Skip to main content

Energy Bills

Volume 587: debated on Thursday 6 November 2014

Despite the energy price freezes this year, which were delivered by competition, not regulation, energy bills remain a huge concern for many people this winter. That is why the Government have delivered a £50 cut in the average energy bill by reducing our own policy costs, why we have introduced the warm home discount, to take £140 directly off energy bills this winter for 2 million households on low incomes, and why we have permanently trebled cold weather payments, to provide £25 for every week of a cold spell.

As the promoter of the Warm Homes and Energy Conservation Act 2000, I am very keen on any efforts to reduce fuel poverty. Given that switching energy suppliers could make a useful contribution to that end, will the Minister please update the House on how we are progressing with the policy of 24-hour switching, and might it exclude political parties?

First, may I pay tribute to my hon. Friend for the work he has done on fuel poverty? It is something that is very close to my heart. We have done a huge amount in this Government. We will shortly be publishing the first fuel poverty strategy in over a decade. With regard to switching, we are seeing huge progress. I challenged the large energy companies to halve switching times by the end of this year, and that is on track. Indeed, some of the smaller companies will achieve that by the end of the year. Ofgem is currently consulting on an idea I have pushed for 24-hour switching, linked to smart meters, and we expect a decision next year.

19. Consumer electricity prices went up by 4.4% and gas prices went up by 3.5% between April and June this year, but the price paid by major energy firms for coal fell by 12% and for gas it fell by a massive 21% over the same period. Why does the Secretary of State not act to ensure that cuts in wholesale prices are passed on to consumers? (905937)

I share some of the hon. Lady’s concern about that. Sustained falls in wholesale energy costs should be passed on to consumers. While we have seen some fixed-price tariffs come down, standard tariffs in the main have not, which is why I supported the regulator’s warning to suppliers this summer. When the Leader of the Opposition was doing my job, wholesale electricity prices fell by 62.5%, and what did he do? He called a summit.

One of the best ways to help struggling households with bills is to improve energy efficiency, so will my right hon. Friend update the House on what progress is being made in implementing the minimum energy efficiency standard in the private rented sector?

I am grateful to my hon. Friend for his question, because that is something I have been pushing for strongly. We have had a consultation, which has now concluded, and we are analysing the responses, which have been very positive about our proposals for minimum energy standards in the private rented sector. We will update the House in due course.

The Minister knows that many of us think that smart metering can deliver real energy efficiency to the consumer, but are the Government not getting themselves into a bit of a mess? First, it will no longer be compulsory, so it will be more expensive. Secondly, will he be very careful, because the technology is changing very fast? Much of the early smart metering is already out of date because of the innovation of companies such as Nest and Hive. Will he look at that carefully in case we end up spending £20 billion on the wrong technology?

We have looked at this very carefully, taking on the programme started by the previous Government. The hon. Gentleman will understand that the smart metering equipment technical specifications—SMETS 1 for the first generation of smart meters and now SMETS 2—set a minimum floor for standards, but of course we are seeing energy companies, through the competition we put into the implementation, actually compete on improving the technology, so there is room for innovation over and above the standards that have been set.

What progress is my right hon. Friend making in addressing the particular disadvantages faced by park home owners, who are unable to access a social tariff or the green deal and yet are people on very low incomes, for the most part?

My right hon. Friend has been a huge champion of park home owners over a number of years, and I pay tribute to her for the work she has done. Partly due to the contribution she has made, we are looking at this issue in some huge depth. I hope to be able to report to the House before Christmas or early in the new year on the ideas that we have to tackle those issues.

One of the largest components of an energy bill is distribution costs, which are rising while other wholesale costs are coming down. The nations and regions across the United Kingdom have varying prices. Does the Secretary of State agree that there should be a smoothing of this so that we can have fair pricing across the United Kingdom, because many periphery areas, including mine, that produce the electricity are paying more for it due to these distribution costs?

As the Minister of State said to the departmental Select Committee, of which the hon. Gentleman is a member, the Government believe that we should look at this issue. However, let us be clear: if we were to socialise the costs across the UK, other people would be paying more, so it is not quite as simple as he suggests.