has changed in the Labour party. No wonder it has advertised this week for someone to bring some fresh ideas to the leadership. I have the commercial here. It says that they should have
“the ability to manage…different teams across the Labour Party”.
That must be the hardest job in Britain. No wonder Labour is looking for a change, because it has a leader who does not have a clue.
The Prime Minister has gone as red as a postbox, and that is because he knows that he lost £1.4 billion for the taxpayer. This is a sale that nobody wanted and nobody voted for—a national asset sold at a knockdown price to make a fortune for the few. It is a symbol of a Government who stand up for the wrong people, with the British people paying the price.
The right hon. Gentleman just said that it was a sale that nobody wanted. It was in his manifesto—it was a commitment of the last Government. They are shaking—[Interruption.] They worked so hard, but they failed to do it. This coalition Government privatised Royal Mail, created thousands of new shareholders and have a great business working for Britain. We have seen it all from Labour this week. They are advertising for fresh ideas. People around the right hon. Gentleman are fighting like ferrets in a sack. Their top adviser—get this, Mr Speaker—is called Arnie and he has gone to America, but unlike Arnie he has said “I’m not coming back.” They are warring, they are weak and they do not have a plan.
Q2. It is as quick to go 225 miles over land and sea from here to Brussels as it is to go half the distance on the train to Norwich. Does my right hon. Friend agree that East Anglia needs investment in better, faster rail infrastructure and that the Norwich in 90 taskforce will bring benefits to businesses and passengers in Norfolk, Suffolk and Essex? (903444)
I pay tribute to my hon. Friend and others for the work they are doing on the Norwich in 90 taskforce. This is a very important project. I welcome the interest shown by business leaders, local authorities and enterprise partnerships. East Anglia is one of the fastest-growing parts of our country and it has world-class companies and universities. Better transport will support and bolster that growth and I look forward to the taskforce report that I know she is working on. I hope that it will be used to shape the specification for the long rail franchise, which should start in 2016.
Q3. Thirty-five years ago, the Scottish National party and the Tories united to bring down a Labour Government and bring in Margaret Thatcher—[Interruption.] Note, Mr Speaker, that the noise is coming from two sides of the House. Today, the SNP and the Tories are united on the side of tax cuts for big business, united on the side of the energy companies and united against a 50p tax. Does that not demonstrate to the Prime Minister that what people across the UK need is not separation between Scotland and England but liberation from right-wing Tory economics? (903445)
The hon. Gentleman has provided a very useful public service by reminding me of one useful thing that the SNP has done in its history by getting rid of that dreadful Labour Government who nationalised half of British industry and made such a mess. I agree with him on one very important thing, in spite of his views, and that is that the United Kingdom is much better off together, but I do think he is completely wrong about one of the issues he raised. This is the week in which we have cut corporation tax to 21%. That will attract businesses into England, into Wales, into Scotland and into Northern Ireland. He should be standing up and praising this tax-cutting Government, rather than criticising them.
A planning inspector recently told a closed meeting in Gloucestershire that he would give more weight to consultants’ economic models than to “10,000 objections from local people”. Is that what the national planning framework really meant by “empowering” local people?
The national planning framework is very clear about the importance of listening to local people on development. My hon. Friend will have received a letter recently explaining some of the changes in the guidance under the framework to make sure that, for instance, previous housing performance by local councils is taken into account in these very important decisions.
Q4. At a time of unprecedented crisis, the Prime Minister saw at first hand just how good the West Cumberland hospital in my constituency can be. Six years into a rebuilding programme, that hospital has been plunged into crisis, is being starved of staff and faces being stripped of key clinical services. The nearest hospital is not just down the road—it is 42 miles away in Carlisle, and that, too, is struggling. Will the Prime Minister commit today to do everything he can to assist me, local clinicians and my community in retaining consultant-led services at the West Cumberland hospital? (903446)
The hon. Gentleman is right to say that I saw for myself what an excellent job this hospital does and how important it is. The clinical commissioning group total revenue available this year is an increase of 2.3%—£663 million. That is because this Government decided to protect NHS spending and not cut it, and that is why important hospital developments can go ahead.
Q5. There are record numbers of small businesses and many more people seeking to become self-employed. What steps are the Government taking to support first-time entrepreneurs in becoming first-time employers and helping many more people achieve their ambitions in life? (903447)
My hon. Friend is absolutely right. We need to make it easier for someone to take on their first employee. That is why, this Saturday, we are bringing in the £2,000 employment allowance, which comes into force on Sunday. It means that every business that employs someone will see a tax reduction of up to £2,000. That means that 55,000 businesses will be taken out of paying national insurance contributions altogether. Whereas the Labour party introduced jobs taxes, we are cutting jobs taxes.
Q6. At the weekend, General Sir Richard Shirreff warned that reducing the Regular Army from 102,000 to 82,000 by 2020 would weaken the armed forces and was “one hell of a risk” to take. Why does the Prime Minister think that it is not one hell of a risk? (903448)
It is the right thing to do because what is most important is to make sure that our armed forces have the best equipment of any armed forces anywhere in the world. I have been out to Afghanistan every year since 2006, sometimes twice a year, and I always ask the same question: “Do you have the equipment you need? Is there anything else that you want?” It is under this Government that we have seen real improvements in equipment. Yes, we will have an 82,000 Regular Army. We will also have a larger reserve force, and we are recruiting for that actively, and we will have armed forces and defence equipment that this country can be very proud of.
Following last week’s excellent news of the Siemens development in Hull, it is vital that we move quickly with projects planned for the south bank of the Humber. Does my right hon. Friend share my view that all parties must work together to make sure that the Humber does indeed become the green energy capital of the UK?
I absolutely agree with my hon. Friend. The announcement by Siemens is a huge step forward, because I think it will bring an enormous amount of industry in its wake in terms of supply and component manufacture. We now need to make sure that the colleges are training up apprentices, and that UK Trade & Investment is working to attract other businesses to the area. As he knows, agreements are still needed in other parts of Humberside to make sure that all the necessary developments go ahead.
Q7. The Prime Minister will know that millions of people across the country value and love their Post Office card account, particularly those who do not have access to banks and do not want a bank, but want to get their cash each week. The contract with the Department for Work and Pensions is now being renegotiated. Will he give a commitment today that whatever happens, pensioners, and indeed everyone on benefits, will be able to access the money that they need through the Post Office? (903449)
I shall look carefully at what the hon. Lady says. It is important for people to be able to use the Post Office in the way that she says. Obviously, there have been changes in the way that the card account works, but I strongly support it and I will look closely at what she says and perhaps write to her.
The Territorial Army won 71 VCs and thousands of other decorations in the first world war. In this 100th anniversary year of that war, does my right hon. Friend accept that learning lessons from our English-speaking cousins in America, particularly the pivotal role the National Guard has played in Iraq and Afghanistan, is the way to ensure that we can afford the equipment our armed forces need for the future?
Let me pay tribute to my hon. Friend who has campaigned long and hard for our Territorial Army and other reserve forces. The point he makes is a good one. Today in Afghanistan we see our Territorial Army working alongside our Regular Army, fighting with them and being decorated with them for their brave actions. Other countries have shown that it is possible to have a larger reserve force alongside the regular force. That is the way to have a well-equipped and flexible Army, Navy and Air Force for the future.
Q8. The Lanzarote convention sets a Europe-wide standard for the protection of children against sexual exploitation. The UK has signed it but not yet ratified it. Following recent episodes of grooming in the UK, including in my borough of Rochdale, will the Government now consider ratifying that very important convention? (903450)
I absolutely agree with the hon. Gentleman that child sexual exploitation is an abhorrent crime. We are determined to stamp it out. We have seen some extremely disturbing cases, not just in Rochdale, but in Oxfordshire, the county I represent. As he says, we have signed the convention. I understand that there is a small amount of further assessment to be done before the UK is in a position to ratify it. I will keep in touch with developments for him.
Q9. Does my right hon. Friend agree that the doubling of capital allowances to £500,000 provides a welcome boost to manufacturers in Dudley and the black country, such as Miss Daisy’s Manufacturing which I visited recently, and will increase investment in the manufacturing sector, securing more jobs for the British people? (903451)
My hon. Friend is absolutely right. A key part of our long-term economic plan is to make sure we get our businesses investing. One of the remarkable things about the Budget was all the ways it said we would address some of the perennial weaknesses in the British economy. We need to export more, to invest more and to improve our performance in those regards, and we need to ensure that investment is spread around our country. Unlike the Labour party, we are not going to be satisfied with an unbalanced recovery.
Today the Ford Motor Company agreed a multi-million pound contribution towards the Visteon pension fund for former Ford employees. Will the Prime Minister congratulate Unite the union which, alongside a cross-party group of MPs, has struggled to get a fair deal for former Ford workers? Will he commit to supporting pensioners facing the same plight at the hands of other multinational companies? [Interruption.]
I did not catch the end of the hon. Gentleman’s question, but I wholeheartedly agree that this is a good development for pensioners. All those who played a role—I think that colleagues on both sides of the House have been involved—are to be credited for the work they have done with Ford to make sure we get that justice.
Q10. Although I welcome the Government’s intervention on fuel bills, many rural people do not benefit from mains gas and have to depend on more expensive fuels. Will the Government investigate how they can benefit off-grid customers, who often live in fuel poverty? (903452)
My hon. Friend raises an important point. There are many people who are off mains gas, including in my constituency. I think that there are things we can do, not least encouraging the power of group purchasing by encouraging communities to come together to buy oil and gas so that they can drive down prices. I am sure that he will be looking at the options available in his constituency.
Q11. Three months ago I asked the Prime Minister about his £1,000 bobby tax, which anyone joining the police has to pay. [Interruption.] One thousand pounds may not be much to him, but it is having a huge impact on forces such as the Met, which is 2,000 officers under strength and finding it impossible to recruit. Interruption.] We all know that the bobby tax is wrong— (903453)
This is an important issue for everyone who lives in this country. We all know that the bobby tax is wrong, but will the Prime Minister now accept that it is not working and abolish it so that our police get back to strength to defend the people in my constituency of Mitcham and Morden?
First, it is not a tax; secondly, it is not a barrier to recruitment; and thirdly, recruitment is taking place in the Metropolitan police. Yes of course we have seen reductions in police funding, but we have also seen significant cuts in crime. I am proud to say that the Metropolitan police are recruiting, and they are confident they will be able to get good recruits.
Q12. Bringing superfast broadband to rural areas is vital, and the Government are rightly spending over £1 billion on it, but my constituents are very frustrated that BT cannot tell them when, or even if, their home will be connected, which makes alternative planning impossible. Will the Prime Minister tell BT to produce clear plans for the billions of pounds of taxpayers’ money it is getting? (903454)
I have had this discussion with BT, and I am happy to hold it again. I know that the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), will take up the specific point, which is that we have asked BT to give more detail in their roll-out plans about which homes and areas will get broadband so that other companies and organisations are then able to see whether there are different ways of filling any gaps. However, I do not agree with some who think that BT has somehow not been putting its shoulder to the wheel. A massive investment is going into broadband: 10,000 homes and businesses are being connected every week. This is a real success story for our country.
Q14. My constituent Mariana Robinson is seeking the right to be treated by the English-run NHS. Will the Prime Minister investigate what can be done to help her and other NHS refugees who are seeking the higher standards and lower waiting times that are being delivered by this Government? (903456)
My hon. Friend is right to raise this because, frankly, what is happening in our NHS in Wales is a scandal. It is a scandal that is entirely the responsibility of the Labour party running the Welsh Assembly Government, who made the decision to cut NHS spending by 8% in Wales. As a result, they have not met an A and E target since 2009. The last time—[Interruption.] I do not know why the Leader of the Opposition is laughing; the state of the NHS in Wales is not funny. If he had any gumption—any backbone—he would get hold of the First Minister in Wales and tell him to start investing in the NHS in Wales.
Twenty-five years ago yesterday, the hated poll tax was imposed on the people of Scotland. That ended with the Prime Minister being kicked out of office by her own party. Will the Prime Minister take this opportunity to apologise for that imposition?
Q15. In 2012, 150,000 people petitioned this House to stop charitable air ambulances having to pay VAT on fuel. May I thank the Prime Minister for his actions in the 2014 Budget which will mean that more missions are flown and more lives are saved? Does he agree that this is possible only because we are using the LIBOR fines for good purposes and because we have a long-term economic plan? (903457)
My hon. Friend is absolutely right. I pay tribute to him because he is the founder and chair of the all-party group on air ambulances. He has campaigned tirelessly on this issue, and he led a debate in the House in 2012. I am delighted about the result that was achieved in the Budget. As he says, it will lead to an expansion of the service. He is also right that you can only make these decisions if you look after the nation’s resources, control public spending, and get the deficit down—in short, if you have a long-term economic plan.
It appears from my council tax bill that the Labour-led Lancashire county council and the Labour-led Lancaster district council have raised council tax by 2%. [Interruption.] Yes, very shocking. Will the Prime Minister help me to find out what has really gone on—whether it is really 2% or some other erroneous figure—and help me to sort the matter out?
What I would say to my hon. Friend—and he can say this to Lancashire county council, and indeed to his district council—is that this Government are making the money available so that councils can freeze their council tax. There is no excuse for councils that do not want to take that step. They should help people, keep their bills down and make sure that the council tax is frozen.
The Liberton high school community in my constituency was left devastated just before Christmas when 13-year-old pupil Jamie Skinner died while playing football. That heartbreak returned yesterday with the sad death of 12-year-old Keane Wallis-Bennett when a fabricated wall collapsed on her while she was at school. I am sure the Prime Minister and the whole House will wish to send their condolences to the head teacher, Stephen Kelly, the staff, teachers and pupils at the school, her friends and of course her family, who sent her to school yesterday morning, for her never to return home.
The whole House will agree with what the hon. Gentleman said. It was an absolutely shocking accident that people will have seen across the country. Their hearts will go out to the family and all those involved with the school. Clearly the lessons will have to be learned to make sure that tragic accidents like that cannot happen again.
The Chancellor’s cut in beer duty is great news for Britain’s brewers, as it will allow them to invest, but it will do nothing to help the 20,000 pubs tied to large companies. He has got rid of the fuel duty escalator, the beer duty escalator and the alcohol duty escalator; will the Government now tackle the pubco problem by getting rid of the pubco price escalator?
I thank my hon. Friend for what he said about the cut in beer duty, which is the second in a row in the Budget. It is about making sure that the industry creates jobs and about supporting our pub trade. It was noticeable that straight after the Budget Marston’s announced 3,000 additional jobs. We want to look very carefully at what is happening in tied pubs and at the activities of some pub companies. It has been debated in the House. We are looking very closely at what more we can do to make sure there are fair outcomes for Britain’s publicans and Britain’s pub goers.
The biggest plan we have in this area is to expand the number of people going into higher education by taking the cap off the numbers who can attend. Our plans on fees and repayments are clearly set out. It is encouraging that they have not put people off going to university, nor have they put people from low-income backgrounds off going to university.
I would make this point to the hon. Gentleman. Someone said in June 2010:
“A graduate tax would replace upfront tuition fees…I want to consult widely before publishing detailed plans later this year.”
That was the Leader of the Opposition, in June 2010. I know we are dealing with a blank page and an empty head, but for heaven’s sake, get on with it.
Does the Prime Minister agree that it is the skills, enterprise and sheer hard work of all the staff at companies such as Honeytop Speciality Foods, that, in conjunction with our long-term economic plan, are driving the economy forward? That company created 200 full-time jobs last year and another 75 this year. It has exported naan bread to India, has created the fastest burger bun line in the whole of Europe and is making Dunstable the crumpet capital of the United Kingdom.
Very good—I am delighted that Dunstable is taking on that label. It is an important week for British business and for British families. This week, corporation tax has been cut to make our businesses stronger, the £10,000 personal allowance is being introduced to make our families stronger, and we have the £2,000 employment allowance to make small businesses stronger. There are 3 million people who will now have been taken out of income tax all together. That is what is happening in our country. Our economy is getting stronger and everyone can see that Labour’s arguments are getting weaker all the time.
Point of Order
On a point of order, Mr Speaker. In his exchanges with the Leader of the Opposition, the Prime Minister suggested that the 2010 Labour manifesto proposed privatising Royal Mail. In fact, the 2010 Labour manifesto said, very clearly:
“continuing modernisation and investment will be needed by the Royal Mail in the public sector.”
Could you use your good offices, Mr Speaker, to ensure that the Prime Minister comes back to the Chamber to speedily correct the record?
I am not sure that I can offer the hon. Gentleman any such hope, but he is a wily and experienced operator who is aware of the opportunity that points of order, or attempted points of order, can present to him to correct the record. He has availed himself of that opportunity, and doubtless his observations will be winging their way to the Leicester Mercury ere long.
Scotland (Independence) (Westminster Representation)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move.
That leave be given to bring in a Bill to provide that, in the event of a positive vote in the Scottish Independence referendum, Members of Parliament representing Scottish constituencies shall vacate their seats on the day on which Scotland becomes independent; that Scottish constituencies shall be abolished with effect from the same date; and for connected purposes.
This Bill seeks to address the consequences of a positive yes result in the first consultation with the people of Scotland on the Union of the Parliaments of 1707. Indeed, it is the first such consultation for 307 years.
According to Michael Fry in his 2006 book, “The Union”, the Union was brought about following a trade war during which Scots parliamentarians sought to abolish their Parliament, end a trade war with a large neighbour and in return be able to trade freely with them. Today, thankfully, in a world with intergovernmental organisations such as the European Union, the European economic area and the World Trade Organisation, such a move would be unnecessary. Had those organisations existed in the past, perhaps such a union would never have happened. Incidentally, I understand that Mr Fry started writing “The Union” as a Unionist, but due to the knowledge he gleaned from the process he ended up supporting independence.
The main positive consequence of the referendum would, of course, be independence for Scotland, that most ancient of European nations. It is currently a stateless nation, but not, I hope, for much longer. We want to be clear about what the referendum seeks to do: it seeks to end the tawdry political union of 1707 and move political powers that belong to Scotland back to Scotland, completing logically the process of devolution and ending the anomaly of the West Lothian question, whereby some Scottish MPs vote on English matters, such as giving English students tuition fees of between £6,000 and £9,000, while their own constituents are being well taken care of by the good management of an SNP Government in Edinburgh and paying nothing.
Incidentally, Members will have noticed over the years that the SNP does not vote on matters affecting England, because it believes, like the French and Germans, that other peoples can govern themselves effectively without any help from the Scots. Such an approach should be adopted by all Scottish MPs in the event of a yes vote.
It should be understood by those people who often erroneously bundle things together that the referendum does not affect the Union of the Crowns of 1603, which started with James Stuart and continues to this day with our present Queen Elizabeth II, who is Head of State of 16 independent realms, with Canada, New Zealand and Australia the most notable among them.
The Bill has at its heart fairness, particularly the issue of democratic fairness for our neighbours—the good people who live in England, Wales and Northern Ireland —as it would remove MPs from Scotland. It respects their democratic rights and functions as well as our own in Scotland. The Bill seeks to remove Scottish MPs from this place following what I expect—and the polls are moving—will be a positive yes result on 18 September. Scottish MPs should of course vacate this place when powers over Scotland are returned to Scotland, which is at present expected to be on 24 March 2016.
In reference to last week’s ten-minute rule Bill—Representation of the People (Scotland)—which was defeated in this House on a Division, some Members from non-Scottish seats seem to be in a greater hurry for independence, and in seeking to remove the franchise from Scottish people, to be moving independence to May 2015, 10 months earlier. If Scots no longer pay tax to the Treasury in London and our laws are no longer decided here, it would surely be an affront to democracy to have the spectre of non-Scottish taxpayers of the rUK—the rump or the rest of the United Kingdom—paying the salaries of MPs and staff. It would be the ultimate power without responsibility for a class of MPs without constituency duties, whose actions would be without consequences, to be paid for by the constituents of other Members, while their own constituents had moved on to build a successful Scotland and to develop an oil fund on the model of Norway.
This Bill seeks to give clarity to what will happen in this place post-independence. The state would also save £50 million, a step that I am sure would be very welcome. A journalist asked me yesterday whether I thought that some Scottish MPs would seek to cling on to the trappings of Westminster. I hope not, but I fear that some are putting career and power games at Westminster to the fore. I believe that it is more important to seek to improve lives in some of the most deprived parts of Scotland, to end poverty and child poverty, and to increase hope and opportunity.
Given that 200,000 jobs in the UK are now dependent on trade with a successful and independent Republic of Ireland—indeed, trade has never been higher between the UK and the Republic of Ireland—I hope that Scotland will similarly bring benefits to and improve lives in England, especially for our friends in the north of England with whom, just like the Irish, we share so much; except, we hope, a Government in London, thank you.
It is important for this House to speak clearly on things as people have the right to know how things will be after a positive yes result in September. Sadly, too many in the Government in London have not given mature and reflective consideration to what would happen post-independence. There has been a pattern. Initially, there was talk of any referendum following the SNP landslide victory of 2011—it formed the only majority Government anywhere in these islands—being a non-starter or even illegal, beyond the competence of the Scottish Parliament. When it became obvious that the referendum was going to happen anyway, Westminster then reacted late but correctly in reaching the Edinburgh agreement. The process in Scotland has lately been described by President Obama, Secretary of State Kerry and the Foreign Minister of Poland, to name but three in a diverse bunch, as a model of how to go about such matters in a decent and civilised manner.
The negativity continued, however, and the Chancellor and his cohorts warned darkly that the referendum would deter investment in Scotland. I am pleased to tell the House that the opposite has happened. The scare stories are continuing. We are well used to that in Scotland. Whether it was the paltry assembly suggested in 1979, the Scots Parliament in 1997 or the election of the first SNP Government in 2007, we were told that the sky would fall in. Frankly, the sky has not fallen in; indeed, the sun has shone more strongly and brightly with all those institutions happily going from strength to strength over the years.
Why has there been that negativity? Instead of engagement, such as the important tidying up that this Bill seeks to do, the powers that be in Westminster and Whitehall are not thinking clearly and rationally about Scotland, but mainly have late thoughts and make very much knee-jerk reactions to events in Scotland that sound panicked and out of touch. Thankfully, I can report that not all hon. Members feel like that. Privately, many are relaxed about Scottish independence and very kindly wish us well—we could not have better friends and neighbours, as we move to independence—and many more would support the Bill if they did not have to deal with other pressing matters within their parties.
The powers that be still insist on the scare stories, the most notable being about the currency union. Even Tory Back Benchers do not believe these scares, as viewers of S4C in Wales will know. This weekend, Nicholas Watt of The Guardian found a similarly minded Government or Cabinet Minister, who believed a currency union was doable. Even those leading the no campaign, who maintain on one hand that having no currency union is an iron law, are saying on the other hand that a referendum about it is possible, oblivious to their earlier words on the matter. There is now a lot of rust on their iron law against Scotland, and polls show anyway that the people do not believe them.
The Bill is a plea for maturity and responsibility, for those in both Governments—Edinburgh and London—to sit round the table. I know that the Scottish Government are willing to do so. Both Governments should plan for and inform the people about the possibilities. Keeping such matters secret from the people in a democracy is surely an affront to that very democracy, and that weakens us all collectively when we proclaim the merits of democracy around the world. In the Lords, Lord Forsyth recently called—on 3 March—on the Government to anticipate events, and not just on the currency, and I agree with him.
A couple of weeks ago, I had the pleasure—quite accidentally—of greeting the Irish Prime Minister, the Taoiseach Enda Kenny, in the House of Commons. We chatted in Gaelic, a unique hybrid of Scots and Irish, you might say, Mr Speaker. It transpired that he had been to Downing street, where both sides had declared that relations had never been better between Dublin and London. They agreed on a variety of things, including joint trade missions to Singapore, moves to have common visas for people travelling from China or India to the UK and the Republic of Ireland, and cutting deals on renewable energy.
This House has changed and no one here thinks that Ireland should not be independent, or, indeed, the 50 other nations of Europe that have contributed to the fourfold increase in the number of independent nations worldwide, which is now at 200. Europe now has as many independent nations as the world had 100 years ago. As Professor Steven Pinker says, there has never been a safer place for a human being to be alive in history than Europe right now.
Scotland is following that successful tide of history. The tide indicates that Scotland will be independent. Something is happening in Scotland: an ancient nation is awakening to regain its statehood and to use its talents and resources for its people and to help and benefit others outwith our nation. The House, at the very least, should be aware of that and plan. Members should have watched the report by Martin Geissler on ITN a week last Thursday, which showed that people are returning to the electoral roll in droves after the poll tax debacle of 25 years ago. The yes campaign believes that that is for a purpose.
Scottish people want oil taxes to be controlled in Scotland, all general taxes to be controlled in Scotland, welfare to be controlled in Scotland, and decisions on whether our young men and women are involved in foreign wars to be controlled in Scotland. That is what we call independence and that is what we are moving towards. Scotland wants and needs to be part of those domestic and international realities. The Scottish people can do this, the Scottish people should do this and Scotland must do this. This is where Scotland is going. For the good of us all and to bring clarity, fairness and democracy, I commend the Bill to the House, even though it would make me unemployed.
Question put and agreed to.
That Mr Angus Brendan MacNeil, Angus Robertson, Pete Wishart, Mr Mike Weir, Dr Eilidh Whiteford, Mr Elfyn Llwyd, Hywel Williams, Jonathan Edwards, Caroline Lucas, David T. C. Davies and Andrew Percy present the Bill.
Mr Angus Brendan MacNeil accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 6 June, and to be printed (Bill 196).
[Un-allotted Half Day]
Energy Price Freeze
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.
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:
—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.
The price freeze we have suggested is in recognition of the dodgy dealing that has been going on, and we have proof of the fact that when wholesale prices have gone down, they have not been passed on to the consumer. If the hon. Gentleman does not get that, he will not win at the next general election.
The Government were wrong about our price freeze, and today is their chance to atone for their error. They have been wrong about much else besides. The Secretary of State likes to claim that Labour created the big six, but who botched the privatisation of our utilities, sold off our country’s assets for much less than they were worth, and removed the restriction on vertical integration? It was not us; it was the previous Conservative Government. As this week’s revelations about Royal Mail remind us, they are the same old Tories. They might think they know how to run a business, but they are not fit to govern.
It is not normally that I come to some colleagues’ defences, but since the right hon. Lady is talking about privatisation, which party lifted price controls on energy markets, and when?
It was a recommendation from Ofgem that we want to abolish. It was wrong and it did not work, and I will get to that point. Unlike the Secretary of State, I came to this job to look seriously at what has gone wrong in the energy market, and since privatisation over 30 years ago, mistakes have been made. Mistakes are being made now that could be put right if the Secretary of State had the gumption to do it, but he does not.
The price freeze that my right hon. Friend is proposing is not an end in itself. Is not the fundamental problem that the big six supply energy to 97% of homes and control 70% of power generation in this country? That means that people cannot shop around and often get overcharged. Do we need the price freeze so that we can begin the process of resetting the market?
I will give way shortly but I want to make a little progress.
The Secretary of State lauds the days when there were 15 energy suppliers, as if it were some nirvana of competition where consumers had choice, customer service was great, and bills were low. He does not mention that the reason there were 15 suppliers was that there were 14 regional electricity suppliers, each with a complete monopoly in their own area, and only one gas supplier, which had a monopoly across the entire country. Consumers had no choice at all; nobody could switch, and that was that. Who gave ordinary consumers the power to choose who supplied their electricity, and who tried to open up the energy market to full retail competition? It was the previous Labour Government.
I will give way shortly but I want to make this point. The Secretary of State also boasts that on his watch 18 new entrants are challenging the dominance of the big six. He is right: 18 other suppliers are in the domestic market, but when did they enter it? When did companies such as Good Energy, First Utility, and Ovo Energy enter the market? Was it under this Government? No, it was not—it was under the previous Labour Government.
I will finish this point. Good Energy: 2003; First Utility: 2008; OVO: 2009. In total, there were not just six suppliers in 2010, as the Secretary of State likes to say, there were 14, and in recent years the growth of those companies has begun to erode the market share of the big six.
Yes, there are more suppliers out there challenging the incumbents, and the market share of the big six is down from a huge 99% to a still pretty massive 95%, but that is no thanks to the Secretary of State. If he does not even understand the problems with our energy market, why should anybody trust him to fix it? Let us not forget that the only reason we are having this debate, and the only reason the energy market has been referred to the Competition and Markets Authority, is the way in which Labour, along with others, has stood up for customers and refused to be silenced.
Clearly, the right hon. Lady has thought carefully about the implications of a price freeze. What discussions has she had with trade unions and the energy industry about the possibility, should there be a price freeze, of a demand for a wages and salary freeze in the energy industry?
The energy companies have clearly been making profits that have not been reflected in efficiencies in their organisations or a fair trade off between what they should spend on getting bills down and investment. I believe in this sector and that its potential growth is enormous. The truth, however, is that staff in those organisations are not served well by a management that refuses to faces up to its responsibilities to provide good customer service and efficient services in which everyone can gain. The only people gaining at the moment are the big six chief executives and their management boards, and those who benefit from the profits they have made—unfair profits that have not been passed on and shared with consumers and investment.
I am pleased that the Labour party now supports the market investigation reference. Will the right hon. Lady confirm that that was not the case a few months ago, and that when the Leader of the Opposition was doing my job and had a chance to take such action, he did not?
In 2011, Labour, under my right hon. Friend the Member for Doncaster North (Edward Miliband), a previous Secretary of State for Energy and Climate Change, supported a full market investigation. The former Secretary of State opposed that. [Interruption.] No, I am sorry, but this is a very important point. Labour supported an investigation two and a half years ago and the Government opposed it. Labour then looked at ways of reforming the market, short of a CMA. The truth is that we welcome the CMA, but we also know that we should not allow this issue to be kicked into the long grass. We should be planning our reforms now. The Secretary of State cannot ignore that.
The Secretary of State told the House in a statement last week that the energy market has improved since 2010. Ofgem’s assessment shows precisely the opposite: things have got worse since 2010, not better. Apart from a spike in switching in a couple of months at the end of 2013—which I have to say had more to do with the Leader of the Opposition’s speech at the Labour conference than anything the Government did—the number of people switching has fallen. The latest statistics, published by the Government last week, show that 2013 was the second-worst year on record for the level of switching. The spike at the end of 2013 appears to have been completely reversed.
Small suppliers have been gaining customers and their market share has been growing, but paragraph 5.16 of Ofgem’s assessment is clear that last year, for example, half the so-called growth in market share for smaller suppliers actually resulted from npower selling Telecom Plus, which just so happens to have a 20-year contract with npower for its energy supply. In any case, as figures 28 and 29 show, the overall rate at which suppliers have been winning customers has fallen. Figure 39 of Ofgem’s assessment also clearly shows that the total amount of energy being traded has fallen in each year since the general election, as has the churn rate.
The only things that have increased on this Government’s watch are people’s bills and the profits of the big energy companies, which, paragraph 6.10 of the report notes, have increased five-fold in the last three years—up from just £200 million in 2009 to £1.2 billion in 2012. Let us not forget the increase in households in fuel poverty, and the growing queue of people who cannot get their home insulated after the Government’s tinkering with bills last autumn. The Secretary of State must be so proud.
The notion that the energy market is, as the Secretary of State puts it, “improving”, is very obviously wrong. What the report shows, and again I quote directly from section 4, is that
“things are getting worse for consumers.”
That is the conclusion of the report; and that is a verdict on this Government’s record.
The right hon. Lady mentioned Good Energy. I met Good Energy this morning and it is quite clear that Labour’s policy would cause it real problems as a small green supplier. Is not the truth that this would be bad for competition, and, as it wrote to the right hon. Lady, that it treats the symptom not the cause?
I am not surprised that energy suppliers, big or small, do not like having their prices frozen. I would be surprised if they did support it. However, when Stephen Fitzpatrick, the chief executive of Ovo, was asked whether it would affect his company model, he said:
“No I don’t think so, we set up our business to make sure that we are able to pass on the greatest amount of savings possible to energy customers.”
When asked, “Will you be affected?” he replied:
“No I think it will probably be great for our business to see any kind of pressure put on the big six.”
The same goes for Co-operative Energy. The big prize for Good Energy, Co-operative Energy, Ovo and the others is a reforming of the market to ensure that they have greater access to the products they wish to sell. There is a big prize for them that many of them support through our reforms.
I hesitate to interrupt a very good speech. Those of us who support the reference to the CMA worry that there will be another 18 months—there will be a new Government, which will obviously be a Labour Government—when we still will not have tackled the deep disaster of the mess that the Conservative party made of the privatisation of the energy sector. We need a fundamental look at energy, root and branch.
My hon. Friend is right. In the statement last week, I thought he made a very fair contribution, saying, “Look, there are real problems here that we all have to acknowledge, address and deal with.” I welcome the reference to the CMA, but we cannot allow the silence that some Government Members would now like to follow on this issue of public importance. That is why we have to draw a line in the sand and have a freeze. It is also why we should get on with some of the other ways in which we can address the reforms that are necessary in this market. I have been very open that there may be aspects of the CMA investigation into this murky world that will find other issues that Labour has yet to look at and that might be helpful to our reform programme. I very much welcome that, but we cannot allow this issue to be kicked into the long grass.
The report clearly highlights the need for reform in our energy market, as we have made clear for the last three years. It identifies five significant problems that are preventing consumers from enjoying the full benefits of competition. None of them is new.
In Northern Ireland, there are just two electricity companies: Power NI and Airtricity. Last year, Power NI put up its prices by 14%. Does the right hon. Lady feel that it is time we had a more open market with more suppliers, so that the price can come down, and that the sooner that happens, the sooner we can take advantage of that?
I absolutely agree, which is why one of our proposals is to create an electricity pool or power exchange whereby all energy for that sector is put into a pool, enabling anybody to come in and compete on price to retail. Small suppliers, and, I have to say, increasingly some of the bigger players, recognise that this idea is making some headway in the discussions on what the future should offer. We look to Northern Ireland and other countries to learn from their experiences. We do not operate in a bubble; it is worth looking elsewhere for ideas.
The report identifies five significant problems. Many of them were things that Labour Members raised in the eight previous Opposition day debates on this issue and that feature in our Green Paper. The first problem is weak competition. Companies are able to increase their profit margins at will, without any obvious efficiencies or improvement in customer service. They are simply getting away with passing on cost increases, but not cost reductions.
The second problem is market segmentation: suppliers enjoying big market shares in their old monopoly areas, and companies charging some customers, particularly loyal customers, significantly more than others, even though they are providing them with an identical product. Thirdly, there is tacit co-ordination between suppliers: price announcements, normally increases of similar amounts, being announced at the same time and with growing lead-in times. Fourthly, there are barriers to entry and expansion for new players in the market. In particular, the lack of liquidity in the wholesale market makes it difficult for non-integrated players to access power at competitive prices. The fifth problem is weak customer pressure: low and declining levels of customer trust in this market.
That is the final reason a price freeze is so important. Yes, it is about compensating consumers for overcharging in the past. Yes, it is about protecting them from any more unfair price rises while the market is being reformed for the future, but it is also a line in the sand. It tells the companies that their days of overcharging are over, and it tells consumers that the rules of the game have changed for good. It tells them that the rules are no longer set by six giant companies, but by one Government acting for the many not the mighty few.
Did not Ofgem identify—in, I think 2008—16 things it thought was wrong with the energy market? It admitted, in 2011, that 12 of them had got worse or had stayed the same. Is it not key to have an energy watchdog that stands up for consumers, takes on the big six and rectifies the issues my right hon. Friend has identified?
My hon. Friend is right to draw attention to recent Ofgem investigations. In fact, in the past six years I think it has had three major investigations: on supply, the retail market and the wholesale market. It has failed to get to grips with the real problem. We have seen piecemeal changes that are just not having any impact. Even when there were recommendations about the market and how it could be reformed, it did not take them on board. It is only recently that it seems to be waking up to that.
Ultimately, competition will work only if companies are constrained by the fear of losing customers if they increase their prices too much. Consumers will be prepared to engage in the market, to invest their time and effort to secure the best deal, only if they believe the market is fair and if there are proper rules in place to prevent them from being ripped-off. We should be honest, too, that switching cannot be the only metric of a healthy market. There will always be those for whom regular switching is not a reality, either because they do not have the confidence to switch, even in a simplified system, or because they may have the confidence, but are time-poor and seem to spend their whole life switching from one thing to another. A healthy market must be a managed market, and that is why the price freeze is so important.
My hon. Friend the Member for Bristol East (Kerry McCarthy) mentioned Ofgem a moment ago. In its report on energy prices, profits and fuel poverty, the Select Committee said that Ofgem was “failing consumers”, and had not been properly using the powers at its disposal. Last December, the Secretary of State said that Ofgem was “fit for purpose”. Does my hon. Friend agree?
I agree with the Select Committee, and I do not agree with the Secretary of State. I shall come to the question of why the role of Ofgem has been omitted from the market investigation, because it is a very important part of the future reform of the sector.
As my hon. Friends have pointed out, our motion makes it clear that the price freeze would be only a temporary measure during the reform of the energy market. However, the House should be in no doubt about the fact that the public have heard Labour’s case for reform, and they want change. The companies have heard our case as well. Alistair Phillips-Davies, chief executive of SSE, said last week that the Leader of the Opposition had
“changed the way people look at the energy market”.
That is why, last week, SSE announced not just a price freeze until 2016 but that it would legally separate its supply business from its generation businesses, which is what we had called for. At least two other firms claim that they already operate in that way.
What we cannot have is companies going away—perhaps in an attempt to pre-empt reforms that they know are coming—and leaving the public with six versions of what reform looks like. These reforms need to be consistent, led by the Government, and backed up by proper powers of enforcement. Our Green Paper proposes a number of significant reforms, namely a ring fence between generation and supply, an end to secret trades and self-supply, the introduction of a pool in which all generators and all suppliers can compete openly and on price, new powers to penalise anti-competitive behaviour and protect consumers, new protections for off-grid customers and small businesses—2 million rural customers and millions of businesses will be properly protected for the first time—and simpler and fairer tariffs.
No. I have already given way quite generously, and others wish to speak.
Last week’s report and the decision to initiate a full market investigation only serve to highlight how important and urgent the process of reform is. Of course the CMA will undertake its independent investigation and reach its own conclusions, but if there are measures that we could take now to improve the market and make it work better for consumers, we should take them.
There was one subject on which Ofgem’s report was—perhaps unsurprisingly— silent: the role and performance of Ofgem itself. In recent months, much attention has rightly been focused on the behaviour of the energy companies: the prices they have charged, and the way in which they have mistreated their customers. However, companies operate only within the framework set by the regulator. When we challenge these companies over their behaviour, it is only right for us to assess the responsibility of the regulator itself for allowing the very market conditions that it now laments to come to pass in the first place.
I have challenged the Secretary of State on that point many times in the past, and so far he has been a steadfast defender of Ofgem. As was mentioned earlier by my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), on 2 December last year he told the House:
“Ofgem is fit for purpose.”—[Official Report, 2 December 2013; Vol. 571, c. 634.]
On 4 September, he said that he disagreed with my statement that Ofgem was not using its powers. However, the very fact that Ofgem has chosen to refer the market to the CMA represents a clear admission that it has not been able to regulate the market properly and protect consumers. Had it been able to do so, there would have been no need for a full market investigation.
Let me put my question to the Secretary of State again. Does he feel that Ofgem should remain as it is, or does he agree with me that we need to abolish it and establish a new, tougher regulator? Markets must have rules, and if we are undertaking a proper market investigation, surely it is necessary to consider carefully the process by which those rules are set and how they are enforced. If we win the next election, we will scrap Ofgem and create a tough new regulator, but even those who take a different view must surely now accept that the performance of Ofgem is a legitimate matter for the CMA itself to investigate.
I care about this sector. I want it to do well, to serve its customers well, and to treat its staff well. Given the transition to a smarter, lower-carbon economy, it has the potential to be a massive success story for our country, but if we are to take the country with us on that journey, people must have faith in the market and the regulation that underpins it. There are those who say that politicians should not interfere, but they are wrong. I did not come to this brief with a prepared agenda, but what I discovered about the way in which the energy market works, and the history of its botched privatisation, shocked me. Yes, the energy market is a free market, but a free market works only when there are proper rules to ensure competition and fair play, and it falls to us, as politicians, to set those rules.
Let me make a prediction. The energy market will change: it will be reformed. The public will pay a fair price for their energy, and after that painful process of reform, some of the energy companies will thank us for restoring the public’s trust in their industry. The question before the House, however, is this: will the Government help to make that happen, or will they stand on the sidelines doing nothing? Will they vacillate, play for time, and hope that the problem is kicked into the long grass before the next election, so that fixing it will become the job of another Minister? This is decision time. Will the Government act decisively in the consumer’s interest, or will they fail the test again, as they have done so many times before?
Today we can send a clear message that the days of rip-off energy bills are over. Should we freeze bills until the market is fixed for the future? That is the decision that we now face. There must be no more running away. It is time for the Government to do their job: it is time for them to govern. I urge all Members who care about the unfairness of energy bills to join us in the Lobby this afternoon, and I commend the motion to the House.
When we debated this same topic in November last year, I said that I would welcome every opportunity to debate the best way in which to help people and improve Britain’s energy markets, so I am grateful to the right hon. Member for Don Valley (Caroline Flint) for at last returning to the topic—not least because we took another huge step forward last week with the publication of the first annual competition assessment, an assessment that we had commissioned, and Ofgem’s proposal to refer the energy market to the Competition and Markets Authority for a full market investigation.
We are supporting a step forward for the consumer that the last Government ducked time and again. We now have an independent, impartial, evidence-based, fair and just process for ensuring that the markets are working properly for consumers. I am delighted that the official Opposition have changed their minds and backed us on that, but today I want to address directly the question at hand, which is whether there should be a Government-imposed energy price freeze in the meantime. Quite simply, my answer to that question is no, because it would not work, and, in fact, would hurt the consumer.
We do not need an investment-damaging, Government-imposed, heavy-handed, blanket price freeze anyway, because the markets are already responding to the Government’s actions, sometimes by cutting prices. Following our action at the end of last year to reduce bills by an annual average of £50—a move that the right hon. Lady seemed to oppose yet again today—the rises that were announced by the companies last year have been reduced, and, as a result, all the major energy companies have said that there should be no need to raise prices this year. Some companies have gone further: npower has pledged that there will be no further price rises for customers on standard variable tariffs until at least the spring of 2015, and SSE has said that, owing to the Government’s actions, it will not raise standard variable tariffs until 2016 at the earliest. By acting properly, this Government—unlike their predecessor—have made the energy companies start bearing down on the prices that people pay.
My right hon. Friend mentioned the Scottish and Southern Energy price freeze, which will be greatly welcomed by my constituents. In her opening remarks, the right hon. Member for Don Valley (Caroline Flint) quoted the chief executive of that company. I wonder whether she, and my right hon. Friend, are aware that the company stated clearly last week:
“An externally-imposed 20-month price freeze would not reduce the costs of supplying energy.”
There are many reasons for that, which I hope my right hon. Friend will proceed to enunciate.
My hon. Friend is quite right. SSE’s press release made it clear that its price freeze had come about because of this Government’s actions.
When the energy companies next consider price rises, they will do so in the face of an imminent report by the Competition and Markets Authority, to be published in 2015. We shall then be able to consider, on the basis of proper evidence and tough action and advice from the independent competition experts, how best to reform our energy markets further to help customers. Of course, if there were a huge shift in wholesale prices or network costs between now and that point, we would expect the energy companies to respond, so let us think about what would happen in that circumstance under the Opposition’s plans put forward today. For the sake of debate, let us do a thought experiment.
I think it will have hardly any effect, if any effect at all. The case for shale gas is to do with energy security, as I have made clear many times.
Returning to my thought experiment, let us imagine what would happen if there were a legally imposed price freeze—prices frozen by the state, not by individual firms. What would happen if wholesale prices shot up? Let us say Russia invades Ukraine and gas prices in Europe shoot up. Would a Labour Government keep prices frozen then? I do not know if they are sure themselves. The right hon. Member for Don Valley might want to confirm whether they would keep prices frozen then. Their price freeze is not really a price freeze; it is a con. Let us assume, however, that whatever happened to wholesale gas markets and prices, they would freeze prices. The truth is that would hit the small players and play into the hands of the big six. As Ian McCaig, chief executive of First Utility, the largest of the new independents, said:
“Bluntly, it could put me under… How am I going to absorb those costs? I only retail, I don’t generate. The answer is, I can’t.”
I think it was Harold Macmillan who said, “Events dear boy, events.” Of course there will be major events—ones that we could not predict at this moment—but I know the right hon. Gentleman to be an honest gentleman so he must acknowledge that the real difference—it changed the whole momentum of this debate—was the speech at the Labour party conference by the Leader of the Opposition.
That is simply not true. We were reforming the markets from day one because we had inherited the big six from the Labour party.
Let us return to the small independent competitors. In its response to Labour’s Green Paper, Good Energy said:
“The proposed price freeze poses a disproportionate impact for smaller companies such as ourselves as we do not have the same level of vertical integration as the big 6 which allows us to control our costs.”
If raw energy costs rise during a freeze, vertically integrated firms with deep pockets can withstand a profits squeeze, but smaller, retail-only firms would go bankrupt. Result: reduced competitive pressure on the big six and higher overall prices when the freeze comes to an end.
There is a limit, of course. The right hon. Gentleman ought to follow this debate more closely. Indeed, we have reduced subsidies and our policy is to reduce them still further.
The truth is that, rather than helping consumers, Labour’s price freeze is a pro-big six policy. For all the bluster about taking on the big six, the right hon. Member for Don Valley is just playing into their hands. If Labour makes the smaller competitors go bankrupt, the people who will enjoy that are the big six, and the right hon. Lady knows that.
As part of the right hon. Gentlemen’s thought experiment, has he considered how far down the curve the very large energy companies purchase the bulk of their forward energy supplies and the relationship between that forward purchase and small energy companies purchasing on the back of larger purchases than necessary for the obligations of the large energy companies? How does that fit in with this thought experiment about small energy companies going bust if large energy companies are buying so far ahead of the curve?
It fits in exactly, and I am delighted that the hon. Gentleman has raised that point. The larger companies can buy 18 months ahead, so if there is a rise in wholesale gas prices, they are hedged—they are protected. The smaller companies find it much harder to buy ahead, so if the wholesale prices go up, they get crushed. That is the truth about Labour’s policy. It may seem popular in Labour’s focus groups, but I am afraid it has not been thought through. As The Guardian said, it is “good politics”, but it is “bad policy”.
I am not sure whether the right hon. Gentleman’s thought experiment had started when he drove his Energy Act 2013 through Parliament, which he certainly took plenty of time to do. Can he point to one single measure in that Act which has increased and supported competition?
I am glad that the hon. Lady has mentioned the Energy Act 2013, because she voted for it. If she looks at the detail, she will see that not only did it reform Ofgem by giving it more powers to grant compensation to consumers who were badly treated, but it supported Ofgem’s retail and wholesale market reforms by having reserved powers to make sure they went through. Those powers are in place and are making sure those reforms go through.
I was talking about Labour’s bad energy policy, and let us look at its record in government on energy markets and prices. In the retail markets, Labour allowed the big companies to choke off proper competition—the very competition that privatised markets need in order to operate in the interests of consumers. It created Labour’s big six—the big six that dominate retail and wholesale markets.
As I said in my speech, when we left government there were 18 suppliers including the big six, and also it was under Labour that we gave the first opportunity for people to switch. Is it not the case that there were more than just six suppliers when we left government? Is it not also the case, as confirmed by the House of Commons Library, that energy bills have risen three times faster under this Government than under the last Government?
I will come to that point in a second because I do not believe that is true; I have got completely different figures. The right hon. Lady is right to say, however, that it was not just the big six who were competing in the retail market. There were at that time eight other independent suppliers—there are more now, as we have increased the number. However, the critical figure is not the number of energy suppliers, it is how many customers they have. Under Labour, the small suppliers were not able to grow. Very few—only one, I think—had more than 100,000 customers, and they were not able to expand. What we did very early in our time was deregulate, and because we deregulated, those independent suppliers were able to grow their customer base. So it has been the actions of this Government that have increased the competitive pressure on the big six—it is nothing to do with the last Government.
On the issue of competition, in 2009 Ofgem introduced licence lite, the purpose of which was to enable small community generators to use the local grid in order to access customers directly. Since then, however, no permits have been issued, and the community energy generators still have to rely on selling their product through the national grid at wholesale prices. Does my right hon. Friend agree that in order to boost competition in this sector, which is the obvious answer in terms of prices, those community energy generators should have guaranteed access to the grid at an agreed fee so that they can benefit from doing deals directly with local customers?
My hon. Friend is right: the licence lite introduced under the last Government has not been working very well. However, the Greater London authority has been talking to Ofgem to see if it can get a licence lite for London in order to help community generators and act as a sort of enabler. When we were drawing up the community energy strategy—which has not been mentioned in a single question from Opposition Members—we sat around the table and looked at this issue and we realised that this needs to continue further. So if my hon. Friend looks at the community energy strategy, he will see that we are taking action. We have set up a working group to look at it—not just to take on the licence lite issue, which was so badly handled under the last Government, but to see what else we can do to help precisely the people my hon. Friend is talking about. [Interruption.] The right hon. Member for Don Valley says from a sedentary position that Ofgem is failing again. Let us remind the House who set up Ofgem: it was Labour. Let us remind Labour and the rest of the House that when the Leader of the Opposition was doing my job, he reformed Ofgem to make it function more in the interests of the consumer. That was just a few years ago, so perhaps the right hon. Lady will tell us what went wrong with Ofgem under Labour.
As everybody knows, Ofgem was a merger of the gas and electricity regulators. The difference between the Secretary of State and me is that I am prepared to acknowledge when things are not working, and he is not. When is he going to stop defending a regulator that has not been doing its job?
This is good—let us examine what the right hon. Lady wants to do. She wants to abolish a regulator quango and replace it with another one. She promises lots of tougher powers but never tells us what they are. We have legislated in the Energy Act 2013 to increase the powers. She needs to tell us why, under this Government, Ofgem has been far more proactive on competition. Why was it that under this Government, Ofgem undertook the retail market review? Why was it that under this Government, it addressed the wholesale market, and when we debated its reforms the right hon. Lady had to admit that she had not even read its paper?
Honestly, the Secretary of State is just living inside his own thought bubble. We have made very clear on countless occasions some of the changes we would expect to see under a tough new regulator, as I reiterated today. One significant power would be that if our regulator saw that reductions in wholesale costs were not being passed on to the customer, there would be a statutory power to enable it to force them to be passed on if the energy companies do not play ball. Does the right hon. Gentleman agree with that?
I agree with the market investigation reference looking at all those issues. Not only is the Labour party’s policy position behind the curve, as I will explain in a second; it wants to pre-judge the outcome of the conclusion reached by the competition authorities. We have expert, independent competition authorities that will look at these issues in a considered way, but Labour wants to pre-judge them. That is not surprising, however, because its policies in this area are so hopeless.
The right hon. Lady talks about a pool. She does not know that the day-ahead market, which is very much like a pool and was trading only 5% of electricity when Labour was in power, is now trading over 50% of electricity—a massive increase in liquidity in the day-ahead market. Moreover, the Ofgem analysis, which the right hon. Lady clearly still has not read, shows that the small independent generators that would benefit from more liquidity said that the problem is not in the day-ahead market, and that the pool would not help; rather, the real problem is with the liquidity in the forward market, and that is exactly what Ofgem is dealing with. As of this month, the market maker obligation will create far greater transparency than ever existed in the markets under the last Government. Whether it is through Ofgem or this Government, we are taking action—real action—to bring in competition where Labour did nothing.
The Secretary of State talks the talk on competition. I know he is a Liberal Democrat, but does he not regret that the Energy Act, which took more than a year to complete its legislative passage, did not contain a single concrete measure to improve competition in the wholesale or retail energy markets?
That is simply not true. I have talked about the powers to back up Ofgem on the retail market and wholesale market review, which clearly the hon. Gentleman either does not understand or did not notice. For example, there is the power of the off-taker of last resort to promote greater competition in the generating market. I do not know where Labour Members have been, but they certainly have not been focusing on the debate.
The right hon. Member for Don Valley asked me about energy prices under the last Government and this one, so let us go through them. We should not fall into the trap of simply blaming the energy markets and Labour’s big six for higher energy bills. Let us be honest: everyone in this House knows that the main driver of energy price rises in recent years has been rising wholesale costs. The average wholesale gas price in 2013 was more than double that of 2007. [Interruption.] I will say that again, because the right hon. Lady was not listening. The average wholesale gas price in 2013 was more than double that of 2007. The wholesale electricity price was up by almost two thirds. According to DECC statistics, in almost every year under Labour, energy bills rose. Under Labour in 2005, energy bills went up by 12%. In 2006 under Labour, energy bills went up by 20%. In 2008 under Labour, energy bills went up by 16%. In the last Parliament under Labour, energy bills rose by a whopping 63%. In this Parliament, yes, they have risen, but at a significantly lower rate than in the last Parliament, when the current Leader of the Opposition was Energy Secretary—8% a year in this Parliament compared with 11% a year in the last.
I asked the House of Commons Library to look into this issue on Monday, and it confirmed that energy bills are rising more than three times faster under this Government than they did under the last Government. The Office for Budget Responsibility has shown that prices are rising at twice the rate of inflation. We can bandy around figures all we like—the truth is that people want fair prices. They are prepared to pay a fair price if they think the market is not fixed, and the Secretary of State has failed to attempt to deal with that situation, which is of great concern to the British public.
The problem with the right hon. Lady’s analysis is that she fails to understand that the wholesale gas market drives the vast majority of the bill. I set out that history to show that when wholesale gas and electricity prices were going up—actually, faster under the last Government than this one—we were not saying that it was all the fault of the energy companies; a lot of the fault lay with wholesale gas and raw energy costs. Frankly, the right hon. Lady’s unwillingness to recognise that demeans her, because it shows that she is not dealing with the real problem and could not really do the job.
The right hon. Lady is absolutely right in that, as the recession took place there was a period when wholesale gas prices plummeted, because the economy was in such a mess that the demand for energy was reduced. However, she ought to be careful about going too far on this issue.
Whatever the price rises are, there is a problem for consumers. We know that incomes have fallen as we have emerged from Labour’s great recession, and the fact that price rises have been slowing will be of little comfort. I can, therefore, understand why a promise of a blanket, Government-imposed energy price freeze might seem popular, but as I will demonstrate, it is not a price freeze but a con.
At no point have the Opposition explained how their proposal would actually work, so let us try to get to the bottom of their thinking with a few questions. Are they proposing to freeze all current tariffs in their existing state, in real cash terms? Would people be able to switch back from a higher but longer fixed-rate tariff to a lower, variable-rate tariff before that variable rate became fixed by law? If a cut-price deal was set to end during the freeze, would suppliers be forced to continue it until the freeze ends, penalising firms who try to help their customers?
We know the problem for smaller competitors if wholesale prices rise. They tell us that they would go bust under Labour’s energy price freeze. But what if wholesale prices fall during the freeze? Is Labour proposing to prevent firms from passing