argyrotsipi/train-dataset huggingface dataset:
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
John David Penrose (Conservative, Centre-right): I rise to speak to amendments 2 to 4, which stand in my name and those of a variety of Conservative colleagues, including two members of the Business, Energy and Industrial Strategy Committee as well as former Ministers and Cabinet Ministers I should pause to say that I am not arguing against the Bill overall—I spoke and voted in favour of it in principle on Second Reading—and I hope that everyone involved in the campaign I have headed in this area for the past year and a half appreciates that I believe an energy price cap is much needed. I pay tribute to the 214 cross-party MPs who signed up to the idea, plus the Prime Minister and the Minister, who have all been vital in getting us to this point today My concern is about not the principles but the detail—the type of price cap envisaged under the Bill—because, to put it bluntly, a fair number of free market Tories are pretty concerned that we are choosing the most anti-competitive, complicated, bureaucratic and inflexible cap on offer. It is inflexible because the Bill specifies an absolute cap that will be set by an all-knowing committee of Ofgem regulators every few months. However, the international price of energy moves around every day, and it is impossible to know what the price will be in the next six minutes, let alone six months, so the cap price will be out of date in moments and will stay out of date until it is reset again months later. That means it will not protect customers in the way we all want and, because it will be officially blessed by Ofgem, it will embed and legitimise high prices. It is not just me who is worried. Which? says it is "not certain that customers on a capped default tariff will benefit as market conditions change in future" The proposed cap is also complicated—hideously complicated. Why? The assiduous folk at Ofgem have already started publishing details of how they might go ahead and they are warming to their task. It would not be just a single cap, they say; it would be 42 different ones to cover gas and electricity, different meter types and different parts of the country. There would be more than 42 different caps, however, because each one may be split into several different versions depending on whether people pay by direct debit or in some other way, and each will have a fixed standing charge and a variable element—oh, and there is headroom, too. Each of those three items can be calculated in a marvellously technical and complicated variety of ways. For example, the variable element could use a basket of market tariffs, an updated competitive reference price, or a bottom-up cost assessment. Those things might be calculated using a periodical review of realised costs, or third-party data with pre-specified allowances for certain cost items, and so on and—turgidly, complicatedly—on.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
Oliver Letwin (Conservative, Centre-right): My hon. Friend and I have had an engaging conversation about this for many months, but given all the things he reports Ofgem as planning, surely that means we will have not a single point tariff that rapidly becomes outdated, but rather a tariff that will respond—for example, to input costs?
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
John David Penrose (Conservative, Centre-right): As my right hon. Friend says, he and I have had many conversations about this over many months. I can only say to him that if his argument is that Ofgem might come up with a version of an absolute cap that is a bit less absolute and a bit closer to what I am proposing—in effect, one that caps the gap: a relative cap—I would agree with him that that is a good thing, but if that is the case, as a source of advantage for the cap, why would it not be even better to go the whole hog and have a relative cap in the first place?
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
John David Penrose (Conservative, Centre-right): Yes, absolutely. We heard from the hon. Member for Southampton, Test (Dr Whitehead) what I thought was actually rather a good explanation about why such a cap is so wonderful. The Opposition disagree about the purpose, but the fundamental reason why we are all in the Chamber is that we agree about the injustice in the way the energy market works at the moment, which is that people can start off on one tariff and then get secretively pushed on to a much higher one. It is the clandestine mark-up that riles everybody and really upsets people. By definition, a relative cap would affect what is hacking everybody off, and it would be precisely targeted on dealing with the mischief that is the reason behind the Bill in the first place.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Macroeconomics
Mark Julian Francis Pawsey (Conservative, Centre-right): My hon. Friend is talking about people moving from a competitive rate to the default, which he describes as the standard variable tariff. Does he think that people would be less inclined to put up with the higher rate if it had an alternative name, such as an "emergency tariff"?
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
John David Penrose (Conservative, Centre-right): There is now a whole range of underlying pro-competitive reforms—I am not normally one to give Ofgem a vast amount of credit, but it really deserves some in this case—that are needed in this market. Renaming the default or standard variable tariff may not have a huge effect, but it might have a positive effect. There is a series of other things, some of which are even more important, that must happen. It is crucial—I agree with the Labour spokesman about this, as I think we all would—that we do not waste our time and that Ofgem continues to reform the market while this temporary price cap is in effect because, when the price cap comes off, we will want the market to have been sufficiently reformed that no further price caps are necessary, because it works like a normal market in which the customer is king. If we have not done that, we will have wasted our time and everybody else’s. I was talking about the complications and the hideous complexity of Ofgem’s proposals, but if all that inflexibility and complexity has not put Members off already, they should have a look at the bureaucracy. Pretty much every free market economist will agree that the best way to discover a price is not through a committee that meets every couple of months, but with a genuinely competitive market in which supply and demand are matched from moment to moment all day, every day. Fortunately, we just happen to have one of those handy. The switching market is full of deals on which energy firms compete like mad for business. It is innovative; it has razor-sharp prices; and it takes changes in wholesale energy costs in its stride every day of every week. The customer is, in other words, genuinely king or queen That is, as we have just discussed, exactly what we want to see in the rest of the market, so why are we ignoring it? Why go for a far less competitive version that is inflexible, hideously complicated, bureaucratic and committee-based when we could simply tie rip-off default tariffs firmly to the switching market and go down the pub for a drink? The mechanism, as we have heard, would be simplicity itself: a maximum mark-up between each energy firm’s best competitive price and its default tariff—we would cap the gap. Unlike with the arrangements in the Bill, there would be just one decision for regulators to take: the size of the gap. Everything else would be taken care of by the link to the competitive switching market.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
James Stephen Heappey (Conservative, Centre-right): I am grateful to my hon. Friend—my neighbour—for giving way. Has he given any thought to what a relative cap would do for time-of-use tariffs, the arrival of which we should surely be encouraging? They rely on a big differential from free or negative pricing to the most expensive prices, which disincentivises energy use at peak times. Is he concerned as I am that what he proposes might discourage the arrival of such tariffs?
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
John David Penrose (Conservative, Centre-right): Much would depend on the size of the cap on the gap proposed by Ofgem, and much would depend on the rest of the pricing structure of the energy firm in question with regard to where it chooses to put its default tariff. Many of these things are, as my hon. Friend points out, yet to arrive. They are starting to be introduced, but they are a relatively new innovation, with small but growing penetration. He is absolutely right that we need to make sure that we do not disincentivise such tariffs. They certainly will not be to everybody’s taste, but they may be to the taste of an increasingly large number of people I would prefer to start from a simple cap—capping the gap—and then have to make a couple of adjustments, rather than making even more complicated something that is, as I have described, already hideously complicated. If we manage to take care of all the complexity and bureaucracy by establishing a link to the competitive switching market—hey presto!—we will have driven a stake through the heart of the rip-off tariffs. Switching supplier would still be worth while, and there would be far fewer jobs for bureaucrats, lawyers and lobbyists. The customer would be king My amendments would make a relative cap either possible or required, depending on which version was chosen. I do not expect or intend to press the amendments to a Division, but I want everybody to realise that there is a more competitive, more flexible, less bureaucratic, more customer-friendly and generally better alternative, and that at the moment we are not taking it It is not just free market Tories such as myself who think that capping the gap is the right way to go. The Labour Front-Bench team, as we have heard, have tabled an amendment that proposes something similar. They might disagree with my description of it, and they have a fancy-schmancy name for it, but, broadly speaking—as my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) pointed out earlier—the wording is very similar and the amendments would effectively do the same thing Labour Front Benchers and I disagree over timing, however. The effect of their proposal would be permanent, whereas ours would be temporary while we fixed the underlying anti-competitive problems in the market. There is, none the less, clear cross-party consensus on the principle, at the very least, so why does the Bill ignore this cross-party opportunity? Why are a notionally pro-competition Conservative Government choosing the less competitive, more bureaucratically inflexible and more complicated version instead? Why are we snatching defeat from the jaws of what ought to be a famous free market victory? I look forward to hearing the Minister’s answer.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
Stephen Charles Kerr (Conservative, Centre-right): It is a great privilege to follow the hon. Member for Leeds West (Rachel Reeves), the Chair of the Business, Energy and Industrial Strategy Committee There was no shortage of energy—or capping of energy—at yesterday’s Stirling Scottish marathon. There was, however, a lot of evidence of determination, particularly as competitors approached the finishing line despite the agonies that some were obviously going through. There was a great deal of grit on display. In addressing amendment 9, it is a lack of grit and determination—almost supine passiveness—that is causing me to have grave concerns about how Ofgem goes about its business During prelegislative scrutiny of the Bill, the Select Committee held an evidence session, to which my hon. Friend the Member for Eddisbury (Antoinette Sandbach) referred earlier. I am sorry to have to say this, but I was unimpressed by the evidence presented in January by Dermot Nolan, the chief executive of Ofgem. He did not come across as a person with an appetite for what I feel needs to be done. He lacked that grit and determination. He admitted to my hon. Friend that, in respect of Ofgem’s statutory duty to protect vulnerable customers, "I accept the point that we could and should have done better on vulnerable customers. We have relatively recently put in place principles for vulnerability, which will give a stronger level of protection." When the hon. Member for Hove (Peter Kyle), who is not in his place, challenged Dermot Nolan on what was in effect an admission of failure on his part to fulfil his statutory responsibility towards the protection of those who are vulnerable, he answered: "We have not done as well as we could have. I fully accept that." This perturbs me. It perturbed me then and it perturbs me now. The hon. Gentleman, who is an esteemed member of the Select Committee, seemed to me to hit the nail firmly on the head when he said to Dermot Nolan: "If you do not mind me saying, throughout the testimony here and before, you have been describing what is happening in the market; you are the single most important player in the market, because you have the most extraordinary powers as a regulator, yet your testimony sounds so incredibly passive. Do you ever just roll your sleeves up and get stuck in? I do not really see the evidence of that." I share the concerns expressed so vividly by the hon. Gentleman Since becoming a Member of this House last year and having the privilege of being appointed to the Business, Energy and Industrial Strategy Committee, I have had the opportunity to hear first-hand evidence and testimony from a number of regulators. I have, in all honesty, been underwhelmed by every one of them.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
Mark Julian Francis Pawsey (Conservative, Centre-right): My hon. Friend is giving an account of the evidence given by Ofgem to the Select Committee. Does he share my concern that the Bill would give that very body the powers to set the energy price cap?
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
Stephen Charles Kerr (Conservative, Centre-right): I am grateful to my hon. Friend for his intervention. I share the concerns—I think they are shared across the whole House—about the performance of Ofgem as a regulator. I have broader concerns about the general performance of regulators full stop. Frankly, we seem to have a collection of regulators who either have powers but do not seem to be prepared to use them, or who do not feel they have adequate powers but are not prepared to ask for them. That seems incredible to me. I am very wary of leaving the issue of vulnerable energy customers to the discretion of Ofgem, because I am fearful that the discretion of Ofgem will mean that it will continue, by its own admission, to fail vulnerable customers This is an important issue that needs to be aired here and now on Report. Ofgem needs to sit up and take note. It is also important that we hear from the Minister, from the Dispatch Box, what change in the pattern of behaviour we should expect to see from Dermot Nolan and Ofgem. Will they have the determination and grit of the marathon runners in Stirling yesterday? Will they do something with the powers they currently have and the powers they will have when the Bill is passed? Above all, I want the Government to fulfil the promise of our Prime Minister who, on behalf of the Conservative party, said: "Our party did not end the unjust and inefficient monopolies of the old nationalised energy corporations only to replace them with a system that traps the poorest customers on the worst deals" I am fearful that that is what we could do. I look for reassurance from the Minister.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
Andrew Iain Lewer (Conservative, Centre-right): I welcome the opportunity to speak on the Bill and the amendments. Millions of consumers in the UK are facing challenges with their energy bills, and I find it outrageous that loyalty is punished by some energy companies. It is counterproductive, especially for those speaking up for the free market. We must be careful, however, not to commit the politician’s syllogism from "Yes, Minister": "There is a problem. Something must be done. This is something, so let’s do this." The amendments seek to ameliorate that I am not a great believer in the idea that the gentlemen in Whitehall know best when it comes to running energy, and I worry that the idea that said proverbial gentlemen in a panel are best placed to determine energy prices gives succour to Labour ideas that it, as the state, is best placed to run the whole sector. The fact that Labour does believe that is precisely why I would not support any of its amendments but will stick with a Government who, notwithstanding their occasional prices and incomes board-type moments, represent a strong—indeed, the best—bulwark against socialism I will not go into huge technical details other than to praise the work and determination of my hon. Friend the Member for Weston-super-Mare (John Penrose), who has argued for a more dynamic solution to this problem, proposing a maximum mark-up between the ultra-competitive, consumer-friendly deals and the default tariffs that loyal customers pay. I supported his amendments and the intention to point out a better way of stimulating the market towards greater fairness via relative cap mechanisms Nevertheless, the fact is we are facing an urgent problem for which we need an urgent solution. To this end, I will support the Bill with—and, indeed, because of—the added sunset clauses, for which I thank the Minister, and which make this a temporary measure up until 2020. I hope that comments from me and others will point the way ahead at that time.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
William Grant (Conservative, Centre-right): It is a pleasure to follow the hon. Member for North Ayrshire and Arran (Patricia Gibson). It is clear that the energy market is not working for the consumer, and with that in mind, I am pleased to support the Bill. However, I firmly believe that these additional measures must be temporary. Permanent Government intervention in the energy market of the kind that is proposed in new clause 1 is, I believe, unnecessary. Indeed, things are already changing. As recently as 2010, there were only 13 energy suppliers in the United Kingdom; now there are well over 60. Independent suppliers are growing and, rightly, posing new challenges for the big six. They already account for some 20% of the dual fuel market The basis of healthy competition is enabling consumers to go elsewhere with relative ease if they find a better deal. Nearly 20% of households a year already switch suppliers. By making switching quicker and easier, we can make that figure even higher and force big suppliers to stop taking long-standing customers for granted as they have done for many years There are now about 10 million first-generation smart meters in operation in the United Kingdom. While the roll-out is progressing, there is a long way to go to meet the ambitious target of 53 million by 2020. In the context of the Bill, a key element is the roll-out of the SMETS 2 meters, which is due to begin this year. SMETS 2 consumers will benefit from quick and easy switching, and the meters should be intelligent enough to identify the lowest tariff. They have the potential to be a real force for competition in the energy market. At that point, there will be no need for the price cap, which is why it would not be prudent to introduce a permanent relative cap. It would be bad for customers, and it would work against the positive changes that will be made over the next few years New clause 1 is the product of a belief that markets simply do not work. As a Conservative, I believe that they can work. I note the progress that we have made, and the progress that we will make in the coming years. I acknowledge that the market needs the temporary cap, and I support the Bill as a means of protecting consumers, not only in my constituency but throughout Scotland and throughout the United Kingdom. I am sure that it will contribute to a reduction in the very real fuel poverty that some people endure.
Domestic Gas and Electricity (Tariff Cap) Bill — House of Commons, 2018-04-30
Topic: Energy
Michelle Emma May Elizabeth Donelan (Conservative, Centre-right): I am delighted to speak about the Bill, having supported it throughout this Parliament and having been a member of the Bill Committee. I think it important that, when considering the new clauses and amendments, we consider the fundamental aim of the Bill, which is to guarantee protection for the 11 million households that are currently on the highest energy tariffs—as well as the 5 million vulnerable households that are already protected by Ofgem’s prepayment meter safeguard tariff cap—by introducing a measured temporary intervention to correct a market that is currently letting down and ripping off thousands of people in my constituency, and millions throughout the country New clause 1 would allow the Secretary of State to make requirements in relation to a differential between the cheapest and the most expensive rates offered by suppliers: in other words, a relative price cap. In practice, that would mean that once effective competition was in place in the market—or by the end of 2023 at the latest —and that tariff cap was removed, a maximum differential between the most expensive and the cheapest tariffs would be introduced. That goes against the principle of the Bill, which is to ensure that it is temporary. This should be a temporary measure to correct the market, and it should not allow Government intervention to remain permanent. This Bill is based on a mandate that came out of the Conservative manifesto, which set out a temporary intervention.