Retail Energy — House of Commons, 2017-10-12
Topic: Energy
Rebecca Long-Bailey (Labour, Centre-left): I thank the Secretary of State for advance sight of his statement Just two years ago, the then Prime Minister criticised Labour’s energy price cap policy, saying we wanted to live in a Marxist universe. Well, we certainly are in strange political times, that’s for sure. It has taken an extraordinary amount of time to get to this stage and enormous pressure from the shadow Front-Bench team and hon. Members on both sides of the House. It is impossible, however, for the price cap to protect families this coming winter. Ofgem has indicated it would take about five months after the Bill’s Royal Assent for the regulator to enact a price cap. Owing to the Government’s dithering, the 4 million households in fuel poverty, almost 1 million of which include a disabled person, will now face another winter of cold homes or astronomical bills. Will the Secretary of State explain why it has taken so long? Labour has been consistently calling for action and clarity on the Government’s position since the election and for a price cap for several years, but even today several issues require further clarification First, will the Secretary of State confirm why the draft Bill, which I have just perused, does not provide any direction from him on his preferred cap parameters but instead passes the ball to Ofgem? Will it be a relative cap or an absolute cap? Will he direct Ofgem to implement a different cap if he is not content with the one it proposes following the review? Secondly, will he confirm how long he anticipates the Bill’s passage taking and whether he will take any ancillary measures to expedite the usual scrutiny process Thirdly, reports this morning stated that the cap would apply to 12 million households, but the Bill is not clear on the cap parameters, as I have said, and leaves much to the discretion of Ofgem. Will the Secretary of State confirm, then, why the Government have seemingly rowed back from the commitment to knock £100 off the bills of 17 million households? Surely this should be explicit in the Bill or ancillary directions to Ofgem Fourthly, the Secretary of State is no doubt aware that Labour would introduce an immediate emergency price cap to ensure that the average household bill remains below £1,000 a year, which would save the average big six customers £142 a year. Had the cap been in place since 2010, the average customer would have saved more than £1,000 on their bills by now. Does he anticipate, in all this ambiguity, that the final cap will go anywhere near Labour’s proposals? If not, by how much does he expect bills to be reduced, if at all Finally, we are discussing the need for an energy price cap in the first place only because our energy market is fundamentally broken—even the Prime Minister acknowledges that. Labour understands that the price cap is only a temporary fix and so would radically reform the market by, among other measures, creating a publicly owned, locally accountable energy supply company in every region and ensuring greater transparency and fairness in the pricing structures of the supply and wholesale energy market. Does the Secretary of State accept that a price cap, although welcome, is only a sticking plaster and that radical reform of the market is necessary If so, how and when does the Secretary of State propose to reform the energy market and will he direct Ofgem to do it, rather than simply calling for a review, as the draft Bill suggests? Or have we got to wait until 2020 and the outcome of such a review before we see any real action? I hope that we do see action before 2020 because the cap is only guaranteed for the next two winters. Homes and businesses up and down Britain face a bleak winter and—it seems—further ambiguity and uncertainly regarding the Government’s position on the price cap mechanism and the wider reforms our energy market desperately needs.