Domestic Energy Bills

Energy and Climate Change – in the House of Commons at 10:30 am on 7th July 2011.

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Photo of Gregg McClymont Gregg McClymont Labour, Cumbernauld, Kilsyth and Kirkintilloch East 10:30 am, 7th July 2011

What recent discussions he has had on domestic energy bills with representatives of the six largest energy companies.

Photo of Bill Esterson Bill Esterson Labour, Sefton Central

What recent discussions he has had on domestic energy bills with representatives of the six largest energy companies.

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

What recent discussions he has had on domestic energy bills with representatives of the six largest energy companies.

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

Department of Energy and Climate Change Ministers and officials regularly meet energy suppliers to discuss market issues, and this afternoon I will be hosting an energy summit for small, non-big-six suppliers, to discuss the barriers they face to competing in the market, with a view to making sure it is as easy as possible for them to enter it.

Photo of Gregg McClymont Gregg McClymont Labour, Cumbernauld, Kilsyth and Kirkintilloch East

Bringing the Secretary of State back to the issue of the big six energy companies, do they do enough to make vulnerable customers aware of their potential eligibility for a social tariff, and if they do not do enough, what will the Government do to make sure vulnerable customers are made aware of their potential eligibility?

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

The hon. Gentleman raises an important question, especially as we approach the winter months. As he may know, we have put the warm home discount scheme on a legislative basis and it is absolutely crucial that our targeting efforts continue. We are doing a lot of work, not least with the Department for Work and Pensions, to try to ensure that we can identify the people who will be most in need, and of course the green deal, which will start next year, will prioritise those in fuel poverty so that we tackle the root causes of the problem and do not merely seek to apply a sticking plaster—

Photo of Bill Esterson Bill Esterson Labour, Sefton Central

The Secretary of State did not answer the point about the big six, so I will give him another chance. We have some of the highest energy prices in Europe. What action is he taking with the big six to ensure that electricity and gas prices in this country are fair for those whose living standards are being squeezed by his Government?

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

The hon. Gentleman is incorrect about the comparison with other European countries’ electricity and gas prices. In fact, in both cases our prices are among the lowest. They could certainly be lower, and I am determined to try to make sure that we have the maximum competition in the market, because in my experience that is always the best guarantee that the consumer will get the best deal. That is why we want more companies to enter the market, and the electricity market reform will encourage more market entrants on the generator side. That is also why in the long term—

Photo of Barbara Keeley Barbara Keeley Shadow Minister (Communities and Local Government)

The charity Age UK predicts that rising energy bills will take 250,000 more pensioners into fuel poverty, and those pensioners are under-heating their homes by rationing their consumption of fuel and thereby increasing their exposure to potential ill health, misery and depression. What action will the Secretary of State take to ensure that gas and electricity prices are fairer, something that the Prime Minister promised those pensioners?

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

As I said in a previous answer, we are doing two very practical things. One is providing the warm homes discount and ensuring that it is made available to those most in need; the other is ensuring that we tackle the root causes of these problems. There is another key issue for anyone facing high energy bills is the need to switch, as I have been trying to encourage them to do. As the hon. Lady may have noticed, customers of the big six who are already on dual fuel direct debit accounts could have saved between £160 and £200 in 2010 merely by getting on to the cheapest tariff available at the beginning of the year.

Photo of Robert Smith Robert Smith Liberal Democrat, West Aberdeenshire and Kincardine

But for people to make the savings they need to understand what they are being charged. Does the Secretary of State think that there could be improvements to and reductions in bills and that the market could be opened up if there was more clarity on the tariffs available and less confusion about what things were going to cost?

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

I entirely agree with my hon. Friend, and what he describes is one of Ofgem’s objectives in tackling this issue. It is also one of the objectives we are introducing in legislation: we want to ensure that people can see on their bill that there will be a clear alternative with the same supplier at the cheapest tariff.

Photo of Jo Swinson Jo Swinson Liberal Democrat, East Dunbartonshire

The big six seem very quick to put prices up, but they act much more slowly to reduce their prices when wholesale prices fall. There are alternatives out there, such as the social enterprise Ebico, which supplies energy on a not-for-profit basis. What more can the Secretary of State do to make customers aware that they do not need to stick with the big six if they are being ripped off?

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

The key is to encourage people to act. At the moment 99% of people are with the big six, and they are very unlikely to look at alternatives and to switch. If we can get people to look more comprehensively on a regular basis at alternatives, substantial savings can be made, and we can drive greater competition, we can simplify bills, we can bring more new entrants into the market, we can make sure that Ofgem is keeping that market under review and we can give the best possible deal to British consumers.

Photo of Meg Hillier Meg Hillier Shadow Secretary of State for Energy and Climate Change

We have heard a lot of warm words from the Secretary of State today, and before the election the Prime Minister made promises about what he would do to tackle energy price increases if he got into power. We have seen these huge price increases, and customers are rightly confused and angry, so what is the Secretary of State going to do right now to tackle this problem? The electricity market reform is all very well, but we could deal with issues relating to doorstep selling and smart meters. There is action that he could take now, so I would like to hear what he is planning to do to help consumers today.

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

As the hon. Lady knows, much of what we can do takes time, but we have already, in just over a year in government, moved to legislate on the warm homes discount. That means that we will be providing a legal underpinning for the scheme which will help our poorest consumers and those most at risk in fuel poverty. We are also moving on energy saving and moving to increase competition in the market. We are trying to provide assurance and an increased ability to switch, and to simplify tariffs. That is quite an agenda, and none of it was being undertaken by the previous Government.