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Energy Prices and Profits

Part of Opposition Day — [6th Allotted Day] — Living Standards – in the House of Commons at 4:45 pm on 4th September 2013.

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Photo of Caroline Flint Caroline Flint Shadow Secretary of State for Energy and Climate Change 4:45 pm, 4th September 2013

I am going to make some progress.

Alongside our proposals for a more competitive open energy market, the motion calls for a much tougher regulator than we have had in the past. As I said earlier, in its report the Select Committee echoed many of our criticisms of Ofgem over the past year. I do not intend to rehearse all those criticisms, as it could take some time, but I want to urge the House to support one important change. In a properly competitive market, cost reductions should be passed on as quickly and as fully as cost increases. At the moment, when wholesale costs increase, bills go up like a rocket, but when wholesale costs fall, bills fall like a feather, if at all. That is why our motion calls on the House to support the establishment of a tough new regulator with a statutory duty to monitor the relationship between the prices that energy companies pay for their energy and the bills that the public pay and the power to force the companies to cut prices when wholesale costs fall.

Why is this all so important to the public? Rather than never having had it so good, as the Government try to tell them, rising energy bills are one of the main reasons why they are finding it harder and harder to make ends meet. Even in better times, though, the public deserve a fair deal. This problem is not confined to the poorest. Millions of people are facing real hardship because of a cost-of-living crisis reinforced, I am afraid, by the Government’s complacency over soaring energy prices, incompetence in helping the public to insulate their homes and indifference to the plight of our oldest citizens paying over the odds for the energy that they use. Last year, there were 24,000 excess winter deaths in our country. Even on the Government’s revised definition, well over 2 million households are in fuel poverty, and the gap between their bills and what they can afford to pay is growing ever wider.

The Opposition’s job is to scrutinise the Government and hold them to account, but it is also to develop alternative ideas to tackle the challenges that the country and its people face. The risk, of course, is that the Government pinch them. Today I tell the House that, with the Energy Bill still going through Parliament, if our proposals can help to restore people’s faith in the energy market and get people a fairer deal, I gladly offer them up. I commend the motion to the House.