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Energy Tariffs

Volume 604: debated on Thursday 7 January 2016

The Government are making it quicker and easier for energy consumers to switch supplier and move to the best-value tariffs. We have delivered a national switching campaign and worked with industry to cut the time it takes to switch to 17 days, and we are now working with Ofgem to move to reliable next day switching. We are also working with industry to develop an energy-switching guarantee, which will be launched later this year.

Does my right hon. Friend agree that it is particularly important for vulnerable customers to be able to find the best-value tariffs? Will she say a little more about what the Government are doing to spread that message and to ensure that such consumers get the best deals available? Does she agree that carers’ organisations and children’s centres, which support vulnerable younger families, may have a role to play?

Yes, I do agree with my hon. and learned Friend. It is absolutely essential that we improve access for vulnerable people to the switching that can provide such great benefits. It is no good people being able to benefit from a saving of about £200 on their energy bills unless they can actually access it. We launched the big energy saving network and put in £2 million to make sure that vulnerable people, who particularly need the improvement that this can deliver to their energy bills, can access it. One of the ways in which that can be done is through citizens advice bureaux, but in addition we will look at his other suggestions.

But the Competition and Markets Authority has identified something I have been speaking about for quite a long time: that that sticky customer base is not being served well by energy suppliers. The CMA has said that about 70% of customers on the standard variable tariff are paying over the odds, so has the Secretary of State looked into the suggestion I have made in the past year and previously that we need to protect those customers as well, and that a default or protection tariff could ensure that suppliers provide tariffs that are fair to their customers, and particularly those ones?

The right hon. Lady makes an important point and the suggestion about the CMA is helpful—it has just begun to include in its consideration vulnerable customers on pre-payment meters. We are interested in the recommendations it will make—we hope—in the next few months, to ensure that we look after those vulnerable customers who are unable to switch. We have said previously that we will take seriously and act on the CMA recommendations to ensure that we look after those customers who have not engaged in switching but should do so. We look forward to seeing the CMA suggestions for remedies.

I welcome the concern expressed by Members on both sides of the House for consumers and best value. Last month, the Secretary of State agreed to hand out hundreds of millions of pounds in new public subsidies to diesel and coal power generators through her capacity market scheme. Will she tell the House by how much family energy bills will rise as a consequence?

The capacity market is specifically designed to ensure that energy security is not negotiable. The Government take energy security very seriously. Because of the lack of investment in energy infrastructure over the past decades, we needed to ensure that the capacity market is in place to ensure that we do not have any problem at all with energy security. Diesel will form a part of the future, but only in very small amounts. Let us remember that it is there as back-up and will be switched on occasionally when it is needed. The addition of the capacity market to people’s bills will be a matter of a few pounds.

It is astonishing that the Secretary of State comes to the House and repeatedly says that the Government want to put as little pressure as possible on hard-pressed households, and yet is spectacularly unable to answer a very simple question about how much that will put on family energy bills. In just one day in December, she agreed to subsidise high-polluting diesel generators to the tune of £175 million, paid for by increasing family energy bills. Will she answer this question: are those companies expected to make returns of more than 20% at the expense of bill payers?

What is astonishing is the hon. Lady’s lack of understanding of the fact that the capacity market is needed because of the Labour Government’s woeful under-investment in infrastructure. We are left with the consequences and need to ensure that energy security is completely reliable. The capacity market is essential to ensuring that that hole is filled. We are proud of the way in which it has delivered—the second auction has just completed. As I have said, it will cost a few pounds—under £10—and we will ensure that energy security will never be in question under this Government.