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Energy Prices and Profits

Part of Opposition Day — [6th Allotted Day] — Living Standards – in the House of Commons at 5:56 pm on 4th September 2013.

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Photo of Albert Owen Albert Owen Labour, Ynys Môn 5:56 pm, 4th September 2013

My hon. Friend is absolutely right; it was complex. I recall a conversation that I had with the new chief executive of E.ON, who has a master’s degree in mathematics. He told me—he has also said this in public—that he could not understand an E.ON bill because it was so complex. He has now taken steps to simplify the bills.

Energy markets are not delivering the low, stable prices that we were promised at the time of privatisation. The short-term profits that are said to have resulted from the privatisation of gas have meant long-term pain for many of our constituents, who have been paying higher prices for their gas and electricity in recent years. Switching is not an option for everyone, and it has not been taken up by the majority of people. We are paying high prices for our gas and electricity and the switching of tariffs is not working.

There is also mistrust between the public and the energy companies, as we have discussed in a number of debates. It remains a concern that prices are rising quickly, and that the price to the consumer goes up considerably when the global price of oil increases but does not go down nearly so quickly when the global price is reduced. I believe that there is consensus between the Government and the Opposition that we should examine that issue with the regulator, to establish how best to deal with it. Ofgem has done some good work on that already. However, I have to take issue with the Secretary of State’s comment that he was putting pressure on the regulator and that all the good results were coming from that Government pressure. When things do not work out quite so well for the consumer, the regulator is described as independent. The Secretary of State cannot have it both ways. The regulator is independent, and I believe that it needs more teeth. It also needs to use some of the powers that it already has.

In the time that I have left, I want to talk about the possibility of giving Ofgem a wider remit in regard to people who are not on mains gas, of whom there is a considerable number. I have been campaigning for them since about 2007, when gas prices became a real issue. The prices went up, but for those who are not on the grid, they went up considerably more. That has become a huge issue. The alternatives to mains gas are oil and other forms of gas.