13:02 John Penrose (Weston-super-Mare) (Con)

Under these proposals, energy firms would still be able to compete on price—they could still decide whether they wanted to be the Aldi or Lidl of the industry, or the Waitrose or Marks and Spencer—and could still have as many tariffs as they wanted, so there would be plenty of customer choice. If someone wanted a green energy tariff, that would be fine. If someone did not like computers or wanted to do it the old-fashioned way with offline paper and an ink deal, that would be no problem.

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13:20 Mr Iain Wright (Hartlepool) (Lab)

This is slightly unusual for me, but allow me robustly to defend the Government. The phrases that npower and other companies have used about the cost of Government schemes are simply wrong. The Committee on Climate Change today published its analysis of energy prices and household costs, which showed that 9% of the average dual fuel bill for domestic customers is accounted for by the cost of moving towards a UK-based low-carbon electricity supply and support for energy efficiency home improvements. The notion that energy companies can justify price increases through Government action or policies is simply disingenuous.

My hon. Friend makes an important point. It is worth everybody reading that report from the Committee on Climate Change. Does he accept that part of that 9% of the bill goes on helping people—sometimes the poorest in our communities —to reduce their household bill by introducing energy efficiency measures? It is a worthwhile 9% investment.

Absolutely, and as my right hon. Friend, who has done fantastic work on this, knows all too well, energy efficiency measures are a key plank of ensuring our competitiveness, tackling fuel poverty and addressing our decarbonisation targets. Everybody wins when energy efficiency measures are prioritised.

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13:42 Caroline Flint (Don Valley) (Lab)

In 2011, when I became shadow Energy and Climate Change Secretary, I advised the Government that energy bills were soaring, but they did nothing. In October 2011, the then Prime Minister convened an energy summit and proposed to write to millions of consumers about switching, but that did not work. In November 2013, Mr Cameron tried a different approach: “get rid of all the green crap,” a senior source reported him as saying.

As has been touched on in this debate, the big six always like to divert discussion of bills on to green levies, even though investment in renewable energy and low carbon energy is exerting a downward pressure on wholesale prices. It is ironic that domestic consumption of energy, in kilowatt hours, has gone down, but we are paying more in our bills. The former Prime Minister said, “get rid of the green crap”, and he did so. The Government shortly afterwards reduced some of the environmental obligations and network charges and cut bills by between £39 and £50. Unfortunately, that year energy bills rose by an average of £120, so that did not work.

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14:04 Kerry McCarthy (Labour)

Other MPs will have in their localities the new breed of municipal energy providers, which provide a very different offer from that of the big six, with fairer rates and cleaner energy. Bristol Energy was set up fairly recently by Bristol City Council. Bristol Energy is a national company, so anyone can switch to it, but there is a special tariff for people with a Bristol postcode. It was set up to help local people, as well as people from outside the city who want to join in, to pay less for their energy and to provide a new way to raise funds for the city, as all the profits will be reinvested back into Bristol. Its standard variable tariff is significantly cheaper than that of the big six—on average, £105 cheaper—and it keeps its fixed deals fair, too. It is currently trialling a warm homes plus tariff, to bring households in Bristol out of fuel poverty. This non-profit-making tariff is only available by referral, and Bristol Energy is working with the citizens advice bureau, the council and Bristol’s Centre for Sustainable Energy on those referrals. It is looking for 1,000 people to put on this tariff to start with, limited to a year, to help lift them out of fuel poverty. As I have said, the profits will be invested back into the city. In the longer term, we want to be really ambitious in tying energy in with the waste sector. I was told on one visit to a waste plant on the outskirts of the city that it is reckoned that Bristol’s waste alone could generate enough energy to heat 250,000 homes. That has absolutely to be the way forward: a local solution to a local problem.

Much greater transparency—as a first step, the inclusion of a breakdown of costs behind each of the tariffs, as well as the wholesale energy and transmission costs, and add-ons, including green energy—with an improved annual renewal notice along the lines of motor insurance, would encourage more switching, but I believe we need to go further still. We also need some kind of price controls for those on standard variable tariffs, and I urge the Government to pick up my right hon. Friend’s proposals for capping these tariffs.

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14:35 Dr Alan Whitehead (Southampton, Test) (Lab)

We have seen eye-watering price increases lately. A number of companies have raised the price of dual fuel by 10%, and there have been double-figure increases in electricity bills from others. The companies justify their increases on the basis of a combination of wholesale prices and the Government’s environmental measures, and even—as we have heard recently—the impact of smart meters. The problem is that we have no easy way of assessing the extent to which those claims are justified. However, as was emphasised by my right hon. Friend the Member for Don Valley, we need to lay one canard to rest, and that is the suggestion that price rises are a result of low-carbon levies. They are not. As we heard from my hon. Friend the Member for Hartlepool, the recent report from the Committee on Climate Change indicated that, overall, only 9% of bills result from Government energy measures. Indeed, not only are those energy measures not a huge part of the overall bill, but they will contribute to decreasing bills in the future by decreasing demand, by increasing energy efficiency, and, in terms of renewable energy, by changing the merit order of energy supply so that eventually the wholesale price of energy can be driven down over a period.

“to the rise in non-energy parts of the bill such as social and environmental schemes which support renewable energy and help customers use less energy”?

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