This all has to be paid for—that is the economic inevitability. History shows that price fixing does not work and damages the economy in turn. The willingness of the right hon. Member for Don Valley (Caroline Flint) to interfere with the market would unsettle other sectors, break some smaller suppliers such as First Utility, which was promoted with the switch of the

6 Nov 2013 : Column 309

Leader of the Opposition. The supplier has gone public and explained that its most famous customer’s policy would put it out of business.

The UK energy system clearly needs modernisation and massive investment. The proposed price freeze increases the political risks for this country and for its new investors. All of this will put up long-term prices—the consumer will pay. Any Government who freeze prices would undermine the role of the independent regulator, Ofgem, and no doubt would succumb to the temptation to recruit their own staff of bureaucrats and inspectors to enforce their policy.

We should ensure that Ofgem does its job; keep up the pressure on the big six suppliers; look at encouraging more new entrants; do lots more to save energy in the first place; get a fair deal for people on pre-payment cards and meters; ensure that consumers receive bills that they can understand; support the development of many more green energy provisions on a local basis such as the Wedmore power co-operative solar array, which opened this weekend in my patch; and make it swift and easy to switch suppliers.

Finally, it is unclear whether the shadow Secretary of State was advocating a windfall tax rather than a price freeze. However, such a tax seems to be a better idea by far as there would be an opportunity to redistribute any windfall to those who need the most help. Every pound spent to support those with disproportionately high bills, particularly on energy-saving measures for those very households, is a pound well spent. Planning a price freeze demonstrates a lack of understanding of business, and shows the impact of interfering in this market, which would cost consumers more, not less.

3.58 pm

Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): This is the first time I have had the privilege of speaking under your chairmanship, Madam Deputy Speaker, and I am delighted that you are a Deputy Speaker.

We have had an interesting debate. I am sorry that the Secretary of State has left the Chamber, but I note that he apologised for doing so. I found it astonishing, however, that he asked for consensus, but went on to make one of the most provocative speeches that I have ever heard in the House, particularly on a subject where he is on a weak wicket. I can imagine going round my constituency speaking to elderly folks and people with disabilities, and people—far too many—suffering from fuel poverty and saying, “Well, we’re not doing anything about the cost of energy, but we’ve reached consensus.” I do not believe that consensus can be reached because, like many of my hon. Friends, I have been involved in these issues for more than 10 years. If right hon. and hon. Members have a minute or two, they might want to study the debate that I secured in Westminster Hall on this subject on 23 January 2007, in which the hon. Member for Wealden (Charles Hendry) made a good speech. I have to say, with respect, that I do not recall quite the emphasis on investment that we heard today; nevertheless, I cannot take away from him the points that he made on that occasion.

6 Nov 2013 : Column 310

A few weeks later I put a question to our own Prime Minister, Tony Blair, on 7 February 2007, and by a remarkable coincidence prices fell the next day. I am not sure that this speech will have the same effect, but I will make the points that I want to make and that, I am sorry to say, are not new because I and others have made them so often. That is why I do not believe that consensus is possible.

I support the motion before the House and the proposition from my right hon. Friend the Leader of the Opposition and colleagues on the Front Bench. It resonates with long-suffering consumers. The commitment to a price freeze is absolutely right, and the fact that it is new, even from those on my own Front Bench, whether in government or in opposition, does not take away from its validity.

Mr Jim Cunningham: Does my right hon. Friend recall that under the previous Conservative Government a big battle went on in the House one Friday morning, especially among Members of the governing party, in relation to an increase in cold weather payments that the then Government would not concede? Does my right hon. Friend recall that it was a Labour Government who created the Department of Energy and Climate Change, which the Minister represents? The Government say that the Labour Government did not take these matters seriously. We did, and we introduced housing insulation for the less well-off.

Mr Clarke: As always, my hon. Friend makes a valid point. I know that he represents Coventry South, but as he comes from Coatbridge, I am not surprised at the logic that he introduces to the debate.

I support the motion before the House. I do not believe that some of the ideas that we have heard from Government Members, including from the Secretary of State, about tinkering around the edges, transferring green taxes to general taxation and other measures that have been mentioned for over a decade would necessarily work. We heard yet again about switching. Well, I hope it works this time. On previous occasions the experience of my constituents has been that no sooner did they switch to one company than that company put up its prices. There was therefore very little point in them taking that advice. I question whether switching will work now.

Given the seriousness of the problems, there is a call for transparency. The veil of secrecy that exists in the energy industries is wholly unacceptable in the modern world, with the massive profits of energy companies and increasing fuel poverty. The energy markets are utterly broken. Surely we as a Parliament are not prepared to accept that without protest, and why should our constituents do so?

In the Government’s response to today’s debate a great deal of faith was placed in the regulators, but I do not share it—not for one second. In the debate that I mentioned at the start of my speech I had quite a lot to say about the regulators.

Mr Nigel Dodds (Belfast North) (DUP): Rural areas and places such as Northern Ireland are heavily dependent on home heating oil, which means that energy bills are 50% higher on average than even the high bills that people in Great Britain are suffering, but there is no

6 Nov 2013 : Column 311

regulation of that sector of the energy market. Does the right hon. Gentleman agree that something needs to be done to help those families who are particularly hard hit by very high energy bills?

Mr Clarke: The right hon. Gentleman makes an excellent and very valid point.

That part of the motion relating to the regulator is very important. I do not believe that Ofgem has done the job it was expected to do, no matter who set it up. I have met Ofgem, written to it and listened to what it had to say. It responded to one of our representations on 1 January 2007, the day after Hogmanay—Scots Members will understand what I mean—by issuing a press release stating that if the energy companies, the big six, continued what they had been doing, in its view they would have “jam on their fingers”. Given the figures on hypothermia even then—I will mention those later if I have time—it should have spoken much more strongly.

We are entitled to ensure that the public are no longer duped about the actual cost of energy. I would have expected that to be the role of a proactive regulator. For example, the four major companies that have raised prices blamed wholesale prices, green levies and network costs for the latest bill increases of between £100 and £150, which have led to an average bill of £1,400 a year. In 2010 npower’s electricity wholesale prices fell by 13%, but that was not passed on to the consumer, and the average wholesale price fell by 4% in 2011 and rose by less than 2% in 2012, yet the company increased retail prices by 5.1%, 7.2% and 9.1% respectively in those years, and E.ON and EDF behaved likewise. More recently, wholesale energy prices rose by 1.7%, but consumers are facing an increase in their bills of 11.1%.

How can that possibly be justified? How can it be said that the market is working and that if we leave it alone things will work out? I do not know about the word “cartel”, but I know that there appears to be a measure of collusion, and certainly a measure of delivering price demands to customers that cannot be defended. I do not believe that Ofgem is best placed to act in our interests.

I support the commitment to a price freeze and think that it is very welcome. It is right that my right hon. and hon. Friends on the Front Bench should demand action now. I accept that it will take time to sort things out. If we have not done it in the 10 years to which I have referred—we certainly have not—then 20 months is not a very long time to have the kind of open debate and consultation about energy that I believe the British people are entitled to expect. I also congratulate North Lanarkshire council on its commitment to its house insulation programme.

I realise that many of these things are happening because of the austerity that exists in Britain today. Nevertheless, unless we have an energy strategy that is fair about prices, the environment, markets and proper regulation, our people will suffer. I do not believe that it is in the interests of right hon. and hon. Member, to allow such a situation to develop or beyond the wit of this Parliament, and indeed this Government, to do something about it now.

6 Nov 2013 : Column 312

4.9 pm

Neil Carmichael (Stroud) (Con): I think that this is the first time I have been in action while you have been in the Chair, Madam Deputy Speaker, so let me congratulate you on your election.

It is a great pleasure to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke). I listened carefully to the hon. Member for Ynys Môn (Albert Owen), and I agree with his views about nuclear power. Nevertheless, I think that the Secretary of State made an excellent and powerful speech that drilled some very big holes in the speech by the shadow Secretary of State.

We have to get three things across straight away. First, we cannot talk sensibly about energy policy without noting that commodity prices across the globe are rising, and it is therefore unacceptable to talk about this in a strictly local way. My hon. Friend the Member for Wealden (Charles Hendry) made that point very powerfully in connection with rising gas prices having affected overall energy prices.

Sir Malcolm Bruce (Gordon) (LD): The hon. Gentleman is making an important point. Does he think that the Labour party may have embarked on a process that will inevitably lead to a comprehensive prices and incomes policy, because when other prices go up, people will look for the same action in those areas? Have not we been there before, and was it not a very uncomfortable space to be in?

Neil Carmichael: That is a good point, and I will deal with it later. I thank the right hon. Gentleman for reminding me to mention it.

Secondly, we cannot talk sensibly about this subject unless or until we understand the economic circumstances in which we live. A lot of people would say that we want lower energy prices, and absolutely we do—the Government are right to emphasise that—but we have to produce some economic growth to help to drive down prices and to drive up wages and salaries where appropriate. We have to get that on the table and well understood.

Thirdly, it is a bit rich for Labour Members to claim that this is all our fault when during 13 years they did not build one single nuclear power station. [Interruption.] They did not, and we have got on with the job. The Government are absolutely right about that.

My main points are these: first, commodity prices are global, and we cannot influence them globally but must respond to them sensibly and locally; secondly, we must consider the economic circumstances; and thirdly, we have the history of failure by the previous Labour Government.

We have to increase capacity, and that is why the Energy Bill is so important. We talk about the big six, but in my constituency we have a large number of small companies and one fairly big one that is not a member of the big six but is a powerful beast nevertheless—Ecotricity, which is busy taking new customers from the big six because of the price rises. That is an example of effective competition being driven, and quite right too, by the arrival of more capacity.

Duncan Hames: I have a small competitor in the electricity supply market in my constituency as well. Does the hon. Gentleman recognise that these smaller

6 Nov 2013 : Column 313

competitors would be disadvantaged during a price freeze because in trying to buy energy on the forward market they lack the collateral that the big six have, and therefore, during that period, the big six would be advantaged over the competition?

Neil Carmichael: The hon. Gentleman is right—that is a perfectly good point.

Luciana Berger: Will the hon. Gentleman give way?

Neil Carmichael: Not yet, because I am dealing with this point. A price freeze simply freezes the problem and does not enable a solution to be introduced. I have admitted that we need to find ways of driving prices down—of course we do—but a price freeze is not the right way because it will prevent firms from responding normally to the market. As the right hon. Member for Gordon (Sir Malcolm Bruce) correctly noted, if we start freezing one thing it is not long before we need to freeze a few more things in order to keep up.

Several hon. Members rose—

Neil Carmichael: I will give way to the hon. Member for Brighton, Pavilion (Caroline Lucas) if she is quick.

Caroline Lucas: That is immensely kind; I thank the hon. Gentleman so much. He talked about the smaller company in his constituency. If it is the one I think it is, its chief executive has said that the reason it was able to keep prices lower was because it had been investing in renewables, not getting hooked up in gas or other fossil fuels. Is that not the conclusion to draw from the hon. Gentleman’s remarks?

Neil Carmichael: That brings me to my next point, which is, ironically, that there is a tension between wanting to have lower prices and protecting the environment. I have often thought that the Department of Energy and Climate Change is both poacher and gamekeeper. We need to continue investing in green energy. I will always promote green energy because my constituency has a lot of important companies that are working extraordinarily hard to develop green technologies. However, we must respond to the price issue as well. That is why the Government are right to calibrate the green taxes more sensibly to reduce prices in the energy market. I get the sense more and more that the Opposition agree that the price freeze is simply idiotic.

I will talk about two other important matters. The first is energy storage. We do not give enough attention to that subject. Energy storage technologies will help and we need to invest in them. I hope that we will see energy storage treated as a capacity in the Energy Bill and that it will be invested in. Liquid air, for example, provides us with an opportunity to store energy and thereby flatten out demand and sort out the trough problems.

My hon. Friend the Member for Warrington South (David Mowat) spoke sensibly about the need to focus on making houses more energy efficient. Of course we must do that. We have the least energy-efficient houses in Europe in broad terms. We have to continue with the green deal. I am delighted that the Minister is promoting that and that it has got off to a good start. We have

6 Nov 2013 : Column 314

to ensure that our houses do not leak energy, but contain it and therefore use less of it. That is one way to reduce bills.

Something that has not been discussed in the debate thus far is competitiveness, not just in this country, but across Europe. In January, the Prime Minister set out the stall for renegotiating our position in the European Union. One of the key points that he made was that we should strengthen the single market in energy. He was absolutely right. We have to recognise that there are lower commodity prices on the continent. We must be able to benefit from those prices. We need to attract investment from the continent and we must invest in the continent so that we have a more competitive and more connected energy policy.

Connectivity is lacking in certain areas. We need more investment in our infrastructure so that we can be sure that whatever form of energy we alight upon can get to the right place in the most cost-effective and efficient way. That is definitely a way to drive down prices. We must set out the stall for increasing competition in the energy market both locally and internationally, with Europe as a target. That would not be a particularly difficult thing to do.

Dr Whitehead: The hon. Gentleman makes an important point about interconnectivity. Will he therefore explain why the Government have specifically excluded interconnections from their capacity market arrangement? Will he be at the forefront of trying to change that?

Neil Carmichael: It is always great to hear from a fellow member of the Environmental Audit Committee. He asks a very good question. [Hon. Members: “Answer the question.”] And he will get a very good answer. I am referring to connectivity across Europe. I do not think that the remit of the Energy Bill extends that far. There is not sufficient connectivity between England and France. There is no connectivity between Norway and—

Dr Whitehead rose—

Neil Carmichael: No, the hon. Gentleman has had a fair crack of the whip.

In summary, this is about powering through with more competition and ensuring downward pressure on prices, while recognising the global and economic challenges we still face, even though they are being rapidly dealt with by the Government. We cannot talk about a subject as critical as energy without considering those other issues—that is the key point on which I shall conclude.

4.20 pm

Simon Danczuk (Rochdale) (Lab): It is a delight to follow the hon. Member for Stroud (Neil Carmichael); I cannot think of anybody I would rather follow in this debate. I thank my colleagues for initiating this important debate. I want to use this opportunity to talk about my experience and that of my constituents when dealing with energy companies.

I welcome the proposal from the leader of the Labour party to freeze energy bills, certainly for consumers but very much for businesses as well. In my constituency I meet businesses on a regular basis that have been treated appallingly by energy companies and/or their brokers. Businesses have been expected to put down unrealistic bonds or deposits so that they can get energy, and they

6 Nov 2013 : Column 315

are also being conned—quite literally—into energy deals that are wholly inappropriate for them. Action needs to be taken.

Let us consider how consumers are treated by energy companies. Over the past few days there has been talk in the press about how energy companies are deliberately hanging on to their customers’ money. I am in no doubt that that is a deliberate policy by some of the energy companies, and I will give the House two or three examples of what energy companies are doing with their customers’ money.

One example is something of which I have personal experience. Until two years ago I had a prepayment meter. Someone on a prepayment meter receives an annual statement that sets out what they have used and what they are likely to use in the next 12 months. It predicts how much energy someone will use, and what the likely cost will be. I decided, understandably, to move to direct debit to reduce the bill. I phoned the energy company—British Gas—and the call handler explained that they had to go through a process of assessing what my bill was likely to be. I pointed out that a prediction had already been made in the annual statement, but of course they insisted on going through the process of counting the number of radiators and asking how many people were in the household. Lo and behold, to nobody’s surprise the company suggested a higher direct debit on a monthly basis than what I had been paying for the past 12 months.

In reality, the company was trying to bamboozle me into paying more per month. I am fairly forthright and insisted that it stuck to a reasonable amount of money, but my concern is that many people, particularly those on prepayment meters, are some of the most vulnerable in our society and could easily have been bamboozled into paying a higher direct debit than they should have paid. I am convinced that that call handler had been encouraged to take people down that route so that they would pay more.

Luciana Berger: I thank my hon. Friend for kindly giving way. He articulates an important point about vulnerable customers who are paying above the odds on prepayment meters. However, it is not just those on prepayment meters who pay direct debits; we all have the opportunity to do that. I have raised this point before in the House, but is my hon. Friend aware of actions by companies such as E.ON, which was previously my energy provider? I see myself as very forthright, but when I called it to amend my direct debit—I knew I was paying above the odds on a monthly basis—it would not allow me to amend it. I had to pay the price it offered me, and that was it. I had to pay above the odds, and it was essentially allowed to accumulate money from me. That was the only choice offered to me; otherwise I had to pay a quarterly amount, and a much higher price for my energy.

Simon Danczuk: I am obviously not aware of that particular case although I am happy to make representations to E.ON on my hon. Friend’s behalf, and try to get her a better deal. She makes an important point.

My second example is from when I moved house, just over 12 months ago. I stopped the relationship with British Gas to move to another provider, yet the money it was taking from me continued to leave my account. I

6 Nov 2013 : Column 316

had to get on the phone and kick up a stink to get the money back. British Gas had retained literally hundreds of pounds that were due to me. That was being done to maximise its profits.

Let me give the House a third example. This one is from a constituent, Alan Valentine, who contacted me this week because of the hullabaloo on energy prices. His mother died in March, and he paid the final bills using British Gas’s automated payment system. Needless to say, a company called Past Due Credit Solutions was soon chasing him for payments he had already made. Mr Valentine states:

“I am concerned mainly that many thousands may be sent demands for bills already paid, many hundreds of whom may be elderly or forgetful, many of whom may then pay the bill again.”

Those are clear examples of energy companies doing all they can to maximise their handling and holding of consumers’ money. Those behaviours are wholly unacceptable.

Steve McCabe (Birmingham, Selly Oak) (Lab): Before my hon. Friend moves on from energy companies, does he find it perplexing that there seems to be no Government action against energy companies that are quietly getting rid of existing tariffs such as the E.ON pensioner fixed-rate tariff, which are designed to protect people? They are doing so in the name of Government policy—the policy of the Prime Minister—on reducing tariffs. What is fair about that?

Simon Danczuk: My hon. Friend poses a very good question. What is fair about that?

Energy companies are quickly becoming the new banks. I am delighted that Labour is calling time on their behaviour. If the Conservative-Liberal Government will not take action, I am pleased that a Labour Government will.

4.26 pm

David Morris (Morecambe and Lunesdale) (Con): It is a pleasure to be in your presence while you are in the Chair, Madam Deputy Speaker. This is the first time I have spoken under your guidance.

I want it to be known that I am not standing up for energy companies or anything to do with them. I am standing up for common sense and the consumer. All hon. Members are keen for energy prices to drop. I am proud to support the work of my right hon. Friends the Secretary of State for Energy and Climate Change and the Prime Minister. For the first time in decades, genuine action is being taken to improve our energy market. I really believe that.

The right hon. Member for Don Valley (Caroline Flint), who is not in her place, said a lot about myths. All political parties like to talk about myths, but let us talk about reality. If a potential Prime Minister stands up in the Chamber and says, “I am going to freeze energy prices,” they will send the stock market into disarray. That is what happened. Overnight, £1 billion was wiped off the stock market in energy.

I have two nuclear power stations in my constituency—energy is the largest employer in my constituency. Hon. Members can imagine the horror of my constituents who saw that. They knew immediately that the energy companies would react to safeguard their interests after losing £1 billion, and they hiked energy up by 10%.

6 Nov 2013 : Column 317

They then wanted their customers to sign up to a three-year freeze deal, which would completely negate what the Leader of the Opposition wanted to achieve. That is the reality of what happened.

Toby Perkins: Is the hon. Gentleman seriously saying that the price freeze offered by a number of companies recently—not any future price freeze—was linked to the Labour party conference? Is he saying that the Labour party conference announcement led to those price freezes? I have not heard anyone else make that case, so is that what the hon. Gentleman is seriously saying?

David Morris: I am referring to the announcement in the Chamber—obviously this is a more official domain than the Labour party conference.

The three-year price freeze negated completely the policy. It seemed popular, people are still talking about it, and the press are talking about it with gusto. But the reality is that unless the energy industry is renationalised, that is how the markets will react. Last time there was a similar run, the Leader of the Opposition was Secretary of State for Energy and Climate Change. We had a price fix of three years. If he could not do anything against the markets when he was in power, what makes him think that he can do it now? It is all pie in the sky. In reality, the energy companies will carry on looking after themselves, the consumers will get the hike on the threat of a price freeze, and it will cause pandemonium among consumers, especially in their pockets.

As I have said, my constituency has two nuclear power stations. The announcement by the Leader of the Opposition has the potential—if it has not already—to damage pension funds through the shares in the company.

Dr Whitehead: Because gas is the market maker, the two nuclear power stations in the hon. Gentleman’s constituency are making large amounts of additional money from the electricity they sell at gas market maker prices because they are not subject to the carbon floor price. Therefore they are completely insulated from the effects that he mentions. Far from being worried about the situation, I would suggest that they are worried about the possibility that the Government might remove the carbon floor price and thus remove the free money that they are getting.

David Morris: I disagree with the hon. Gentleman’s analogy. We are talking a lot about gas, but the two nuclear power stations are huge employers in my constituency. What is the Opposition saying to my constituents with the suggestion of a price freeze? Will there be a freeze on their wages? That is what would happen. How can those two new stations produce energy efficiently and make some profit out of doing so without passing the effect of the price freeze down to the people who work in the area? The local economy would be hard hit. It is one thing to announce price freeze policies on the hoof, but that is the reality.

We are trying to be more responsible. I agree that we must take down green levies, which are a blight on struggling families. The average British family pays £112 a year because of green levies and I am delighted that the Prime Minister is taking action on that. We all support low-carbon energy production, but there is no

6 Nov 2013 : Column 318

point in confusing saving the planet with taxing people to death. We also need to invest in local energy production which is less susceptible to foreign crises and currency fluctuations. My hon. Friend the Member for Warrington South (David Mowat), who is no longer in his place, articulated accurately how the European markets are dealing with this problem. We can debate what sort of locally produced energy we should have, and I am very aware of people’s different views on that, but having local production is vital in my area for a variety of reasons, including the local economy and the cost to the consumer.

Bob Stewart (Beckenham) (Con): It is clear from what my hon. Friend says that we need more nuclear power stations. They will produce energy at the lowest price, so let us get on with it.

David Morris: My hon. Friend takes a Churchillian stance on this issue. We do need more nuclear power in this country and I have never made any bones about saying so. Under this Government, Britain has done well at improving homes to make them more energy efficient, and that cuts costs even at a time when costs are rising. I want us to go further and consider the possibility of tax breaks for companies that build homes with solar panels.

We must push to bring more companies into the market. In 1997, there were 20 major energy companies; now, there are just six. The monopoly must be broken up, and that will never happen unless people are willing to switch providers. The Leader of the Opposition switched supplier. I do not want to ridicule him for that; I want to praise him, because he did the right thing. I just wish he would encourage others to join him, because this is one way of creating competition that will push costs down.

There are more ideas than the ones the Department of Energy and Climate Change is working on, but whatever happens the public must be aware that while the Labour price freeze sounds attractive, it is fundamentally weak and will not lead to lower energy bills—it might even increase them. The truth is that there is no obvious solution to the problem, but by putting a number of measures in place we can take control of it. I support the work of the coalition on energy markets. For the sake of my constituents, I beg hon. Members on both sides of the House not to put that work at risk.

4.35 pm

Mr Mike Weir (Angus) (SNP): I hope everyone in the House agrees that the rising cost of energy is putting huge strains on families throughout the country. The motion calls for a freeze on energy prices. That is superficially attractive, but it is mired in difficulties, not least because it freezes the inequalities in the system. It is true, however, that the energy companies have serious questions to answer about the reason prices are rising. Every year we are told that it is due to the wholesale price of energy, and the Energy Secretary repeated that in last week’s statement. However, the chief executive of Ovo Energy, appearing before the Select Committee and on TV this week, stated that the cost of gas he is buying is lower than it has been in the past four years. Ofgem originally questioned whether there had in fact been a price rise, before rowing back. Its position can

6 Nov 2013 : Column 319

best be summed up as: “It depends how you read the figures,” which hardly instils confidence.

I fully understand that the situation is probably not straightforward, in that the need to ensure sufficient supplies well into the future and the volumes of energy purchased by the large companies, effectively as futures, as against that of smaller companies who may buy on the spot market, may make a difference, but both the regulator and the Department must act decisively. If there is any suggestion that wholesale prices have not risen as claimed, the rises must be cancelled or curtailed. It is not good enough to call for a Competition Commission inquiry. That will take years and we need quick action now to find out the truth of the claims. To that extent, I support the call to ensure that when wholesale prices are reduced they should be passed on to the consumer. The consumer is rightly suspicious and we require much greater transparency.

I have said on other occasions, and will repeat it again, that we would be prepared to look at any proposals for reducing energy bills, but I have concerns about the Labour proposal for a one-off energy price freeze. What would happen, for example, if energy companies substantially increased prices prior to, or immediately after, the freeze? Would a Labour Government force a reduction? Would they bring in a permanent control of prices? How would they deal with the urgent need for investment in our energy infrastructure? In an intervention, I asked about contracts for difference and the pool system. Hon. Members will recall that contracts for difference were supposed to guarantee a price to stimulate much needed investment in energy infrastructure. I do not understand how that would fit into the proposed system.

The right hon. Member for Don Valley (Caroline Flint) spoke at length about splitting up energy companies, but she seemed to be talking about the split between the two wings of energy companies—the wholesale and the retail supply side. That has dangers. Anyone who watched the recent “Dispatches” programme on energy prices would have seen what was said about E.ON and the rather unique way it deals with that. Apparently, the retail side makes no money because it pays huge rates of interest on money borrowed entirely from associated companies within the group. How will that be dealt with in the proposed system? E.ON is already effectively split between wholesale and retail, but that is not having an effect, because it is a matter of artificial accountancy, borrowing money from other companies within the group. As an alternative, we have proposed transferring from energy bills to general taxation the cost not of all green measures, but specifically of the fuel-poverty measures and the energy company obligation, which we calculate would reduce energy bills by 5% or about £70 each and every year—it would not be a one-off saving. This would have the added advantage of delivering a more integrated fuel-poverty programme than could be achieved if we left it to the energy companies.

In the energy statement last week, the Secretary of State again repeated that the Government had taken powers to implement the Prime Minister’s promise to put everyone on the lowest tariff. I have pointed out before, and will do so again, that the measures in the Energy Bill will not have that effect. The Bill requires energy companies not to put everyone on the lowest tariff, but only to make the offer, which might be lost in

6 Nov 2013 : Column 320

the mass of paper we receive from them already. Is not part of the problem that there is such a lack of trust in energy companies that whatever they offer will be met with total scepticism by consumers, even when they offer free loft insulation or suggest the most appropriate tariff?

The proposed changes will even fail to help the poorest in our society who have to rely on prepayment meters—this is another difficulty with the energy price freeze. For someone on a direct debit tariff, it might be fine, but anyone on a prepayment meter will still be stuck on a higher tariff, because generally their tariffs are higher than direct debit tariffs. If we are truly intent on ensuring that everyone has the lowest possible bills, these measures should not only operate within an existing contract, but allow people to move to a cheaper contract. Instead of freezing the price, we need to mandate that people be moved to a cheaper contract.

Perversely, prepayment meters are one of the few examples where consumers pay much more if they pay cash in advance. That is important, because Citizens Advice Scotland recently issued an energy report showing that the majority of people coming to it with energy problems have trouble with prepayment meters. It cited examples of people putting £10 in a meter, only to see £7 taken to meet existing debts, leaving them with only £3 of energy, which is completely insufficient to heat homes.

The motion calls on the Government to put all over-75s on the cheapest tariff. Although any help is welcome, it rather depends on the tariffs. If the cost of energy continues to rise, the amount payable will also continue to rise throughout the various tariffs, so this measure would not hit at the heart of the problem of the relative affordability of energy. It is not clear whether the motion intends that people should be put on the cheapest tariff that their present supplier offers or the cheapest overall tariff. The best option is to have a cheaper specific tariff that is identical across all companies and available to the over-75s. That would attack the problem. A system of higher winter fuel allowances for elderly people would also be a much better option. Furthermore, to take up the point raised by the hon. Member for Ynys Môn (Albert Owen) about off-grid consumers, I have tried repeatedly—and will do so again on 27 November—to raise in the House the idea of earlier winter fuel allowances for those off the gas grid.

It has been interesting to listen to Labour Members. Understandably, they seem to have great disdain for the energy companies. I was particularly struck by the speech from the hon. Member for Glasgow Central (Anas Sarwar), who is no longer in his place. In a recent article in The Independent,however, I noticed that at the very conference at which Labour announced its new policy, it had a céilidh sponsored by Scottish Power, so it has not always been so reluctant to dance to the tune of the big energy companies.

4.43 pm

Duncan Hames (Chippenham) (LD): I did not anticipate having the opportunity to speak, so I am grateful to you, Madam Deputy Speaker, for calling me and to colleagues whose speeches I have heard.

It is important first to set out our objectives for energy policy, on which, even in this heated debate, a large majority of the House can reach a consensus. We

6 Nov 2013 : Column 321

want energy that is affordable and reliably available to businesses and households. We want to meet our energy needs in a way that also meets our commitments in the carbon budget to reduce carbon emissions and take responsibility for the consequences of our choices for the rest of the world. It is worth bearing in mind, in seeking to do all those things, that the question of affordability can be addressed not only through energy-specific policies but through wider economic policy.

I suspect that energy is not going to get any cheaper, so it is important that we look to other mechanisms to make our energy more affordable. Above all, I would certainly agree with those who have spoken today about the need to become more efficient in our energy use in order to get the bills down. I also hope that we can support economic policies that will provide for growing incomes, so that people’s ability to pay their energy bills will be improved. That should be an objective of this Government and any other.

My main interest in speaking in the debate is to elicit more detail from those on the Opposition Front Bench about the proposals that they want MPs to vote for this afternoon. The “deep structural reforms” that the right hon. Member for Don Valley (Caroline Flint) talked about introducing after a 20-month price freeze are worthy of closer scrutiny by Members on both sides of the House, but I lack any confidence that the interim measure of a price freeze would actually work. I want to ask some questions about that, and I hope that the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) will be able to answer them when he sums up.

How long would it take to bring about a price freeze, once a Government Minister had decided to introduce one? Could he or she do it under their own executive authority? Would they need to put it to the Cabinet, or get a Government write-round to support the proposal first? Could it be done through regulations, or would it need to pass through this House? Would it require primary or even emergency legislation?

I would be interested to hear how long it would take to implement such a freeze, regardless of which party was in power, if a Minister was minded to do so. That would also tell us how long the energy companies would have to respond to the situation before the Government were able to implement the freeze. Would it be possible for the energy companies, either under this Government or a future Government, to get price rises in before a freeze came into effect?

What would be the consequences of a price freeze while it was in place? The right hon. Lady said that, even if wholesale prices were changed during a freeze, electricity suppliers would not feel the effect or need to increase their prices because they would already have purchased their energy on the forward markets. As I have tried to explain in earlier interventions, that will present a particular challenge to the very companies that I hope all Members want to have a greater presence in the electricity market, because those smaller companies are at a disadvantage compared with the big six when trying to buy electricity on the forward markets.

It is not difficult to understand. An independent electricity generator entering into a contract to sell its electricity some time in the future to a supplier of electricity to businesses and other customers is giving

6 Nov 2013 : Column 322

up the opportunity to sell it to anyone else. It will therefore have to be extremely confident that the supplier will still have the financial strength to pay for that electricity later on. Generators look for collateral in those circumstances, and the big six clearly have the necessary collateral to see them through that process. It is much harder for the smaller, challenger companies.

Dr Whitehead: The hon. Gentleman talks essentially about the security of long-term bilateral deals. Does he accept that the effect of a pool, particularly a full purchase-in and a full buy-out pool, removes a number of the issues he has raised about the uncertainty of whether we can get a buyer and whether the person who is buying ultimately has the wherewithal to do so?

Duncan Hames: I thank the hon. Gentleman for that intervention. I said that I was interested in the long-term proposals outlined by the right hon. Member for Don Valley. However, I am talking about what happens during the period of the price freeze, before some of the changes she proposed come into effect; and I was highlighting the difficult position in which the small suppliers are left during that period.

This issue relates not just to wholesale prices, as other increases in costs that suppliers will experience during this price-freeze period are relevant, too. Suppliers will experience regular increases in costs for distribution and transmission, and unless they are in a position to change their prices before the freeze comes into effect, that will be a direct hit. Although some Labour Members may believe that the big six can take that hit, it is a much bigger challenge for smaller competitors to be able to absorb it. In fact, a market in which losses need to be absorbed for a period of time before it is possible to break even acts as a barrier to entry. If we want a more competitive market, introducing a new barrier to entry and to the viability of new entrants will clearly not help bring about competition. In order to be able to grow market share, new entrants rely on people having an incentive to switch. I would be interested to hear what the Opposition think will be the practice of competition during the 20-month freeze. How possible do they believe it will be for the smaller competitors to challenge the big six during this period, or will it just be one of entrenchment for the big six companies?

At the start of the debate, I asked whether the right hon. Member for Don Valley agreed with me—and she did—that it was in the long-term interest of consumers for Government policy to seek to reduce the cost of capital to businesses in the industry. If we enjoy in the future a very competitive energy market—after whichever Government have been busy reforming the electricity market—the lower the cost of capital, the lower the prices will be that consumers pay.

It seems to me incontrovertible that an industry experiencing a Government intervention which forces a price freeze for a period of 20 months will have the effect of raising the cost of capital. Investors do not have to invest in the sector if they do not wish to do so; they can invest elsewhere. If they know that the Government have frozen prices, that will be a reason for the cost of capital to increase. Ultimately, that would push up prices for consumers, even after all the reforms that the shadow Secretary of State outlined. That would not be in the best interests of consumers. I do not believe that this idea is going to work.

6 Nov 2013 : Column 323

4.53 pm

Dr Alan Whitehead (Southampton, Test) (Lab): Perhaps the best thing we can do this afternoon is to shoot a number of canards standing in the way of grasping the central issue of how to reset the market in such a way that it will work in favour of consumers and customers instead of against customers’ interests. Frankly, saying that proposals to reset the market will lead to a deterioration in investment prospects or a loss of market value that will prevent people from investing is the first and one of the biggest of such canards.

A substantial amount of investment is needed, but it cannot be judged on the basis of the interests of integrated utility management; it will come from companies investing in the wires, in smart meters and in new forms of generation that are independent of the utilities. Indeed, the balance sheet of the big six suggests that not a very high proportion of that £100 billion-plus investment is likely to come from them in any event. It appears that the factors relating to the investment will be manifold, and will not necessarily be related to the fortunes of the big six.

To say that resetting the market will cause it to work in a terrible way in the future is effectively to say that breaking up what is currently a seriously dysfunctional system will lead to problems. That strikes me as a counsel of despair not just where the market is concerned, but where consumers are concerned, and it is, perhaps, the second big canard to be shot. It is claimed that the Energy Bill will put a number of things right, and it will, but what it will not put right is the malfunctioning of the market. What is extraordinary about the Bill—as with the energy reform White Paper that preceded it—is that the one thing it does not do is reform the energy market. It lets the market carry on just as it has in the past, and we know that the market is seriously dysfunctional.

Bilateral trade that rolls down the curve conceals a considerable amount of what is actually going on. One might think, for example, that there is a relationship between the 24% profit that is made by generators overall and the 5% that is made by retailers, because one sells to the other, and one might therefore wonder where the missing money in the middle is going. In fact, much of it is going to people who are trading with themselves and “netting off” so that their trades do not appear as trades at all, or even creating trades close to gate closure in order to balance the two sides of the operation of an integrated company.

We know that the energy market is pretty dysfunctional, and we know that it needs to be reformed. The question is, can we reform it by simply continuing with business as usual and hoping that Ofgem will continue to produce documents that aim to introduce a little more transparency to a market that, by definition, is largely not transparent, or should we do more to reset the market in favour of customers?

Mr David Anderson (Blaydon) (Lab): I apologise for not being in the Chamber earlier, Madam Deputy Speaker. I was at a Select Committee meeting.

As always, my hon. Friend is speaking very knowledgeably, and he is making a good point about the dysfunctionality of the energy market. When, 25 years ago, it was first suggested that the market should be privatised, we were told that one of the key reasons for privatising it was that the risk would be transferred

6 Nov 2013 : Column 324

from the Government—from the public purse—to the private sector. Is not the truth that, in the last 25 years, the risk has been transferred from the Government to the private sector, and thence to the customer? The customer bears the risk whatever happens.

Dr Whitehead: My hon. Friend is right. The market tends eventually to land its risk, its transfer arrangements and its outcomes squarely on customers’ bills. The point about a price freeze is that it must be seen in the context of the other measures that it is being suggested should accompany it as a way of securing a pause while the market is reset.

Bob Stewart: For the sake of my education, will the hon. Gentleman clarify one point? It seems to me that if we had a nationalised energy company and the prices went up, there would be only two ways of paying for that: through the customer, and through the Government. Does the hon. Gentleman agree that, whether a company is nationalised or commercial, the customer pays in the end?

Dr Whitehead: The hon. Gentleman asks a rather complicated question. Currently, gas is the market-maker and companies that produce energy that is not gas-based sell their energy into the retail market at the electricity-equivalent of the price of energy produced by gas. It is to be hoped that one of the effects of energy market reform will be that a change in the balance of production, in particular as a result of increasing amounts of renewables, will mean that gas is no longer the market-maker. That is another canard that will need to be shot in the long term.

Bob Stewart: Gas is the most expensive?

Dr Whitehead: Obviously, the world gas price varies considerably. The UK market is currently based around the gas price. If gas is no longer the market-maker over the medium and long term, a number of interesting consequences will arise, particularly in terms of how we would relate volatile markets to retail prices.

That is one of the issues that would be dealt with by the Opposition’s proposals to introduce a pool. If there is a pool into which everybody transparently sells their products and the pool then sells to energy retailers, that would deal with a number of problems that have arisen as a result of the imperfections in the market, and which would remain despite the Energy Bill trying hard to address them. If there was a pool, they would be dealt with even if gas was still the market-maker, but the market would be much more efficient in the long term if that was not the case.

We should consider in this context the fact that independent generators do not believe they have a clear market for their products. That issue remains unsolved by the Energy Bill provisions. If there were a pool, it would be substantially solved in as much as they would know they had a buyer into the pool and a seller out from the pool. If the current dysfunctional market were reset in the way the Opposition propose—with a price freeze while the market is reset, a pool, and a regulator that can properly relate what is happening in world prices to how they are being passed on through the pool and out the other side—a lot of the issues we have been talking about today would become far more simple and transparent, and the future solutions would be customer-oriented.

6 Nov 2013 : Column 325

I do not say that that would solve the problem of increased energy prices in the future, because it is certainly true that world energy prices continue to increase and that there would be price increases for the consumer. It is not true, incidentally, that under those circumstances energy companies would simply take back the money lost during a price freeze, because there would be regulation reflecting world prices. Although prices have gone up, the world gas price has not gone up over the past year and a half. A fair relationship between world energy prices and retail prices could be achieved through a combination of new forms of regulation, an energy pool and a reset of the market.

We must look at these proposals as part of a wider package that, at its heart, is on the side of the consumer. At present we have a dysfunctional market that will never end up on the side of the consumer unless it is fundamentally reset so that it points in the right direction. My sorrow is that, although the Energy Bill has many good provisions that deserve to be supported, it does not do that, and that is what the Opposition proposals are trying to do, and that is why they should be looked at seriously—

Madam Deputy Speaker (Dawn Primarolo): Order. Time is up. I call Debbie Abrahams.

5.4 pm

Debbie Abrahams (Oldham East and Saddleworth) (Lab): I wish to start by putting the energy bill crisis into the context of the cost of living crisis. As we know, since May 2010 prices have risen faster than pay every month apart from this April. Why was April different? It was different because people on high incomes wanted to take advantage of the tax break that this Government had given them. We also know that one in four children live in poverty—in some wards in my constituency the figure is one in two—with the level set to increase in the next few years. By 2020, because of this Government’s policies, 1.1 million more children will be living in poverty. These are the choices that this Government have made.

Escalating heating bills are a major factor affecting costs to households and to businesses. Last year those costs increased by between 6% and 11%, and since this Government came to power an extra £300 has been added to energy bills. So why is this happening? Until the last few months, this country had a flatlining economy—we have had three years of it. Although the growth over the past few months is welcome, if we had had just 1% growth since 2010 we would have generated £335 billion more in the economy, with all the associated jobs and personal income that that would have brought. If we had had 2% growth, we would have generated £551 billion, and many economists believe that that will just not be recoverable.

Related to that situation has been the fact that pay has either gone down or been frozen. Some 400,000 more people are living below the living wage, bringing the number of those doing so up to 5.2 million. In Oldham, the level of weekly pay has fallen from £432 in 2010 to £426 in 2012, which is well below the regional and national averages. But this is not just about the Government’s mismanagement of the economy; they seem incapable

6 Nov 2013 : Column 326

of showing leadership and standing up for ordinary people against powerful vested interests. Too many big businesses have for too long been behaving unethically, whether we are talking about tax evasion or aggressive tax avoidance, cheating the Exchequer of up to £35 billion a year; large companies choosing to pay small businesses in their supply chain late—an estimated £30 billion is owed to small businesses in late payments; or the big six energy suppliers acting as a cartel, claiming that wholesale energy costs have driven up energy bills by 10.4% on average a year, whereas this actually costs them only 1.6% on average.

I tried to intervene on the Secretary of State to make the point that this is happening at a time when these companies are publishing profits of £3.7 billion, which is an increase of 73% since 2010. According to Ofgem’s latest electricity and gas supply market indicators, the typical domestic dual fuel bill now stands at £1,420 a year compared with the £1,105 that it was in May 2010. But what have this Government done, apart from tell us to put jumpers on? Governments set the tone for the culture of a society. They do so not only explicitly through their policies, but by what they imply. It is clear from this Government’s policies and actions exactly where their priorities lie, and it is not with ordinary people and with addressing the inequalities and poverty that exist in this society.

The effect is, as one would expect, fuel poverty. Its level had fallen in recent years, following the various energy-efficiency measures introduced under the last Labour Government, such as the Warm Front programme. But with rising energy bills swamping all that, even under the Government’s new definition of fuel poverty there are now 2.4 million people who are fuel poor, with the average household fuel poverty gap standing at £494.

The Fuel Poverty Advisory Group warned in 2010 that instead of fuel poverty being eliminated by 2016, more than 7 million households could be fuel poor. In Oldham East and Saddleworth, 16% of households—8,000—are fuel poor. To help them, Oldham council launched a collective energy switching scheme that enrolled 22,000 households. The council admits, however, that that is not enough—and it is not enough.

There are wider effects. Sir John Major has said that the real choice people face is whether to heat or eat. I am particularly concerned about this winter and its effect on the most vulnerable in society—older people and those who are ill or disabled. We know that on average 24,000 people, predominantly older people, will lose their lives every winter. Last year however, there was a 75% increase in the number of expected deaths, partly because of the increase in flu but also, according to statistical analysis, because of the extreme cold. It is inconceivable that heating costs will not play a part in the number of excess winter deaths we face, and it is just not good enough to say “Put a jumper on.” If we consider the issue in the context of the crisis in accident and emergency, we can see that there will be absolute meltdown.

It is not only the elderly and the vulnerable who are affected. A constituent wrote to me who is a teacher with a young son of four and twin girls of 20 weeks. She lives in private rented accommodation with her husband, but the landlord cannot afford to update the boiler. She is not eligible for anything. She said, “Last winter was a

6 Nov 2013 : Column 327

nightmare. I have newborn babies; what am I going to do? What will support me? The heating costs are bad enough.” I have also had constituents, similar to those mentioned by my hon. Friend the Member for Rochdale (Simon Danczuk), who have written to me about their constant battles with the energy companies. It is just not good enough.

Mr Anderson: My hon. Friend is making a very serious speech. Is it not true that when we talk about professionals such as teachers struggling to find the extra money, they are the same people who have had their pay frozen for almost three years? The Government are now talking about freezing their increments, too. They are losing out twice over: costs are going up and their wages are stagnant. That is a direct result of the Government’s policies.

Debbie Abrahams: I could not agree more with my hon. Friend. It is a double whammy and the Government are doing nothing to address it.

When the Minister replies, perhaps he can respond to the questions that my constituent has raised. What is she to do? She is working, so she cannot claim support to renew her boiler. Thousands of families up and down the country face equivalent problems and he must give a response on the difficulties mentioned by other Opposition Members.

I wholeheartedly support the pledges made by my right hon. Friend the Leader of the Opposition and my right hon. Friend the Member for Don Valley (Caroline Flint). We must overhaul the energy market, abolishing Ofgem and creating a tough new energy watchdog. We must require the energy companies to pool the power that they generate and we must require those companies to put all over-75s on the cheapest tariff.

5.13 pm

Toby Perkins (Chesterfield) (Lab): I am delighted to have the opportunity to speak in such an important debate, because I believe that today we are discussing an issue that goes to the heart of the cost-of-living crisis that my constituents are living through day in, day out. We need urgent action to address the problem and I am pleased that that is exactly what Labour proposes today.

Since the Prime Minister took office, energy bills have risen by almost £300 per family. Of course, we all know that when my right hon. Friend the Member for Doncaster North (Edward Miliband) was Energy Secretary, prices came down. During the debate, I have been saddened but also a little heartened. I am saddened because we have heard from a Government who are making it absolutely clear that they will take no action on one of the key issues facing my constituents. At a time when members of the public are calling so desperately for something to happen and we are hearing a Government who are so very much out of touch defending the status quo, I must admit that I was a little heartened to think that when we go to the next election they will have to look the electorate in the eye on the doorsteps, saying, “We were given the chance to do something, but we turned our backs on you and stood up for the big energy companies.” That heartens me very much in electoral terms, despite my disappointment about the impact on my constituents.

6 Nov 2013 : Column 328

Opposition Members have raised an army of straw men to explain why they cannot take serious action. It is not possible for anyone who is worried about energy prices to hear the speech of the Secretary of State and believe that things would be any different under him in future than they are today or than they were yesterday. He raised the green deal. The number of people assessed for the green deal would fill Old Trafford, but the people who have taken up the green deal would not even fill the Chamber. That is the scale of the failure.

Gregory Barker: The hon. Gentleman is absolutely wrong. He confuses the number of people who have taken up green deal finance with the number of people who have had an assessment and installed green deal measures. Once they sit down at their kitchen table, a surprisingly large number of people—thousands and thousands—elect to take all the savings immediately and install the measures.

Chris Ruane: How many?

Gregory Barker: British Gas alone has installed more than 10,000 green deal measures for customers who have elected to install them. Some 80% of people who have had a green assessment say that they have already installed measures, are currently installing measures, or are likely to do so.

Madam Deputy Speaker (Dawn Primarolo): Order. Interventions are brief. I allowed the point to be made, but that really was too long.

Toby Perkins: Just like many other Government Members, the more the Minister spoke the less he said. Seven people in the Prime Minister’s constituency benefited from that.

Chris Ruane: Six.

Toby Perkins: Was it six? I got it wrong. The measure is a pitiful failure and to hold it up as an example of a Government success shows how little the Government know and how little they are doing.

In the few weeks since the Labour conference the Government have been in complete disarray on one of the central cost of living issues that we face. When I listened to the speech by the hon. Member for Morecambe and Lunesdale (David Morris) I was reminded of someone who thought that if we did anything to these powerful energy companies they might end up hurting us in return. Basically, we should just leave them alone, because if we did not they might up put up prices or not increase wages for his constituents. I was reminded of someone who thinks that the way to tackle a bully is not to tell anyone about what they are doing because the bully might get them after school. It was absolutely pitiful, and the hon. Gentleman’s constituents will have heard what he said—I am sure that they will be made aware of it—and they will know that he is someone who absolutely refuses to take their side or stand up to the big six.

When we hear Government Members say that we need to put pressure on the big energy companies while at the same time coming up with a host of risible reasons for not taking action, saying that that would be dangerous, we know that the Conservatives and Liberal Democrats are not the answer to this problem.

6 Nov 2013 : Column 329

Prices are going up because when the wholesale price of energy increases the energy companies pass that on, but when it drops our constituents do not see a fall in their bills. If that sounds familiar to Government Members I would not be surprised, because it is precisely what the Prime Minister said when he was Leader of the Opposition. In Bedford in 2009, when he was still attempting to occupy the centre ground, he said:

“I think we all feel that when gas prices or oil prices go up, they rush to pass the costs onto us and yet when we read in the papers that the oil price has collapsed and the gas prices are coming down, we wait for a very long time before we see anything coming through on our bills”.

I could not agree more, and it is a shame that the Prime Minister does not say now what he did when he was attempting to be elected.

Only last month, Which? estimated that flaws in the market have left consumers paying £3.9 billion a year over the odds since 2010. We have a duty to our constituents to end this great rip-off. One-nation Labour has a long-term vision to do just that—not simply with the energy price freeze but with a suite of measures that will radically transform the market. There are three steps that will make a significant difference, including, first, separating the parts of the business that generate energy from the parts that sell to consumers. My hon. Friend the Member for Southampton, Test (Dr Whitehead) was excellent, as he always is, on the importance of this, setting out its real value. Secondly, we would introduce a simple new tariff structure and make sure that people over 75 always paid the lowest tariff. Thirdly, there would be a measure to abolish Ofgem, which has failed to stand up for consumers, and to replace it from January 2017 with a new energy watchdog with teeth.

The 42,000 households in my constituency cannot wait for those proposals to bear fruit. They need action now. They need a Prime Minister who is not strong on the weak and weak on the strong but who is brave enough to stand up to the energy companies and deliver a price freeze. An incoming Labour Government will legislate with immediate effect to make this happen and will put an average of £120 back into the pockets of every household in Chesterfield. Unfortunately, the response of the Prime Minister and the response that we heard from the Secretary of State was once again to stand up for the wrong people and to take the side of vested interest. It seems that the Conservatives will do anything to prevent the big six from having to reduce their profits.

Instead, the Prime Minister has suddenly turned on the evil of green taxes. As my hon. Friend the Member for Ynys Môn (Albert Owen) reflected earlier, green taxes are so evil that he told “The Politics Show” in 2006:

“I think green taxes as a whole need to go up”.

In 2006 he told “Newsnight” that

“we think green taxes should take a bigger share of overall taxes.”

So evil were these green taxes that his Government introduced 60% of the green levies currently imposed on energy companies. We all remember when the Prime Minister was the Leader of the Opposition and was attempting to present the modern face of Conservatism. He has certainly travelled a long way from “vote blue, go green”. He has shot the husky and simply told people to pull up their hoodie. He is not standing up on behalf of the people in my constituency.

6 Nov 2013 : Column 330

The Prime Minister has not explained how, when he abolishes the green levies, the burden will move to general taxation. Where will the money come from? I do not believe the Government are going to increase taxes. That leaves one of two possibilities. Either it will go on to the deficit, which the Government have so singularly failed to eradicate in the way they promised, or they will reduce the budget for schools, hospitals, roads or other Government Departments. We have had nothing from the Secretary of State or Ministers about how they propose to fund those measures from general taxation. It was interesting that in the Secretary of State’s entire speech, he did not once mention the idea of getting rid of green levies and raising the money from general taxation. That spoke volumes about the extent of the disarray that the Government are in.

The issue is not just the impact on consumers. Labour is very much the party of small business. Our policy of an energy price freeze is an example of that. Annual energy bills for small businesses have gone up by an average of £10,000 since 2010. Small businesses will benefit hugely not just from the price freeze, but from a market that works for consumers. In addition, our plan to cut business rates for small business would mean an average saving of nearly £450 for 1.5 million business properties. These two policies demonstrate to small businesses that it is only Labour that will stand up on their side and cut their costs so that they can reinvest in new jobs and new products. Labour’s policy is good for consumers, good for business and good for the economy. I am proud to say that I will be supporting it and voting for it today.

5.23 pm

Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): There are 6,196 households in my constituency that are in fuel poverty, using the 10% of income measure, but those statistics are from 2011 and are the most recent. Since then prices have risen at least twice, while real wages are stagnating, so I am sure those figures will be much higher now. Energy prices are a key driver of the Prime Minister’s cost of living crisis, which has seen on average £1,200 wiped off the real value of the annual incomes of working people in the north-east.

Those fuel poverty figures do not tell the whole story. They do not show the households on the borderline of fuel poverty or those that may have a decent income, but for which energy costs are just one of a number of ever-rising costs that they have to meet, such as rent, child care bills, kids’ clothes, school uniforms, food and groceries. It is this reality that this Prime Minister and this Government do not understand. It is all very well telling people to wear a jumper around the house. Does the Prime Minister not realise that people do that already, my family included?

In the north-east, where it gets cold from September onwards, we put blankets over our legs when we watch telly. Some people even use quilts to keep warm, especially the elderly. There is a whole north-south divide element to this debate that needs to be addressed. As someone who lives in both places all year round, I know that there is regularly a 10° C difference, and that is without the added wind chill factor. According to the BBC’s weather forecast, at 4 o’clock today, when I last checked, it was 14° C in London and 8° C in Sunderland, and that is a mild gap. What about those who have to wear

6 Nov 2013 : Column 331

jumpers or layers of clothing when they go to bed at night because they have been unable to put the heating on all evening, or all week?

Why are energy prices rising? As we have heard, average wholesale prices have risen by just 1.6% a year since 2011, which accounts for around £16 of the increase in bills since 2011, but consumers’ bills have risen by 10.4% on average. That is six times more, at around £100 a year. That is being used to fund the fat-cat salaries of the big six and double the profits for their shareholders. Are Ministers really telling the residents and small businesses of Washington and Sunderland West, including the 6,196 households living in fuel poverty, that they would rather stand up for the right of the big six to boost their profits than for the people they are elected to this place to serve?

We must not lose sight of the fact that it is still the very poorest and most vulnerable of my constituents who pay the highest unit costs for their energy because they are on prepayment meters. They cannot switch to cheaper rates because there is very little competition, if any, for their business. They cannot pay a set amount by direct debit each month to spread the cost of winter over the rest of the year because the energy companies will not give them that credit facility. If they cannot afford the £10 to top up the meter, the lights and boiler just do not go on.

The energy company executives who appeared before the Energy and Climate Change Committee last week assured my hon. Friend the Member for Glasgow North West (John Robertson) that they would not cut off the elderly or disabled this winter, but those on prepayment meters cannot just keep using their heating; they are cut off the minute they run out of money or emergency credit.

Mr Anderson: My hon. Friend will remember from the days when she worked with me in Unison that we had discussions with the energy people when they changed to prepayment meters, meaning that people now self-disconnect. Companies can now say that they no longer cut people off or have responsibility for that, but those people are forced to disconnect themselves. The number of people in this country who live without access to heat, fuel and warmth because they have no choice is hidden, and that is a disgrace.

Mrs Hodgson: My hon. Friend makes a very good point. I would like to know what advice the energy company executives will give all those people. Will they offer them a deal they can afford in order to keep warm this winter, as they said they would during the Select Committee hearing?

I am going to share something quite personal today. I know that there are some MPs, although not many, whose background is similar to mine. I grew up in poverty. I know what it is like to have no central heating, and I know what it is like when you then have central heating but are not able to put it on because your mam cannot afford it. I know what it is like to wake up so cold that you cannot bear to undress to get washed and ready for school. I know what it is like to have a thick layer of ice on the inside of your bedroom window—I used to think everybody did in winter. I know what it is like to have the electricity man knock on your door and cut of your power when you are 13 years old and minding your two younger brothers while your mam has popped out to see your nanna because it is the

6 Nov 2013 : Column 332

middle of winter. I know what it is like to sit and wait, scared in the cold and dark, until your mam comes home, trying to keep two little boys occupied and make them feel safe.

That was in 1979, the first year of the previous Tory Government, and the year I was politicised and realised what it actually meant to have a Tory Government. My mam was not feckless; we were poor. There is a difference. A lot of people living in fuel poverty today are working. They are not feckless either, but there is a cost of living crisis beyond their control and not of their making.

I know that 34 years later some families still have experiences similar to mine. I remember talking to a member of staff at a Sure Start children’s centre who told me about the mothers of young children who often came to the centre with their child for hours at a time because it was warm and they were unable to use their appliances or TV at home because they could not afford to top up the meter.

I have recently heard about heat buddies in the north-east—groups of people who go to each other’s homes in turn to save heating their home in the evening. I have also heard that bath houses are being requested—in 21st-century Britain—because people do not have the money to heat their homes or water, so they wash with a kettleful of water in a sink and cannot face even trying to boil enough water for a bath as their home is too cold for them to bathe in. For goodness’ sake, Mr Speaker, what sort of country are we living in? Is it Victorian Britain? Is it Dickensian Britain?

Mr Anderson: Tory Britain.

Mrs Hodgson: Tory Britain—exactly. What are the Government doing for these people? What they need—what we all need—is an energy market that is forced to work in the interests of consumers, not shareholders. But until a Labour Government have the opportunity to make the required changes stated in the motion, they need a Prime Minister with the bottle and the guts to tell the energy companies that enough is enough—that people in 21st-century Britain should be able to have a bath in their own home and to go to bed warm enough to wear just a nightie or a pair of pyjamas, and not to die because of the cold with central heating they cannot afford to use.

Toby Perkins: I very much appreciate what my hon. Friend is saying—she is making a very powerful speech. The problem is not that the Prime Minister does not have the courage to stand up to the energy companies; it is that it is not in his make-up to stand up to the energy companies. It is not what he wants to do; it is not what he came into politics to do. He is not in politics to stop the energy companies making profits and to make consumers better off.

Mrs Hodgson: Is not the country all the worse for that? Well, I hope that the Prime Minister and his Government sleep warm in their beds at night, because huge numbers of people in the country he governs certainly do not, and will not this winter.

I would like to wrap up my remarks by quoting some extracts from a letter that I received a couple of weeks ago from Mrs Templeton, a constituent of mine from Biddick in Washington. Mrs Templeton wrote:

“I am writing to say how disgusted me and my hubby are about the rise in energy prices…Mr Miliband says he will freeze prices in 2015, but what can be done now?...I cannot believe the country

6 Nov 2013 : Column 333

is taking this on the chin...we should fight back…The top people in these companies will not worry about the increase, but believe me, most of the country are afraid of putting their heating on.”

There are millions of Mrs Templetons across the country—people who are sick of their bills keeping on going up but never coming down, sick of seeing energy companies’ profits ballooning while they have to choose between heating and eating, and sick of this Prime Minister doing nothing about it but defend the status quo. If he does not have the strength to fight back on behalf of Mrs Templeton and all those other people across this country, I suggest that he should stand aside and let someone who does do so.

5.32 pm

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): It is an honour to follow my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), who made an impassioned speech. I seek to echo some of the points she made and to speak strongly in support of the Opposition’s motion. I do so as the MP representing the constituency with the third highest level of fuel poverty, according to the Government’s new definition.

Not a week goes by when I do not have a constituent come to me to raise their serious worries about their energy bills. That is sometimes because they have been ripped off by their energy company. We have heard many examples of people who have paid above the odds for their direct debits or have been penalised when they have moved and have not received the credit to which they are entitled. We have heard about specific issues to do with people who have prepayment meters but often find that very difficult and have to pay over the odds in any repayments that they have to make. I speak in support of the motion on behalf of all my constituents and people right across this country.

The constituents we represent, and people up and down the country, are paying a staggering £315 more for their energy bills than they did back in 2010. That is against the backdrop of a cost of living crisis in which people have seen prices rise faster than their wages in 39 out of the past 40 months. Many of my hon. Friends have talked about the real choice that people in our country—the seventh most industrialised in the world—are having to make between heating and eating. That is not a joke or a catchphrase—I have seen it on far too many occasions, as have many of my hon. Friends. We are the only G7 country in which the Red Cross is providing emergency food aid. It does not help that people are having to spend £1,400 a year on average for their dual fuel bill, but have not seen their wages go up accordingly.

Some 700,000 people have accessed emergency food aid through a food bank. That is a national disgrace. The responses that the Prime Minister has given from the Dispatch Box at Prime Minister’s questions have been pitiful. He has not acknowledged the depth of the problem in this country. It is a stain on our national conscience. I am ashamed that people in my constituency have to go to a food bank because they cannot afford to put food on the table. To link that point back to this energy debate, people are often unable to use the goods in the emergency food aid bag that they receive from the Trussell Trust because they cannot afford the gas that it would take to heat them up on the cooker.

6 Nov 2013 : Column 334

Those are the issues that our country faces in 2013. I look forward to the Minister’s response because what the Secretary of State said was pitiful. He talked about switching, but for all the people who are facing a very cold winter, the best deal in a broken market is not a good deal. The figures that were released yesterday showed that the gap between the wholesale price and the prices that energy companies are charging us is getting wider. The wholesale price has gone up by 1.7% and the average bill has gone up by 9%. At a time when people are struggling to get by and there is a cost of living crisis, it is difficult for people to deal with those price increases.

That is why I support the Opposition motion. We need a price freeze. The Government have an opportunity to implement the price freeze today. I sincerely hope that they will, even though the Secretary of State indicated that they will not. A price freeze would assist 40,221 households in my constituency alone. It is not just households that will benefit, but businesses. We need a price freeze so that we can implement the raft of measures that are needed to reform the market. I notice that many Government Members are fixated on the freeze. The freeze is the vehicle by which we will implement the changes in legislation that are needed to fix the market.

What are the changes that are required urgently? We need to separate the retail market from the generation side. I mentioned in an intervention on my right hon. Friend the Member for Don Valley (Caroline Flint) that I have been to one of the energy companies. I saw for myself the physical collocation of the generation and retail sides. The room in which the company oversees its generation—the big six generate 70% of the capacity in the UK—is right next door to where it buys and sells its energy. The idea that the two sides do not liaise or engage with each another is ludicrous. That is why we need urgently to separate the retail side from the generation side.

We need to introduce a two-way pool in the energy market so that there is transparency in the cost of energy generation, which we do not currently have. It is in the best interests of the energy companies to charge themselves a high price. We do not know what that price is because it is decided in back-room deals among themselves. There is a pool, but it makes up only a fraction of the market. We need the whole market to use the two-way pool so that we can see the price of energy and to encourage new entrants into the market. At the moment, the big six dominate the energy market, making up about 99% of it, and there is little opportunity for new entrants to come in.

We need to have standardised tariffs so that people can compare energy prices properly. At the moment, the tariffs are very confusing. People need the switching websites because they cannot compare prices for themselves. The previous Secretary of State for Energy and Climate Change told the Select Committee that when he had tried to switch, he could not do so because it was so complicated. There are hundreds of tariffs. If we had standardised tariffs, people would be able to compare prices easily.

Mrs Hodgson: My hon. Friend is making an excellent speech. Does she agree that it is important that over-75s are put on the lowest tariff automatically, for the very reasons that she has just given?

Luciana Berger: I thank my hon. Friend for that intervention as I was just about to make that very point.

6 Nov 2013 : Column 335

I am delighted that the motion reinforces our policy that energy companies should automatically put over-75s on the cheapest tariff. That would assist 5,867 people in my constituency, and constituents of hon. Members across the House. Older customers are less able to benefit from direct debit deals because they are less likely to have access to a bank account, or access to the internet to get online deals. It is possible, perhaps through data-sharing, for energy companies to put the over-75s on to those cheapest tariffs. They could do that today and make a real difference to hundreds of thousands of pensioners up and down our country.

I am supporting the motion today because we need a tough new watchdog. We know that Ofgem is not doing a proper job because back in 2008 it was investigated, and 16 different areas identified.

Debbie Abrahams: Does my hon. Friend want to comment on what the Secretary of State said about Ofgem and that report? Does she think Ofgem is doing a good job?

Luciana Berger: I thank my hon. Friend for that contribution. Back in 2008, 16 areas were identified where Ofgem was not doing a proper job. The other year it was found that it had improved in only four of those 16 areas which, over that time, is frankly not good enough. When millions of our constituents and businesses up and down the country are suffering, we need a proper regulator with teeth, as well as the responsibility and ability to ensure that when there are reductions in wholesale costs, those reductions are passed on to consumers in way that is not done at the moment.

The Secretary of State was keen to talk about the green deal and the energy company obligation, which the Government have presented as a sort of quick-fix. Of course we need to do everything to ensure that we help millions of households across the country that do not have proper insulation in their homes, as that is one of the best ways to reduce bills. What the Government have proposed, however, and what they are doing on the green deal—well, the figures speak for themselves and we wait to see what will happen by the end of the year. The Minister said he would not be sleeping at night if 10,000 homes had not had a green deal package, but we wait to see the figures.

Gregory Barker: Well over 10,000 homes have already installed green deal measures.

Luciana Berger: I am referring to figures of those that have actually completed. I return to my point that we have the green deal in hand with the ECO, and thousands of people in the insulation industry have lost their jobs.

Let me mention an actual individual. Mr Sturdy in my constituency is 85 years old. He has previously had a stroke, suffered from angina, and undergone a quadruple heart bypass. He has been visited in his home three times by three separate companies purporting to help him with the energy company obligation. Separately, his energy company, SSE, said “Go to Carillion as it will help you with the energy company obligation.” He has paid hundreds of pounds to get his loft cleared and his thin insulation removed, yet all those companies cannot provide him with the insulation he needs. He has spent hundreds of pounds and his home is now less well insulated than it was before. He is facing a very cold winter and I hope the Government will address that in their remarks.

6 Nov 2013 : Column 336

5.43 pm

Mr Michael Meacher (Oldham West and Royton) (Lab): I found the Secretary of State’s speech one of the most disappointing and unconvincing that I have heard for quite a time. It seemed to me that he was quite rattled—at times shrill; at times patronising—and perhaps that explains why he fled the Chamber the second it was over. He appealed for consensus with the Opposition at the start, but only on terms that suit his friends in the big six. His only proposal to reduce prices was by competition, which everyone can see has patently collapsed in the present semi-monopoly system. He had no plausible answer whatsoever for stopping the current gross overcharging. He spoke about transparency—which, of course, we all want to see—but never explained how the present excessive opaqueness could effectively be remedied within the present system.

It needs to be said at the outset that whatever opinion people in the Chamber, or outside, may have about an energy price freeze, this necessary examination by Parliament of the cost of living in general, and the cost of energy for the nation in particular, would never have happened had the Leader of the Opposition not put down a very powerful marker in his conference speech two months ago. The debate has thrown the Government into a tizzy, which they do not know how to handle. The Prime Minister was rushing around threatening to remove the green levies, which is the opposite of what he said a few months ago, and apparently forgetting that this is supposed to be the greenest Government ever. He was even beating his chest threatening all manner of action against the water industry for its price rises.

The Secretary of State was jerked into action, threatening to criminalise market manipulation, demanding yet another Ofgem investigation—is this the 18th?—into company profits, and proposing to speed up switching suppliers from five weeks to 24 hours, which is unworkable, because if all suppliers put up prices by roughly the same amount at about the same time, which is the experience we have had, it will make no difference.

The key point is that none of that flurry of activity to protect the consumer would have happened had not my right hon. Friend the Leader of the Opposition made a commitment to real action, which two thirds of the electorate immediately hailed as exactly what was needed. It is absolutely extraordinary that the Leader of the Opposition, who currently has no executive power at all, has exercised more influence over Murdoch and BSkyB, over Leveson and press regulation, over Syria and starting another war, and now over energy pricing and the cost of living, than all members of the Government put together.

Let us be clear on the key point, which is rather different from the understanding of many Government Members. An energy price freeze is not a policy programme in itself—of course it is not—but merely an important element in wider reform. As Opposition Members have made perfectly clear, it will be followed by a return to trading energy through a pool system, which will be more transparent than the current system, together with separation or unbundling of the different arms of the energy companies. They are currently vertically integrated, which means that they can both generate

6 Nov 2013 : Column 337

energy and supply it to the customer, which makes it very hard, if not impossible, to assess the extent of their profits, because they trade with themselves and with one another.

There are good reasons to review the current energy market structure and the business model on which it is based. Ever since Kyoto, global warming has made mitigating CO2 emissions the dominant challenge. The decline in the UK’s indigenous natural gas fields has made ensuring the security of supply and managing the energy sector’s impact on the balance of payments key objectives. Whether the liberalised market alone is capable of achieving those objectives automatically can be questioned—[Interruption.] Well, experience has shown that it is targeted on micro-efficiencies and on extracting egregious profits.

What has happened in the past two decades to deal with that policy fragmentation? There has been a persistent accumulation of directives, rules and subsidy schemes that are intended to cure the liberalised market of its intrinsic indifference to decarbonisation and the security of supply. All that has been programmed and overseen by a growing army of regulatory bodies, quangos and advisory institutions. We have thus ended up with the worst of both worlds—a byzantine industrial structure theoretically co-ordinated by the market mechanism, but one that nevertheless requires omniscient policy makers to mastermind everything it does. I submit that that is not sustainable.

With or without a price freeze, we face the distinct possibility of a capacity shortage—in other words, the lights going out—by the middle of this decade. If the lights go out, it will not be because of a temporary price freeze; it will be because a market based on a private oligopoly has not concentrated, and perhaps cannot be expected to concentrate, its efforts on fundamental issues of national security rather than on the short-term gains of senior executives and shareholders. Surely the lesson is that restructuring a broken and dysfunctional market is the key to solving the problem of crippling rises in energy prices.

As an emergency measure to stabilise a situation in which price hikes have clearly got out of control, and to provide leeway to introduce wider reforms, a limited price freeze is certainly needed. It is also justified, as other hon. Members have pointed out, when Ofgem data suggest that wholesale prices over the past year have been almost flat—rising by perhaps 1.7%—but retail prices are now being pushed up by the big six by between 8% and 11%. Indeed, according to Ofgem, some of the big six have seen their wholesale prices actually fall over the last three years.

The Prime Minister’s itch to roll back the green levies is a false economy, and not only because they represent such a small component of the rise in prices. The Department of Energy and Climate Change estimates that the full range of green policies—I am referring to the energy efficiency savings from earlier Energy Bill-funded schemes, the impact of policies on wholesale prices, boiler regulations and the EU minimum standards of electrical efficiency—will cut typical gas bills by 1% and electric bills by 11% in 2020.

6 Nov 2013 : Column 338

5.51 pm

Mr David Anderson (Blaydon) (Lab): Ever since the Leader of the Opposition made his speech in Brighton and we came back to Parliament, this issue has dominated the parliamentary system, especially in the Whitehall farce we see every week that is allegedly called Prime Minister’s questions, but should really be called Prime Minister’s deflections. We have had a series of throwaway remarks from the Prime Minister about the price freeze issue. He said last week that the problems could be resolved if everybody did what our leader did and switched companies. The Government have blamed the price rise in wholesale gas, but last week the Prime Minister came back and asked, “Who created the big six?”, as if he had not spent the last 42 months in power doing nothing about the power of the big six. That is all good knockabout, music-hall stuff, but I bet the people of Oldham, Liverpool and Washington, who have been spoken about in the last half hour, are not laughing as they sit at home shivering and wondering how they will pay the bills over the next few months.

Let us look at the Prime Minister’s case. Last week he had a go at our leader for switching electricity suppliers. Well, our leader is a canny lad and he might have saved himself £500 a year. But we need £110 million of investment, and it is a farce for the Prime Minister to point to an amount of £500 as a reason why we should not do something. He has blamed wholesale prices and said that the Government cannot control the markets, but privatisation was supposed to transfer the risk from the state to the private companies. Instead, it has transferred the risk directly to the people who cannot afford to pay—our constituents.

This is also a question of trust. Are we being told the truth about wholesale prices?

Mr Tom Clarke: I welcome the fact that my hon. Friend refers to wholesale prices. Does he believe that the regulators are as transparent as we would expect them to be when they examine something as important and influential as wholesale prices?

Mr Anderson: The regulator clearly admits not being fit for purpose. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned the report from 2008. Ofgem said then that it had not been transparent. The actual gas wholesalers are not transparent. I do not know whether hon. Members are familiar with the Henry hub, which is a pipeline and hub in Louisiana that distributes the vast majority of natural gas in the United States. It is also used as the name for the pricing point for gas prices on the markets in New York. Those prices are set in dollars per million BTUs—British thermal units. In April 2012, 1 million BTUs cost $1.95. In June 2008, they cost $12.6. So the cost was six times lower in April 2012 than it was in June 2008. Even now, it is only $3.62 per 1 million BTUs, yet we are told it has to go up because the price has gone up. How can we trust people who manipulate the figures?

On 6 September 2013, the US Energy Information Administration stated:

“The 36% decrease in the average natural gas price paid by manufacturers between 2006 and 2010, from $7.59 to $4.83…was large enough”—

but—

“Since that survey was conducted, natural gas prices have fallen further.”

6 Nov 2013 : Column 339

The people responsible for energy in the US are saying that prices have gone down, but we have been told that bills have had to go up so much because wholesale gas prices have gone up so much. Are we being misled? Is there a cartel? People say that there is not, but have we forgotten about OPEC? Have people forgotten what happened to us in the 1970s, when people literally had us over an oil barrel? Why should we expect more today from the same people?

The Prime Minister’s other deflection was about who created the big six. I will accept some responsibility, because I believe that my party did not do enough in government to control the energy market. Up until 2008, we did not get our act together and the huge price increase seemed to wake people up. The Conservative party, however, cannot get away from its history. It created the big six by its decision, in the 1980s and 1990s, to privatise the utilities industries. The Conservative Government started by dismantling the most technically advanced coal industry in the world, an industry that was leading the world on clean coal technology—could we not use some of that now? They then went and told Sid to buy shares in gas, electricity and water. They were actually using public money to bribe people to get themselves back into power. It worked very well for them, but the chickens are coming home to roost and the people feeling it are sitting at home at night wondering if they dare put the fire on. We have left billions of tonnes of coal under our feet to lie dormant, while we are being held to ransom by gas and oil companies. We have to bring energy into this country from the most unstable places in the world.

There has been a lot of talk in the past few years about carbon capture and storage. I had the pleasure of sitting in a Committee with the Minister and discussing how wonderful the green deal was going to be. That all led to nothing. The price freeze is welcome—it is a step in the right direction and people need it. What is also required is proper regulation by Ofgem, or whatever takes its place.

Debbie Abrahams: Does my hon. Friend agree with my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) that it is scandalous that Ofgem has not delivered on all the criteria it was meant to? That also fits into what my right hon. Friend the Member for Doncaster North (Edward Miliband) has pledged.

Mr Anderson: I find it scandalous, but not surprising. Ofgem was never capable of dealing with people who have spent lifetimes manipulating oil and energy markets throughout the world. Why should the world be any different from how it has been for a hundred years? That is one of the reasons why the people who came before us in this House had the sense to nationalise the energy utility sector. It could then be run in the interests of the people of this country, and not for the people who do not live in this country. All they want to do is siphon money off from the purses and wallets of the people we represent to fund their own profits. While I am not surprised, I am concerned.

My party has a problem. I am clear that unless we have control this situation will go on and on. We might have a 20-month window when we freeze prices, which is welcome, but what happens after that? Will companies be able to put prices up? We have been told that the market will be reformed in a way that will stop them doing

6 Nov 2013 : Column 340

that. Well, I will believe that when it happens. This probably will not go down well with my hon. Friends on the Front Bench, but anybody who listened to “Question Time” last week—the real question time where sometimes people answer questions, not just deflect them—will know that when it was suggested that we nationalise these industries again there was a huge cheer from the people in the room. They realise that without proper ownership we will never control these people. The people who went before us knew what they were doing.

We are coming up to the 25th anniversary of the privatisation of the utilities, and look what we are left with after 25 years of them having it all their own way. We have no security of supply and instead are relying on some of the most unstable countries in the world for our basic energy needs. We have not followed up on developing new technologies—where we once led the world—not just in coal, but in wind and wave and other things; on those things, we should be much further advanced than we are. We have a national grid that the people running it accept is not fit for purpose, and we have just stood back and let the companies get on with it. They have not upskilled the work force or trained it to meet the challenges of the future, because they have been too busy siphoning the money off into profits, and at the end of the day, the people carrying the can are the customers, our constituents.

At the Labour party conference, our leader said repeatedly that this country deserved better. We do deserve better, and it is clear that only Labour will deliver it. I am probably wasting my time, given that the invisible men of the Liberal Democrats are not even here—and there are only four Members of the major governing party here—but unless we vote for the motion tonight, this will not happen before 2015, and unless the people of this country vote for us in 2015, it will not happen then either. Ours are serious solutions for serious times. So far, all we have heard from the so-called leader of this country have been attempts to deflect responsibility with jibes, cheap jokes and humour. This is no laughing matter. We need to realise that this is a matter of life and death for the people whom we represent. We realise that, and so do the parties on the Government Benches, but they will not face up to it.

6.1 pm

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): I am glad for the opportunity to make a few comments in this debate. As for all colleagues—at least on the Opposition Benches—who have spoken, the issue of rising energy prices comes up every week in my surgeries and public meetings. It is utterly complacent for the Secretary of State to lecture us about rising disposable incomes, as if that were the solution to the problem and energy prices did not really matter. He should try and tell that to people who, on top of rising energy prices, have been forced to accept a drop in hours, a wage freeze or rising housing costs, which is the reality for millions up and down this country.

To date, the Government’s measures have not worked, as they have implicitly recognised, because if they were working, why would the Prime Minister have announced, on the hoof, his two major changes in energy prices? Last year, came the promise to put everyone on the cheapest tariff, which then became a promise to simplify tariffs, from which millions of energy customers will

6 Nov 2013 : Column 341

not benefit; then, this year, came the sudden review of green levies, which has now become simply the transfer of some energy efficiency measures into general taxation, or so it would appear.

The Government’s policies have not worked to date because they rely on claimed features of the energy market that, by themselves, have not and cannot bring about the required level of market reform and apply downward pressure on energy prices. First, as my hon. Friends have said, the Government are relying on competition, but as even the Secretary of State would seem to accept, competition is not bringing down prices. After all, given that the prices charged by the major energy companies all seem to rise at roughly the same time and at roughly the same rate, we may be excused for being sceptical about competition. We now seem to be relying on switching, but after three and a half years in power, the Government have realised that it is not as easy to switch as they suggested, so they are going to introduce measures to make it easier.

Mr Tom Clarke: I regret that I did not have time to refer to small businesses in my speech. Does my hon. Friend agree that small businesses do not welcome being asked to switch, in addition to all the other bureaucracy they have to deal with?

Mark Lazarowicz: That is a good point. One problem with relying on switching is that the Government’s measures do not tackle the problem of people switching and then finding it does not bring the expected advantages and so deciding to switch again. I have experience in my constituency of people who are tied into a year’s contract that they cannot get out of. Conservative Members gave the House examples of people making wonderful savings by switching, but I wonder whether those consumers will still find switching to be advantageous in a year’s time. I accept that switching is important, but it is ridiculous to suggest that it is a panacea, as the Government seem to be doing.

The Government are also relying on simpler tariffs to solve the problems. Unfortunately, the simplification is proving to be of much less benefit than first promised. Many customers are now worse off because of the simplification measures. I have highlighted the impact of the way in which Ofgem encouraged a return to the use of a standing charge—in order, it said, to simplify the charging system. This has resulted in many customers with low energy usage, who are often on low incomes, facing sometimes substantial increases. To be fair to the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), he agreed to meet me when I raised this issue, and we were due to meet today. The meeting had to be postponed because of this debate, but I shall certainly press him on this issue in due course.

The Government know that their policies are not making an impact on energy prices, and that is why the Secretary of State and the Government as a whole have been running round like headless chickens trying to come up with a response to the clear set of policies outlined by my right hon. Friend the Member for Doncaster North (Edward Miliband), the party leader, and by my right hon. Friend the Member for Don Valley (Caroline Flint) at the Dispatch Box today.

6 Nov 2013 : Column 342

The Government appear to be relying for a solution on the transfer of some of the cost of energy efficiency measures to general taxation, which will have some limited impact on energy bills. A move in that direction might have some theoretical merit, although we would all want to see how it would be worked out in practice and, above all, how it would be paid for. As my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) has just pointed out, however, none of these measures would have been put forward by the Government, were it not for the plans announced by Labour.

The Government’s proposed measures will have only a limited impact. They, and the similar measures that the Scottish National party have proposed for Scotland if it were to be independent, also suffer from a big weakness—namely, that transferring the cost to general taxation would let the energy companies off the hook. That would lessen the pressure on them to keep prices down. It would also create the risk that the limited saving to customers would gradually be eaten up by price rises imposed by the companies to take up the slack—unless such measures were accompanied by Labour’s price freeze or a similar measure to prevent the companies from taking advantage of the price cut.

Labour’s proposals for an energy price freeze are clear, coherent and comprehensive. They would make a real difference to consumers, households and businesses up and down the country, and that is why I support the motion. I hope that some Government Members will join us in the Lobby, but that seems unlikely, given that so many of them appear to regard this issue as so unimportant that they have not even taken part in the debate. Their constituents will certainly not hold them in high regard for being absent from a debate on such an important issue.

6.8 pm

Ian Lavery (Wansbeck) (Lab): Thank you for calling me to speak in the debate, Mr Speaker. I have been in the Chamber most of the day, but I had to go to a debate on the draft deregulation Bill, which I see as a punishment. I apologise if I repeat points that have been made in my absence.

This debate is really worth having. This is the most important issue in the lives of ordinary people up and down the country. It is great to see so many people supporting Labour’s proposal for a price freeze, because it means so much to them. It could make a difference of between £120 or £130 a year to families who are struggling to put bread on the table. Since 2010, the average household’s energy bill has increased by more than £300 a year. Energy companies have increased their profits on the back of spiralling energy bills for hard-pressed households. Energy prices have rocketed, and they are set to increase again in the near future. Only this week, Ofgem’s latest electricity and gas supply market indicators have shown that the typical domestic dual fuel bill stands at £1,420 a year, in stark contrast to the £1,105 at the time of the general election in May 2010.

One of my great concerns in life is people living in poverty, including people who are in fuel poverty. Ministers have admitted that, despite a recalculation and reconfiguration of the how the fuel poverty figures are arrived at, the number of people in fuel poverty is expected to rise in the next two years. The recalculation was supposed to reduce the figures, but they will increase

6 Nov 2013 : Column 343

in any event. Figures from Ofgem this week show that the wholesale costs have increased by only 1.7% this year, while bills are up on average by more than 9%; and 60% of the levies, which the Government blame for putting up energy bills, were introduced by this Government.

Ordinary people are entitled to know why these bills have been increased. People are at a loss to see why their bills are escalating. For the first time I can remember—as I look around, I see that I am one of the youngest, of course—people in this country cannot afford to buy energy. They simply do not have enough money to buy energy to keep themselves warm. Is that what we politicians want—giving people the choice between heating their homes or eating with their families? I am not being dramatic; it is a fact of life. If anybody has any doubts about that, they should come to me and I will introduce them to people who are heavily in debt and cannot manage their everyday costs.

I am greatly concerned about the trading system and the cartels that have been described today. We met energy companies last week and tried to get some information from them, but it is very difficult to achieve that. The trading systems appear to be mysterious. How do these companies trade? People are not sure about that. How do these companies trade in the long term, and how do they trade in the short term? How do these big six companies trade at all? It is a real mystery. The Government need to find out more about it, and Ofgem needs to investigate it. Ofgem does not even ask the energy companies for their trading figures. That is illuminating, and there is no reason why that should not form part of the regulatory reform of energy companies’ responses to Ofgem. There is a real sense of financial jiggery-pokery. The mystery of the big six is seriously outflanking a Government who forget the misery of increasing numbers of people in fuel poverty yet support the monsters who create such despair. We really need to tackle this.

When I came back into the Chamber, my hon. Friend the Member for Blaydon (Mr Anderson) was mentioning the various options and said that it looks as if this energy market is broken. How can we fix it? The energy companies are crying crocodile tears, claiming that they cannot make ends meet, while at the same time they are making fortunes. The boss of Centrica said only yesterday that profits of £2.7 billion were modest. That is a profit of £7.4 million a day or £86 a second. These chief executives and secretaries and senior managers are receiving massive bonuses too—bigger bonuses than premiership footballers. These wages structures makes premiership footballers look as if they are on workfare. We need to look at that.

Let me end by saying something rather controversial. I really believe that the system is broken. If prices are being increased twice or thrice every year on a uniform basis by a cartel, and if all these people are saying that they cannot make ends meet while directors are making fortunes and shareholders billions, we need to look at that as well. Is it not time for us to break up the cartel? Is it not time for us to consider different options? Is it not time for us to do what was suggested by a member of the Energy and Climate Change Committee the other day—it was not a Labour Member—and consider adopting co-operatives such as those that operate in New York, and indeed elsewhere in America and in Canada, enabling the public to own part of the system?

6 Nov 2013 : Column 344

Mr Anderson: My hon. Friend is, as always, making an excellent speech. I am pleased that he has mentioned America, because the American Government’s Energy Information Administration has said not just that the cost of natural gas to manufacturers fell by 36% between 2006 and 2010, but that at the same time the total cost of energy fell by 11%. Can my hon. Friend remember whether we in this country saw a 36% or even an 11% drop in bills during those four years?

Ian Lavery: That is the very point that I want to make.

I said that I was going to be slightly controversial. If the directors are creaming off billions, the shareholders are making millions, and the only people who are suffering are the consumers, who, for the first time in my lifetime, cannot afford to pay for electricity or gas, the system is broken. If we do not change that system, it will be in a really dangerous state.

I am going to say what some people are dreading hearing me say. There should be a serious investigation to establish whether the entire electricity system and the big six should be returned to some form of public ownership. That would enable us to control what we owned as a Government, and, most important, we would be able to ensure—because the Minister would ensure—that ordinary people, particularly the most vulnerable members of society, would not be cold in winter. We would prevent 24,000 or 25,000 deaths. It is a dodgy subject, and people are frightened of it, but we cannot control what we do not own, and we are not controlling the energy companies.

6.17 pm

Caroline Lucas (Brighton, Pavilion) (Green): I am very pleased finally to have an opportunity to contribute to this important debate, because it concerns a crucial issue that is raised with me time and again by my constituents. We should bear in mind that, as many other Members have said today, behind all the statistics that often dominate debates such as this are real people and real suffering. We are talking about people who wake up with ice on the inside of their windows, and about people who huddle in a single room because that is the only room that they can afford to heat.

More than 1.5 million children in he United Kingdom are growing up in cold homes. Each winter, four times as many people are killed by fuel poverty as are killed on Britain’s roads, and fuel poverty-related illnesses cost the national health service more than £1 billion every year. I think that, given that background, few would deny that we have an energy bill crisis. In the context of the Fuel Poverty Advisory Group’s warning that fuel poverty affects 6 million households, the profits of the big six are deeply offensive. Between 2008 and 2010, their profits doubled to £4.6 billion. Last year, Centrica alone made profits of £1.3 billion, no doubt benefiting in a range of ways from the secondments of its employees to the Department of Energy and Climate Change and from its boss Sam Laidlaw’s influence as a former member of the Prime Minister’s business advisory group. That is just one example of the revolving door between the big fossil fuel companies and Whitehall, which was similarly well oiled under the last Government.

A temporary bill freeze would be a welcome respite from price hikes which, as the Committee on Climate

6 Nov 2013 : Column 345

Change has reminded us, are mainly due to increases in the price of gas. I called for a price cap, along with a windfall tax on big six profits and a public inquiry, almost two years ago, on one occasion during a Westminster Hall debate in February 2012, and many Labour Back Benchers signed my early-day motion on the subject. I support the relief that a temporary price freeze would bring, so I shall vote in favour of the motion, but we also need a much more ambitious, far-reaching and coherent response. I hope that today the Opposition parties will be able to unite behind calls for a radical reform of the energy market as well, because I believe that that is the only way—and a permanent way—in which to tackle high energy bills, and I hope that they will get behind effective measures to break the stranglehold of the big six.

As Fuel Poverty Action says:

“Freezing prices at their current level won’t help the thousands of people who already die each winter due to fuel poverty: our bills are already at deadly highs”,

so I want to set out five practical, positive and powerful policies to tackle fuel poverty this winter and for winters to come.

First, the only permanent solution to the Energy Bill crisis is to make all our homes much more energy-efficient, so I am disappointed that there is no mention of energy-efficiency in the motion, especially as the green deal barely scratches the surface. Under the energy company obligation, at current rates it would take about 32 years to insulate all fuel-poor homes. Insulation rates are plummeting when they should be rocketing, and energy-efficiency businesses, often SMEs, are struggling when they should be flourishing.

That is why a huge coalition of organisations representing consumers, families, faith groups and others all back the Energy Bill revolution campaign. It calls for revenue from carbon taxes, which currently disappears into Treasury coffers, to be recycled into a nationwide programme to make all homes super energy-efficient, with full insulation, modern boilers and renewable energy such as domestic PV, solar hot water and biomass heating. That could bring nine out of 10 homes out of fuel poverty, lower people’s bills, deliver four times more carbon cuts than current schemes and create 200,000 jobs. I again ask both the Government and the official Opposition why they will not support it.

Mandatory efficiency standards are crucial, too. Some 70% of Britain’s fuel-poor live in properties with bottom of the barrel energy-efficiency ratings of E, F or G. A genuine fuel-poverty strategy must, at the very least, commit to lifting all these properties to band D standards by 2020 and raising the rest of our housing stock to today’s new-build standards by 2030.

Secondly, we need ambitious fuel poverty eradication targets. I want to highlight a coalition amendment that was sneaked in during the Lords Committee stage of the Energy Bill. Astonishingly, Ministers are trying remove the statutory duty on Government to eradicate fuel poverty. They are replacing it with a vague provision to do something at some point merely to address the situation of those in fuel poverty, and all in secondary legislation, thereby reducing accountability and scrutiny. As the fuel-poor prepare for the onslaught of the cold and avoidable winter deaths, I trust the Minister and the

6 Nov 2013 : Column 346

Opposition will rethink their position and give strong cross-party support to the fuel-poverty amendment tabled by Lord O’Neill of Clackmannan when the Bill returns to this House.

The Committee on Climate Change has confirmed that by far the greatest contributory factor to higher energy bills has been the rising price of gas. That makes the Government’s dash for gas deeply irresponsible. It will increase our dependence on gas with higher energy bills, as well as fatally undermine our hopes of tackling climate change. That is the third area where we need urgent action. This also makes Labour’s position of conditional support for shale gas inconsistent with its enthusiasm for a 2030 decarbonisation target and its rhetoric on affordable energy.

There is an alternative to gas. Renewable energy can go hand in hand with affordable energy and can help cut our exposure to high and volatile fossil-fuel prices. While fossil fuels are on an upward cost trajectory, renewable technologies have seen dramatic price falls in the past few years. So if we are serious about creating an affordable energy system, we should be going all out for renewables and energy-efficiency.

Fourthly, we should be doing much more to end the big six’s control over power generation and supply, not regulating them better, not just erecting a paper wall between their generation and supply businesses, not just requiring them to sell their power through a different structure. If we are serious about diversity in the energy market and cutting costs by allowing renewables to push down wholesale peak prices of power, we need to ensure renewables are given priority access to the grid.

We have an opportunity to create a radically different energy system, where co-operative and community and independently-owned local renewable energy schemes flourish. In those circumstances, local people benefit from the energy created. The Belgian co-operative Ecopower provides energy for over 30,000 members. Denmark guarantees that 20% of all energy projects are open for community financing. In Germany over half of all the installed renewable energy capacity is owned by private citizens and co-operatives. That is the sort of transformative scale of community power we should be aiming for here, too. It is where the greatest wins for households and business energy bills can be secured. Projects such as the Brighton Energy Co-operative in my constituency provide a glimpse of an incredibly positive alternative energy future where people are active producers rather than just passive consumers.

Community energy should be central to the debate about energy bills. Words alone will not deliver, however; we need policies and action. For every community to generate its own electricity, we need a regulatory framework that allows communities to buy the electricity they generate at wholesale costs, freeing them from the rip-off retail market.

Mr Weir: I am very interested in what the hon. Lady is saying. Does she agree that the Government’s obsession with nuclear—in particular, the strike price agreed for Hinkley Point—shows that they are going totally in a different direction?

Caroline Lucas: I thank the hon. Gentleman for his intervention, because it makes exactly the point that I want to move on to. For as long as both the Opposition and the Government are committed to these huge subsidies

6 Nov 2013 : Column 347

that are going to be behind nuclear power, their outrage at energy bills sounds a bit thin—it beggars belief. The size of the subsidies that will go to nuclear power will lock us into extremely long periods of paying over the odds to companies such as EDF. The rate of return on investment reportedly given to EDF is a whopping 10%—that is 10% profits, guaranteed for decades, going from our constituents to EDF, one of the big six. Why is it acceptable for UK bill payers to be fleeced in order to provide a rate of return to EDF that is double that which Ministers have said they see as fit for renewable projects—schemes that could be owned by communities themselves? Let us not forget that Hinkley Point C will not boil a kettle until the early 2020s, at best, by which time many renewable energy technologies will be a much better deal when it comes to keeping energy costs down.

Mr Weir: Hinkley Point C will start boiling a kettle on that date only if it is built on time, and no nuclear reactor has yet been built on time or on budget.

Caroline Lucas: I thank the hon. Gentleman, who must have been looking over my shoulder, because these are exactly the points that I would make. When we compare nuclear with renewables, we see that in some cases renewables are already cheaper. They are also asking for a strike price of £91 by 2018, which is substantially less than what we are going to be giving to nuclear.

Consumer Futures said that the Hinkley deal

“moves the risks of future variations in wholesale prices from investors onto consumers, will likely see household bills increase and will distort future investment in electricity generation.

Consumers will again feel that the energy market is stacked against them.”

I just cannot understand why there is not greater outrage at the way in which we are allowing ourselves to be locked into these long contracts with EDF, paying over and above market prices for decades to come. I repeat that it is hard to take seriously the crocodile tears we are seeing from hon. Members on both sides of the House while we are suggesting paying hand over fist to the nuclear companies, which will be laughing all the way to the bank.

In conclusion, I welcome the greater focus on the problem of high energy bills that we have seen in recent months. It is a massive issue in all our constituencies; people come to us on a daily basis worried about how they are going to be able to survive the winter. It is a matter of life and death, not just of discomfort; we are talking about people who are going to be suffering from radically ill health and about the premature deaths associated with fuel poverty. So I welcome this debate, but I regret that most of the solutions put forward do not fully address the root causes of fuel poverty and high energy costs. A fundamental shift should be at the heart of energy market reform. I am worried that we have heard much more about tinkering around the edges of a system that keeps the big six in power and far too many people in fuel poverty, rather than about much more radical energy transformation, which we are beginning to see in other countries. There is a precedent and we could be following it here—if the political will existed.

Madam Deputy Speaker (Dawn Primarolo): I call Christopher Pincher. [Hon. Members: “Hear, hear.”]

6 Nov 2013 : Column 348

6.27 pm

Christopher Pincher (Tamworth) (Con): I thank you, Madam Deputy Speaker, and my legion of fans. I apologise for not being here for the opening exchanges of this important debate, but I had to attend a funeral. I congratulate the Opposition on tabling this motion but, in as much as we are discussing long-term structural energy issues, as much as it is a challenge to the Government, it is also an admission by the Opposition of their failure during their 13 years in government, when they had the time, the money and the majorities to make changes but did not do so.

The shadow Secretary of State said, with characteristic chutzpah, that we need to develop more home-grown energy. Of course, she is right, but the question then must be: why during 13 years of Labour Government was no new nuclear power station opened? The last to open was in 1995 and the next will be opened under a Conservative-led Government in the future. Labour also had no keenness to explore shale gas. These things the Labour Government failed to do. Labour Members have said that we need greater competition in the energy market—

Dr Whitehead rose—

Christopher Pincher: I will not give way, because I am on borrowed time—[Interruption.] In a parliamentary sense. In addition, both the Opposition spokesman and the and Treasury Bench spokesman need to speak.

The Opposition have said that we need greater competition in the energy market. They are right, but the energy market as it stands—the big six—is Labour’s creation. The right hon. Member for Oldham West and Royton (Mr Meacher) called it an oligopoly, but it is Labour’s oligopoly and the Opposition must take some responsibility for that, as the hon. Member for Blaydon (Mr Anderson), who is now shaking his head, said in his speech.

The Opposition have now suggested that we should fix prices under a price freeze for a period of time so that we can right the market. If something looks too good to be true, sounds too good to be true and smells too good to be true, most right-thinking people would say that it is too good to be true. A price fix is too good to be true.

Fixing prices, as many experts have said, will only mean that the energy companies will hike their prices in anticipation of that fix. That means that people will be paying artificially high prices, particularly if the wholesale price falls during the period of the freeze. It is not just me who is saying that; Professor Dieter Helm is saying it, too.

The Opposition also say that we need to get more competition into the energy market, but if we listen to Steve Fitzgerald, the darling of the Select Committee who ran rings around some of the players from the big six at that meeting, or to First Utility, the Leader of the Opposition’s provider of choice, we hear them say that a fix will make it more difficult to operate in the market. It will not allow small players in and will entrench the position of Labour’s big six. The Labour party ought to admit that.

The Opposition also say that investment will flow into our infrastructure anyway. I do not believe that is true. We need to spend at least £110 billion in the next

6 Nov 2013 : Column 349

10 years on our power stations, our pipes and our pylons to keep the lights switched on and we need much of that investment to come from private companies. The hon. Member for Southampton, Test (Dr Whitehead), who made a thoughtful speech and is my colleague on the Energy and Climate Change Committee, said that he does not believe that the energy companies will invest that sort of money. We learned in the Select Committee inquiry just a week ago that E.ON alone has invested £7 billion in its generating capacity over the past five years. If we extrapolate that over the big six, that would suggest that they are spending some £40 billion on the infrastructure we so desperately need.

If the investment dries up because of a price freeze that sends the wrong message to the markets, the poor old taxpayer—the van driver, the nurse, the doctor, the teacher and the pensioner—will have to pick up the tab. That is why I think the Opposition’s proposal is a con. It is a scam. It is a swizz. It is voodoo economics. It is political charlatanism. They know it and the electorate can see it, too. What we need is not some artificially high price freeze in the future but price cuts now. That is what our electorate want and what our constituents tell us. If we roll back some of the green levies that account for some £112 on the average dual fuel bill, if we make it easier to switch, saving people some £200, and if we get people on to the lowest tariffs, saving them about £158, we can reduce bills now for hard-pressed consumers. That is the way to deal with our energy challenge.

The proposals made by those on the Labour Front Bench might look good and might sound good on television, but we and our voters know that they are not going to wash.