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Energy Price Cap

Volume 626: debated on Tuesday 27 June 2017

Our manifesto said that

“we will introduce a safeguard tariff cap that will extend the price protection currently in place for some vulnerable customers to more customers on the poorest value tariffs.”

I stand by that commitment.

The lived experience of many people in Hull West and Hessle is that the Conservative party has done nothing to fix the energy market for the past seven years. Although I welcome the Government’s move and transformation from calling an energy price cap Marxist and extremely dangerous to copying it, is the Minister facing calls to water down that policy either from the big six or from his own Back Benchers?

I welcome the hon. Lady to the House; she follows a distinguished predecessor. I would perhaps invite her to reflect on her own party’s history in this matter—the former Leader of the Opposition was the Energy Secretary and failed to do anything whatever about it. I have been clear about the commitment that we have made, and we will see it through.

Imitation is the sincerest form of flattery. To misquote Caroline Aherne’s question to Debbie McGee, what first attracted the Secretary of State to Labour’s financially astute, socially just and politically responsible energy price cap?

I welcome the hon. Gentleman back. What he describes as an energy price cap was launched as an energy price freeze. The problem with that was that as energy prices fell, consumers would be paying more than they needed to. That would have been disastrous for them, which is why the proposal that we have made, in response to the Competition and Markets Authority analysis, is a much more sensible approach than we got from Labour.

As we have heard, various media outlets have reported recently that senior Cabinet members were lobbying for the Conservative price cap manifesto commitment to be dropped. Indeed, the Secretary of State’s recent letter to Ofgem was silent on the price cap element and, when questioned last week, the Prime Minister refused to confirm unambiguously that the price cap would be upheld. Will the Secretary of State confirm for the avoidance of doubt that he will implement the promised price cap, and not just stand by it, to deliver to 17 million customers the £100 saving that his Prime Minister promised?

I welcome the hon. Lady back. It is very good to see her back in her place. I did not hear her name chanted at Glastonbury and it is probably unparliamentary to do it here, but I warmly welcome her back. I have been very clear and the Queen’s Speech is very clear. It said, in terms:

“My government will ensure fairer markets for consumers, this will include bringing forward measures to help tackle unfair practices in the energy market to…reduce energy bills.”

I am afraid it is not clear. The Secretary of State’s recent letter to Ofgem simply asks it to advise him of the action it intends to take to safeguard customers on the poorest value tariffs. It was not a direction to implement a price cap. Can the Secretary of State confirm that should Ofgem not take directions to implement a price cap, or if it directs a price cap that is narrower than the Conservative manifesto commitment, he will legislate to uphold his party’s manifesto commitment and, if so, when?

The powers that I have are to ask Ofgem to move in this way, not to order it; Ofgem is independent. As there is a strong body of opinion on both sides of the House that the detriment that consumers have been suffering should be put to an end, I would have thought that the hon. Lady welcomed it being put to an end as soon as possible, rather than waiting for legislation to pass through the House. Ofgem has those powers and I believe it should use them.