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Wholesale Energy Prices

Volume 602: debated on Thursday 19 November 2015

2. What assessment she has made of the effect of recent trends in wholesale energy prices on household bills. (902219)

16. What assessment she has made of progress by the major energy suppliers on reflecting wholesale gas prices in consumer bills. (902235)

Lower wholesale gas and electricity costs have contributed to the price of fixed-rate dual fuel tariffs falling by £100 compared with last year. Average domestic gas prices have reduced by 6.5% since the start of this year. All the major energy suppliers have reduced their standard gas tariffs at least once this year. The Government expect suppliers to make sure any reductions in the costs of supplying energy are passed on to consumers.

In order to keep household bills down, it is vital that we invest in energy infrastructure. Does the Secretary of State agree that the proposed IFA2 interconnector station at the Daedalus airfield in Gosport, which will connect to Chilling in Fareham and provide a second electricity link between Britain and France, is a welcome development that will make a positive contribution to affordability and sustainability?

My hon. Friend is right to say that interconnection can bring important, significant benefits to consumers by enabling access to cheaper electricity overseas, lowering household bills and supporting security of supply. The IFA2 project, along with others involving France, Norway, Belgium, Denmark and Ireland, is progressing through Ofgem’s regulatory regime, which is designed to bring forward interconnector investment in the consumer interest.

Rising wholesale energy prices have a particular impact on the elderly, with an estimated 540,000 older households in fuel poverty in recent years. Evidence shows that a large number of elderly people are prevented from switching to cheaper tariffs, which can be found only through online comparison sites, because they simply do not have access to the internet. What is the Department doing to ensure that the major energy suppliers are making their cheaper tariffs accessible to the most vulnerable in society?

My hon. Friend makes an important point. Switching is an important way to save money and reduce costs, and there is a huge choice available online. However, there is a problem for people who are not online, which is why my Department has funded, for the third year, the big energy saving network. The network provides funding for direct face-to-face advice, targeting the most vulnerable in society to help them through the switching process and ensure that they access the cheapest tariffs.

Household bills in this country will never be manageable until the Government understand that it is not just the wholesale unit price of energy that matters, but the number of units each household needs to buy. We can make massive bill reductions with energy efficiency, and we can also end the scandal of so many British children going to bed tonight in cold homes. We have to do this. Ministers have promised me action for many years at the Dispatch Box. This Government’s record is abysmal. Come on, Secretary of State, let us do this for Britain.

I do not agree with the hon. Gentleman’s conclusion, but I share his view that energy efficiency is an incredibly important way of saving money and helping householders. One of the most important ways of doing that will be through smart meters. Once people can access and see how much energy they are using, they will be able to use less of it. We are proud of the smart meter roll-out. We expect every household and business to have one by 2020.

I spoke to the Secretary of State about this beforehand. Yesterday, I met Age UK, which informed me of its concerns about the lack of energy efficiency schemes for those living in park homes. Ever mindful of the fact that the age of those living in park homes is from 55 upwards to perhaps 80, if she wants to make efficiency savings for them, she could reduce prices. What has been done for park homes?

We addressed some of the issues that are particularly challenging to park homes in the fuel poverty targets under the previous coalition Government. I agree with the hon. Gentleman that more needs to be done. It is particularly difficult for park homes without electricity meters. Those with electricity meters can access support, but the ones without them find it more difficult. I will certainly take that matter away and review it.