Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
Patricia Gibson (Scottish National Party, Centre-left): I am delighted to support the Bill, and I am glad to have worked with the hon. Member for Weston-super-Mare (John Penrose), who was instrumental in its introduction and in pushing for the cap. It is disappointing that Ofgem required five months in which to implement it, but at least we shall have it in time for winter 2018 The amendments to support and protect vulnerable and domestic consumers during the cap’s implementation are of course welcome, and it is right for the Minister and Ofgem to take account of the distinct needs and circumstances of vulnerable consumers when setting the cap, but since entering the House I, like the hon. Gentleman, have developed a healthy scepticism in my opinion of the way in which regulators, including Ofgem, go about their business—or not, as the case may be More than a quarter of households that contain a disabled person—27%, or about 4.1 million—spend more than £1,500 a year on a year on energy, and 790,000 of those spend more than £2,500. In my constituency, consumers are overpaying for electricity by £5.5 million a year. There is no denying that high energy costs have a serious impact on disabled people’s financial resilience. They limit those people’s ability to access employment and training and savings, and their ability to participate fully in society. Vulnerable and disabled consumers face higher energy costs than any other consumers, and that must be factored into any consideration As we heard earlier, the amendments that are intended to establish either an ongoing tariff differential or a relative cap are simply not robust enough to ensure that consumers would ultimately benefit from them. There is a risk that both the relative tariff differential and the relative cap could trigger unintended consequences, such as energy companies’ raising their minimum tariffs to meet the required difference from their maximum tariffs. That poses a series of questions about consumers’ interests. Indeed, stakeholders such as Ofgem, the Government and Citizens Advice have warned that a relative cap would not prevent overcharging and might simply result in price increases for the best-value tariffs. There is widespread agreement that an absolute cap is the best option if overcharging is to be prevented. Moreover, a relative cap might decrease the number of people switching providers or tariffs, which would clearly not be in the interests of consumers We need to know more details of the criteria that Ofgem must follow when conducting its review of competition for domestic supply contracts under clause 7. Those criteria are set out in amendment 8. It is essential that the Minister and Ofgem are as transparent as possible when setting the targets, so that the price cap does what it says on the tin. The hon. Member for Wells (James Heappey) spoke about time of use tariffs. I am extremely suspicious of those, because they will inevitably penalise families with children, who have little flexibility when it comes to controlling when they use their energy. I do not think any of us want that.