Part of the debate – in the House of Commons at 2:48 pm on 3 July 2009.
I congratulate my hon. Friend Mr. Todd on his choice of subject—it is an important subject, and he showed a great command of it—and on the timeliness of this debate, to which he referred. To the events that he described at the beginning of his speech, I would add the publication yesterday of the Government White Paper, "A Better Deal for Consumers: Delivering Real Help Now and Change for the Future". A lot of the publicity that the White Paper received, yesterday and today, was about those consumers with personal debt, but there are relevancies to this debate. For example, in the White Paper, there is mention of breathing space relief for consumers who are overburdened with arrears on their utility bills and other secured debts. There are to be reviews of how effectively energy and water suppliers protect vulnerable customers from disconnection. There is to be help for customers with problem debt, and programmes to reduce household energy bills.
It is to the great credit of my right hon. Friend the Secretary of State that within my portfolio at the Department of Energy and Climate Change I have responsibility for consumer interests. I appreciate that the Department is young, but this is a first and I believe it is a very welcome development. I agree with my hon. Friend that we need to be active and demanding in relation to consumer concerns about energy, and I am happy to take on that responsibility.
With that in mind, let me say at the outset that the Department regards it as essential that all consumers should have confidence that they can use energy reliably, safely and affordably. I regard the description of "consumer" as all-encompassing, so, for example, it incorporates industrial and commercial consumers of energy, just as it covers domestic householders. My job is to ensure that consumers will be treated fairly by the companies that deliver our energy. I want everyone to have confidence in the rules and arrangements under which those energy companies operate. In particular, that means that people and organisations should have the right help and information to make good decisions about the way they buy their energy, and about how to save energy and save money.
Last year, the gas and electricity regulator Ofgem registered public concern about prices, and about other aspects of the energy supply markets. Ofgem responded by launching a detailed probe into the energy supply markets. I have seen Ofgem's report of those findings. Ofgem concluded that the markets were working well overall and that there was no evidence of collusion between companies in the sector, but it also discovered some areas where real improvement is needed.
Ofgem's work revealed that many consumers were suffering significant disadvantages in what they were paying for their energy. Some practices relating to prepayment meters may have attracted most public attention and reporting at the time, but there were also broader issues of unfair charging, as described by my hon. Friend today. Under pressure from Government and the regulator, suppliers have taken action to remove those unfair practices, and that is a start, but all the suppliers need to continue to take responsibility for putting an end to such practices and avoiding any repetition in future.
Ofgem is in a position to make changes to the suppliers' licences to secure better, fairer practices from now on, and I shall be watchful to ensure that consumers get the benefits of these changes. I want people and organisations to have confidence that they will be treated fairly however they pay for energy, and that they will be properly and clearly informed about charges. They need to know that suppliers are competing actively and fairly for their custom. We would all like to see such problems solved more quickly. Nevertheless, the Ofgem probe has been of great value. It has provided evidence to show where specific problems are. It is only with such evidence that the right changes can be made to achieve real improvements.
As my hon. Friend said, clarity is an important factor for householders and business customers alike. Ofgem's investigation showed that consumers are not always able to make the best choices about tariffs, payment methods and energy use. Ofgem accordingly proposes new obligations on suppliers to provide clearer information to their customers which includes a standard annual statement including the tariff name, the customer's consumption and a reminder of the right to switch, and simplified information on tariffs to make comparison easier, including a clear price scorecard.