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Wholesale Energy Prices

Energy and Climate Change – in the House of Commons at 9:30 am on 19th March 2015.

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Photo of Phillip Lee Phillip Lee Conservative, Bracknell 9:30 am, 19th March 2015

What assessment he has made of the effect of recent trends in wholesale energy prices on household energy bills.

Photo of Stephen Metcalfe Stephen Metcalfe Conservative, South Basildon and East Thurrock

What assessment he has made of the effect of recent trends in wholesale energy prices on household energy bills.

Photo of Amber Rudd Amber Rudd The Parliamentary Under-Secretary of State for Energy and Climate Change

All the major suppliers have announced reductions to their standard variable gas tariffs in recent weeks in response to reductions in the wholesale gas price. The price of fixed-term deals has continued to fall, with the cheapest deal on the market £100 cheaper than the cheapest deal a year ago. The Competition and Markets Authority has made it clear that it will be looking further at the relationship between wholesale costs and retail prices as part of its investigation.

Photo of Phillip Lee Phillip Lee Conservative, Bracknell

I thank the Minister for her reply. The news about prices and bills is all very welcome, but does she agree that the next Conservative Government—as I hope and expect it will be—should concentrate primarily on energy efficiency? This would bear down on household bills and, indeed, bills for businesses, while also conserving our planet’s finite resources and helping to secure this great nation’s energy supplies in future.

Photo of Amber Rudd Amber Rudd The Parliamentary Under-Secretary of State for Energy and Climate Change

On this account, my hon. Friend is absolutely right: energy efficiency is indeed the best way to help people and that is why it has been a Government priority for the past few years. He is also absolutely right that the benefit is not only in keeping bills down, but in conserving our resources.

Photo of Stephen Metcalfe Stephen Metcalfe Conservative, South Basildon and East Thurrock

Is my hon. Friend as surprised as I am that the Labour party is still pursuing its policy of a price freeze? If a price is frozen at a high level, surely the danger is that when the market settles at a lower level, my constituents will end up paying more than they are now.

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons

Order. The Minister must not be led astray, away from the path of virtue, by her hon. Friend. She will know that she must not talk about the policies of the Labour party. Her responsibility is with the policy of the Government. A brief and pithy reply on that matter would be in order, but nothing beyond.

Photo of Amber Rudd Amber Rudd The Parliamentary Under-Secretary of State for Energy and Climate Change

Thank you for that guidance, Mr Speaker. My hon. Friend makes an excellent point, revealing the confusion being caused among his constituents. I hope they will make the right interpretation and support him and this Government in the future.

Photo of Barry Gardiner Barry Gardiner Shadow Minister (Environment, Food and Rural Affairs)

The drop in wholesale energy prices has allowed Governments around the world—including India, Indonesia and Egypt—to reduce the subsidies to fossil fuels in a way that is commensurate with the proposals of the United Nations framework convention on climate change and the Intergovernmental Panel on Climate Change. However, in yesterday’s Budget the Chancellor gave a £1.3 billion subsidy to our fossil fuel industries. What does the Minister make of that paradox?

Photo of Amber Rudd Amber Rudd The Parliamentary Under-Secretary of State for Energy and Climate Change

The hon. Gentleman, who is well respected in this area, should identify the difference between taxation and subsidy. The point of my right hon. Friend the Chancellor’s announcement yesterday is that North sea oil is an important part of our industry and employment. We still feel there is more to be done in the extractive industries and we should support them despite the fall in oil prices.