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Energy Bills

Volume 589: debated on Thursday 18 December 2014

Mr Speaker, with permission I will answer this question with questions 3, 7, 10, 15 and 16.

There are three main ways in which we help people with their energy bills: first, with money, to help vulnerable customers with their energy bills with policies like the winter fuel payment, the warm home discount and cold weather payments; secondly, by helping people save energy and so cut their bills with policies like energy efficiency, product regulations, the energy companies obligation and the green deal; and, thirdly, by making our energy markets more competitive, where our reforms have seen the market share of smaller independent companies grow from less than 1% in 2010 to 10% today, enabling people to save hundreds of pounds on their bills by switching supplier.

Order. The Secretary of State may have been reading from an old list. It is important to have an updated list, and he ought to be able to look to people to provide him with an updated list. This is very unsatisfactory. The grouping is with 6, 9, 14 and 15. We really must get these things right.

The price of oil has been coming down quite dramatically in recent weeks. This opens up the prospect of lower prices, particularly for people who live off the gas grid. What is he doing to ensure that companies selling to those consumers bring their prices down to help them with their heating bills this winter?

First, Mr Speaker, I apologise for not getting the list of questions right. My hon. Friend the Member for Argyll and Bute (Mr Reid) makes a good point. We expect heating oil companies to pass on the savings they are making. They do not hedge in the way that electricity and gas companies do in relation to the long-term forward markets; I understand that heating oil forward purchases are done on a much shorter time scale. We would therefore expect reductions in the price of oil to be fed through much more quickly.

It is all very well to talk about making the energy companies reduce their bills, but does the Secretary of State not agree that it would be a lot more effective if the regulator had the power to force them to bring prices down, as Labour is proposing?

Actually, it was the last Labour Government who got rid of price regulation from the regulatory tool book. This Government have supported the referral of the energy market to the independent competition authorities. That is a policy that the last Government—and the present Leader of the Opposition when he was doing my job—failed to pursue.

Does the Secretary of State share my concern about the annual fuel poverty statistics report, which shows that the fuel poverty gap—the difference between people’s bills and what they can afford—has grown to £480 in 2014? That is a shockingly worrying statistic, and the real story behind it is being told in the homes in our communities. Does he agree that it is now time to back Labour’s energy market reforms?

Fuel poverty needs to be tackled thoroughly, which is why we are bringing forward ambitious fuel poverty targets and a new fuel poverty strategy. Opposition Members should note that fuel poverty has actually fallen under this Government, whereas it rose under the last Government. That suggests that we should not be taking advice on energy policy from the Labour party.

Households with a disabled member have high fuel poverty levels, but working-age disabled people are not always able to access warm home discount schemes. In bringing forward a fuel poverty strategy, what will the Secretary of State do to ensure that that vulnerable group is protected?

We have a whole panoply of measures to help vulnerable people, as I set out in my original answer. Some of the wider policies that we are implementing, particularly those relating to competition, are helping people across the board. We are in discussions with other Government Departments, particularly the Department for Work and Pensions, in relation to the point that the hon. Lady has raised.

It is not just heating oil prices that have fallen. Wholesale gas and electricity prices have fallen significantly in the past year, yet consumers have seen little reduction in their bills. Does the Secretary of State now regret voting against Labour’s motion on 18 June, which would have given powers to the regulator to ensure that when wholesale costs fell, the reductions were passed on to the consumer?

It is interesting to look at the history of wholesale prices coming down and reductions not being passed on. There were much greater falls in wholesale costs when the Leader of the Opposition was doing my job, and they were never passed on. This Government have taken action by giving consumers far greater choice. They can now switch from companies that are not offering them a good deal and, in some cases, cut their bills by hundreds of pounds.

Does the Secretary of State agree that the best way for the Government to keep energy bills down is to stop subsidising working windmills? We are now subsidising those that are providing energy when the windmills are not working. Instead, we should get cracking with fracking.

That is a good soundbite, but I have to tell the hon. Gentleman that his understanding of how these things work needs a little work. It is important that we have an energy mix. That encourages greater competition as well as enabling us to tackle all our energy objectives, including keeping bills down and ensuring that we cut carbon and have secure energy.

The Minister is right to say that the number of households in fuel poverty has fallen every year since this Government came to power in 2010. However, those who are affected the most are the poorest families living in energy-inefficient homes. Will he tell us what steps are being taken to help that vulnerable group of people?

My hon. Friend is absolutely right; energy-efficiency should be at the heart of our policies. Our new fuel poverty target is focused on energy-efficiency for the very reasons he outlined. I can tell him, and announce to the House today, that up to October this year the green deal and the energy companies obligation have together led to more than 1 million energy-efficiency measures being installed, producing permanent reductions in energy bills, this Christmas and every Christmas.

I wish to place on the record the contribution of the warm home discount scheme to Thirsk, Malton and Filey. Does my right hon. Friend agree that it would have been particularly ill-advised to have frozen energy prices at the time a certain party was recommending that policy?

Indeed, one danger of the regulatory approach is not only that it discourages investment and reduces competition, but that one can freeze prices at a high level. The benefits of competition and falling wholesale prices will mean that bills will come down—indeed, people can save on their bills through the competition we have stimulated.

Members on both sides of the House recognise that some of the households with the highest bills are in the private rented sector, where we simply have to raise standards. We want to go further than the coalition, but the Secretary of State has repeatedly assured us that the coalition Government will act to improve the very worst homes by 2018. May I therefore ask him, straightforwardly, whether this Government will introduce the regulations on the private rented sector before the end of this Parliament? If not, why not?

I share the hon. Gentleman’s view that it is very important to get energy-efficiency in the private rented sector—something that the previous Government failed to act on. We have legislated in the Energy Act 2011, we have consulted on this and we will be making proposals.