15:00 Anas Sarwar (Glasgow Central) (Lab)

Last week, we saw the big six sit before the Select Committee on Energy and Climate Change and claim that prices in the past few years have been driven by wholesale costs, when it has already been demonstrated that that is not the case. That was confirmed by some of the smaller companies, one of which told the Committee:

Is the hon. Gentleman aware of the purchase of renewable energy in the Republic of Ireland?

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15:11 Charles Hendry (Wealden) (Con)

We have heard reference to the decarbonisation target, but there is nothing in the motion about how that can be met. The measures in the motion would make it harder to get the investment we need to reach that target. Labour is going back to what it has done before, setting grandstanding, ambitious targets without putting in place the road map necessary to meet them. When we came into government, we had to put in place the renewables road map and the fuel poverty road map to address some of those challenges.

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15:21 Mr Jim Hood (Lanark and Hamilton East) (Lab)

I was once told that if someone stands by the side of a river and watches the logs go down, like the tide of mankind, they will see them float back again if they stand there long enough. I was reminded of that when I watched the energy company executives giving evidence to the Energy and Climate Change Committee last week. That exotic gathering of four had in its midst three representatives of the big six. Their evidence mimicked the three wise monkeys. They saw no evil in the hiking of energy prices, they did not hear the universal condemnation of their greed, and they spoke in glowing terms of their care and compassion while British consumers are suffering charges that have been fabricated by their rigging of the market.

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15:31 David Mowat (Warrington South) (Con)

It is refreshing that we are here talking about reducing energy prices. In a lot of energy debates, I usually go through the Division Lobbies trying to stop the Opposition from increasing energy prices. We have divided, for example, on the decarbonisation target and on a perfectly respectable and reasonable proposal from the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), to reduce the solar tariff from six times grid parity to four times grid parity. As I mentioned earlier, Labour tabled an amendment in the House of Lords last night that will increase bills. Let us agree, however, that we are on the same side, at least in terms of our objective—we want to decrease bills.

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15:42 Albert Owen (Ynys Môn) (Lab)

I am a member of the Select Committee on Energy and Climate Change and we had a robust discussion with the energy companies last week. Let us be honest. We hear the Government talking about Labour’s big six, and the Prime Minister leads on that. They forget that in 1993, Sir John Major—that Marxist, who has been accused of being a red by many people for wanting to intervene in the market—set up the integrated system we have now and allowed the then big three to dominate the energy market. Let us not take any lessons about how the big six were set up. Flawed privatisation policies and the former Prime Minister’s interventions allowed the companies to be both generators and retailers. That is the situation. I know that it does not sit comfortably with the Conservative party, but it is a fact and I challenge the Minister to say otherwise.

I am certainly happy to do that. I sat on the Committee that considered the Energy Bill in 2008, which helped many places. It even helped to set up the Hinkley Point agreement that we just reached. The Liberal Democrats voted against the Bill. The Energy Act 2010 gave more powers and responsibilities to the regulator to deal with prices. I remind the Minister that we did not get into office in 2010 and I wish that he would use those powers, which he and his party supported at the time. I am happy. We enacted the Climate Change Act 2008 and we set up the Nuclear Decommissioning Authority to deal with legacy waste in our country. We have a record of which we can be very proud.

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15:54 Tessa Munt (Liberal Democrat)

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.

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15:58 Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)

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.

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16:26 David Morris (Morecambe and Lunesdale) (Con)

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 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.

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.

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17:23 Sharon Hodgson (Labour)

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.

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17:32 Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)

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.

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17:43 Mr Michael Meacher (Oldham West and Royton) (Lab)

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.

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.

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18:01 Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)

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.

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18:08 Ian Lavery (Labour)

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?

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18:17 Caroline Lucas (Brighton, Pavilion) (Green)

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 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.

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.

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.

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.

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 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.

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18:27 Christopher Pincher (Tamworth) (Con)

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 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.

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18:33 Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)

Let me address the thrust of the lengthy and at times tortured speech made by the Secretary of State. It is a shame that he is no longer in his place, but he explained that he would have to leave and I am sure that the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), will report back to the Secretary of State the comments made this afternoon. The Secretary of State started by mentioning consensus on the Energy Bill. As the Minister knows—and as his colleague, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon), who is now in his place, will recall from his involvement in the final stages of the Energy Bill, after his two predecessors started the process—we scrutinised the Bill and, on balance, supported many of the measures contained in it. However, on Second Reading—the Minister, the right hon. Member for Bexhill and Battle, can check Hansard and pass this on to the Secretary of State; we said it then and again afterwards—my right hon. Friend the Member for Don Valley (Caroline Flint) warned that the Energy Bill

The hon. Member for Angus (Mr Weir) talked about the reviews. He will know that the one announced by the Government is the 18th review since 2001. He spoke about the measures announced at the Scottish National party conference for a separate Scotland to reduce bills by £70 by moving ECO from consumer bills on to the tax bill. He neglected to mention that the pooled support for renewable energy for Scotland, which is paid across the whole of Britain, would not exist in the same form. Scotland has 8% of the population and more than a third of that support, which is spread across all the bill payers in Britain, as he well knows.

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18:46 The Minister of State, Department of Energy and Climate Change (Gregory Barker)

For 13 years, Labour Members let real competition wither while consumers were bombarded with a blizzard of tariffs that, under their watch, grew to over 400. For 13 years, they failed to simplify bills and increase transparency. For 13 years, they failed to build the foundations of a safe, clean energy future. For 13 years, they failed to build a single nuclear power station or get an agreement to do so. For 13 years, they saw Britain languish at the bottom of the European league table for deployed renewable energy. Labour Members stood by and watched British energy go bust. Now they want another go, but we have not finished undoing the damage they did last time.

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