Sir George Young: I am very grateful to the right hon. Gentleman for his contribution. The answer to the first section of his question is yes, that is exactly what we have in mind: an open, accessible register of statutory

19 Oct 2011 : Column 919

lobbyists. On the other issues, we propose to consult on what exactly a lobbyist is. I think the definition should embrace what people outside generally believe to be lobbying and should be comprehensive. On the question of what activity is then caught, we would be very grateful for his views during the consultation process.

Charlie Elphicke (Dover) (Con): May I welcome the Leader of the House’s statement? The Select Committee on Public Administration is looking into how we can do more to fix broken politics. I particularly congratulate him on ending the sofa government that we saw in the past as well as the tidal wave of sleaze, and I urge him to take action on the revolving door that still persists for former Ministers of this House.

Sir George Young: The revolving door is an issue I addressed in my statement and we are tightening up the process for it. I am delighted to hear that the Public Administration Committee, which originally proposed the statutory register in its report, is thinking of returning to this issue and I hope that it will inform the Bill when it is introduced.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): On 10 October, I asked the then Defence Secretary when he was first made aware of concerns by his permanent secretary. He said that

“I was not aware of any direct approach from them. The first direct approach I can remember was when my current permanent secretary came to me in August”.—[Official Report, 10 October 2011; Vol. 533, c. 30.]

That leads to two questions. Either the then Defence Secretary misled the House and he was made aware of that before then or the previous permanent secretary has some serious questions to answer. These things have been going on since he took office and for more than a year concerns have arisen and nobody has done anything. The civil service must look at its own conduct in how it makes people aware when things go wrong.

Sir George Young: I think it is clear from the report that things did go wrong in the Ministry of Defence. That was accepted in the permanent secretary’s initial report. Procedures were not followed and we are learning from that and ensuring that there is no recurrence.

James Morris (Halesowen and Rowley Regis) (Con): Is it not the case that my right hon. Friend the Member for North Somerset (Dr Fox) has resigned and that the Cabinet Secretary’s report could not be clearer that there was no breach of national security and that my right hon. Friend did not gain financially from any of these arrangements? Is not the most important thing now for the debate to move on? We have important operations in Libya and Afghanistan that we must focus on in the national interest.

Sir George Young: I agree with my hon. Friend. We have commissioned a report, we have found out what went wrong, we have made recommendations to put it right and we have learned the lessons. I agree that we should now move on.

Mr David Anderson (Blaydon) (Lab): Both in questions to the Prime Minister and during this statement today, the question of whether other Ministers have behaved

19 Oct 2011 : Column 920

in a similar manner has been raised. The Leader of the House has made it clear that anyone who wants to make allegations should do so. I do not think that people are making allegations—they are raising the general worry that the rest of the population of this country feels. If someone as experienced as the former Secretary of State allowed this to go on, thinking that it was reasonable, surely it is possible that other Ministers, equally unwittingly, might be doing the same thing. Would it not benefit us all if the Cabinet Secretary were to look into all these things to ensure that there is not any other concern?

Sir George Young: I understand the hon. Gentleman’s point, but in the last Parliament a number of Ministers from his party had to resign. We never made any suggestion that because one Minister had broken the code, all Ministers had broken the code, and it is important that similar accusations should not be made in this Parliament.

Chris Bryant (Rhondda) (Lab): The trouble with the idea of trying to move on is that we are seeing a pretty shabby pattern in which the Prime Minister is given evidence, refuses to look at it but holds on for dear life to as many of his friends as he can. It happened with Coulson and it has happened again now. Now there is evidence about the hon. Member for Bexhill and Battle (Gregory Barker) and his apparent adviser, Miriam Maes. Will there be an investigation into that, too?

Sir George Young: On the first point, to say that the Prime Minister refused to look at the evidence is simply absurd as he looked at it, published it and has acted on it. As for the issues concerning the Department of Energy and Climate Change, the matter has been resolved. The person concerned is an adviser to the Department and not to a Minister.

Mr David Winnick (Walsall North) (Lab): Is the Leader of the House aware that some good has come out of all this, as it has shown up the whole murky world of various shady and dubious lobbyists and various individuals who have contributed heavily to the Tory party? One thing is absolutely clear: the Tory party has not changed from last time it was in office.

Sir George Young: It would be easier to take the hon. Gentleman seriously on this had he not voted against a specific amendment to promote transparency in lobbying.

Jonathan Ashworth (Leicester South) (Lab): A few moments ago, the Leader of the House said—if I heard him correctly—that other Ministers would be perfectly happy to reveal whether they had meetings with Mr Werritty. Will he therefore tell the House when we will get a full and comprehensive list of all meetings between Ministers and Mr Werritty and whether it will extend to senior officials, too?

Sir George Young: It has already been put in the public domain for a number of Government Departments. It will be put in the public domain by the rest of the Departments very shortly.

Huw Irranca-Davies (Ogmore) (Lab): How many Government Front-Bench Members have received donations from Pargav Ltd and will the Leader of the

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House investigate that? May I urge on him caution about the defence of bringing forward evidence? The last time that was used was on the 10th of this month and the former Secretary of State subsequently resigned, having used that very defence.

Sir George Young: Any donations that Ministers or any Members of the House have received from a company such as Pargav have to be put in the Register of Members’ Financial Interests.

Mr Nigel Dodds (Belfast North) (DUP): I welcome the fact that the Government are adopting the procedure of coming forward today and making a statement, which is a departure from previous practice and is to be welcomed. One of the recommendations of the report is that greater responsibility should be given to permanent secretaries to ensure that departmental procedures are followed, yet in this case the permanent secretary at the MOD has already accepted that there should have been much tighter procedures within the Department. What confidence can the public have, given the obvious failings within the Department at that senior level?

Sir George Young: The recommendations apply not just to the permanent secretary but, for example, to the private office as well. I am grateful to the right hon. Gentleman for his welcome for this new procedure and I hope that it is one that I do not have to follow too often.

Mr Andy Slaughter (Hammersmith) (Lab): How is what the Leader of the House has said about conflicts of interest or perceived conflicts of interest and the ministerial code be consistent with the approach the Government have taken in the case of the hon. Member for Huntingdon (Mr Djanogly), who has been relieved of those areas of his portfolio where such a conflict might occur?

Sir George Young: That matter has been dealt with by the Cabinet Secretary.

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Fiona Mactaggart (Slough) (Lab): The Leader of the House said in his statement that Mr Werritty was not a lobbyist. How then will the register and the reforms that he proposes affect the behaviour of someone like Mr Werritty?

Sir George Young: I did not say that I did not think that he was a lobbyist but that the Cabinet Secretary did not think that he was a lobbyist. When we publish the consultation paper next month, we will be open to consultation on what a lobbyist is. In the view of many people, the definition should include Mr Werritty.

Kevin Brennan (Cardiff West) (Lab): Leaving political differences aside, it is a genuine shame that one of the few members of the Government from an ordinary background has been forced to resign. Will the Leader of the House tell us how many donations were solicited by the former Defence Secretary, how much those donations were valued at and why he solicited them?

Sir George Young: I am grateful for what the hon. Gentleman said about my right hon. Friend the Member for North Somerset (Dr Fox), but he was not forced to resign. He chose to resign last Friday and set out the reasons for that in his letter.

Paul Flynn (Newport West) (Lab): Is it not the prime duty of the Leader of the House to try to restore public faith and confidence in this institution? We handled the expenses scandal in an atrocious way that damaged us greatly. Would it not be a terrible mistake if we ignored the real abuses of the revolving door and of lobbying and went ahead and indulged in a process of blaming each other? If we are going to be successful in convincing the public, we must follow the Public Administration Committee. Otherwise, the public will look at this debate today and say, “Same old MPs, same old sleaze.”

Sir George Young: I believe that the hon. Gentleman’s question will be the last. On that consensual note, I hope we can draw these exchanges to a close.

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Personal Statement

1.49 pm

Dr Liam Fox (North Somerset) (Con): Two weeks ago, I visited Misrata in Libya, and I met a man who showed me photographs of his dead children. A few days later, I resigned from the Cabinet. One was an unbearable tragedy, the other was a deep personal disappointment. I begin with that necessary sense of proportion.

As I said in the House last week,

“I accept that it was a mistake to allow distinctions to be blurred between my professional responsibilities and my personal loyalty to a friend.”—[Official Report, 10 October 2011; Vol. 533, c. 23.]

I accepted then that it was a mistake to attend a meeting with a potential supplier without an official present and, with hindsight, I should have been more willing to listen to the concerns of those around me. I have attempted to be clear and transparent on all the issues raised.

I would like to say again that I am very sorry to my colleagues in the House and to all those who feel let down by the decisions I have made. I have always believed in personal responsibility, and I accept the Cabinet Secretary’s conclusions. I am pleased at the explicit acknowledgment that I neither sought, expected nor received any financial gain. That was being widely and wrongly implied. I also welcome the clarification of the fact that no national security issues were breached, that no classified documents were made available, and that no classified matters were briefed. Those accusations, too, were widely made and are deeply hurtful.

The ministerial code has been found to be breached, and for this I am sorry. I accept that it is not only the substance but perception that matters, and that is why I chose to resign. I accept the consequences for me without bitterness or rancour. I do not blame anyone else, and I believe that you do not turn your back on your friends or family in times of trouble. However, it is unacceptable that family and friends who have nothing to do with the central issues should be hounded and intimidated by elements of the media, including in this case elderly relatives and children. It is difficult to operate in the modern environment, as we know, where every bit of information, however irrelevant or immaterial, is sensationalised, and where opinions or even accusations

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are treated as fact. It was particularly concerning that Harvey Boulter, who was present at the Dubai meeting and subsequently the defendant in a blackmail case, was treated so unquestioningly.

Last week’s media frenzy was not unprecedented, and it happens where a necessary free press and politics collide, but I believe that there was, from some quarters, a personal vindictiveness—even hatred—that should worry all of us. But just as these events can bring out the worst in human nature, they also bring out the best. I have been touched, and frankly overwhelmed, by huge numbers of letters, e-mails and calls, from friends and strangers alike, in particular from my constituents in North Somerset. That has meant more to me than anyone can know.

I would also like to thank my parliamentary colleagues, including those in the Cabinet, for their strong and generous support, which shows politicians at their best—although I apologise that it may take me some time to get round to thanking all of you in person.

I am also indebted to my loyal staff for their support, in particular to my special advisers, who find themselves out of work as a result of my decision. I will miss the Ministry of Defence and the fantastic people who work there, military and civilian. It has been a life-changing experience and a great honour to work with some of the bravest and best people in our country. I am proud of what we have achieved there in 17 months and I will help in any way my successor, who I know will do an absolutely excellent job.

I would like to thank my family and friends for their love and support. It is not easy to watch someone you care about being attacked in a very aggressive and prolonged way. We choose this life; they do not. Of course, I would like above all to thank my wife, Jesme, who has dealt with this whole business with her usual grace, dignity and unstinting support.

Finally, it is not always easy to be in public life, but it is an honour, so I would like to thank all the party leaders, including the Prime Minister, who have enabled me to serve on the Front Bench for 17 consecutive years. I will give this Government my full support as they rescue our economy from the mess we inherited.

Most of all, I would like to thank my constituents in North Somerset for giving me the honour to represent them in the House of Commons and the opportunity to serve.

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Point of Order

1.55 pm

Thomas Docherty (Dunfermline and West Fife) (Lab): On a point of order, Mr Speaker.

Mr Speaker: I will take this point of order if it is not about any of the matters about which we have just heard.

Thomas Docherty: This morning’s Scottish newspapers have gained information from Alex Salmond and the Scottish National party Government about a commercially sensitive deal for a £1billion project that will potentially take place in my constituency. It is clearly unacceptable to the House for an SNP Government to breach such commercial discussions. Can you advise what opportunities would be available to the House to discuss this important issue in the coming days?

Mr Speaker: I think I can. I can advise the hon. Gentleman, a doughty and indefatigable campaigner on behalf of his constituents, to use every ounce—and there are many—of his ingenuity, through the Order Paper and in other ways, further and at greater length to draw attention to his dissatisfaction. I feel sure that that is what he will do.

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Fee Charging Debt Management Companies (Promotion of Free Debt Management Advice)

Motion for leave to bring in a Bill (Standing Order No. 23)

1.55 pm

Yvonne Fovargue (Makerfield) (Lab): I beg to move,

That leave be given to bring in a Bill to require fee charging debt management companies to inform potential clients of the availability of free advice on debt management; and for connected purposes.

I have brought forward this Bill to level the playing field between the fee-charging debt management companies, which can spend a considerable amount of money on advertising, and the free agencies, which put all their money into providing a service, and which consequently might not be as well known. In fact, a Google search for “debt advice”, or even for “citizens advice” brings up two debt managements companies at the top of the list, which promise to

“wipe off 75% of your debts”.

Individuals who are looking for a solution to their debts are essentially making a distress purchase. They have realised that their debts are mounting and made that difficult decision to seek help to deal with them. However, searching and deciding on a debt management solution is not like looking for other services. Many people have struggled alone for a considerable time and feel ashamed; they might not have told even their family and friends. It is not like going to a neighbour and asking them to recommend a plumber, and I have never yet heard of anyone asking their mates in the pub whether they have been in debt and who helped them to get out of it.

Instead people turn to the internet or advertisements, or even to a company that has cold-called them. If they are lucky, they go to a citizens advice bureau, but very few have heard of Payplan, National Debtline or the Consumer Credit Counselling Service, which could all help with free solutions tailored to the individual.

What is the problem with fee-charging debt management agencies, beyond the obvious contradiction of charging individuals to get out of their debts? It is estimated that 375,000 people in the UK are on commercially provided debt management plans, costing them £250 million in debt management fees each year. The CCCS estimates that for a debt of £30,000, a client of a debt management company pays £6,000 in fees to that company, and that they extend the life of their debt for 18 months.

Unfortunately, too many of those companies take advantage of people when they are at their most vulnerable. Many people end up in a worse financial situation than when they first sought help. There is significant evidence of companies providing misleading information about their services. They claim to be able to write off debts and charges, and to give free advice, although fees are involved. There is also evidence of some payday lenders acting as an introducer to a debt management company. If that is not a case of, “We’ll get you into debt and then tell you about somebody who you can pay to get out of it,” I do not know what is.

It has been reported that rather than promoting free debt advice, some fee-charging companies have told callers that the CAB is not a specialist money adviser,

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and not to deal with it on a one-to-one basis. One individual approached a bureau for help after a company refused to cancel a plan that he signed up for within the 14-day cooling-off period. After the CAB intervened the agreement was cancelled, but the company told the client that the bureau would not contact the creditors, so she risked court action by doing what she was doing. High management fees, particularly up-front fees, can also be a particular problem. In one case, an individual was cold-called by a debt management company and paid an up-front fee of £1,000 before receiving any advice at all. I had a constituent who paid £300 to a fee-charging debt management agency, only to find out that they then had no disposable income, after which the agency referred them to my local CAB.

Up-front fees are not the only problem, however. Ongoing fees are also an issue, as companies need to recoup their costs early in the life of the agreement. When I worked for an advice agency, I saw a client who had been paying £80 a month to a debt management company for six months, not one penny of which had gone to her creditors. She said that she did not know where to go, so she looked on the internet and contacted the company. She was considerably upset when she realised that her debt had actually increased, despite those payments, because the interest had not been frozen. Also, debt management companies cannot and do not offer the full range of debt remedies available to an individual, and on occasion have even failed to inform clients of the need to pay their priority creditors first. Another CAB client reported that she was encouraged to make offers via a debt management company to her non-priority creditors, for which they took a fee. As a result she struggled with her mortgage payments, fell into arrears and is now worried about losing her home.

The number of complaints to the Financial Ombudsman Service is rising. There have been 457 new complaints in 2010-11, a staggering 54% of which were upheld in favour of the consumer. The complaints generally fall into two categories. The first is poor administration:

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money paid to a company is kept in that company’s accounts for a considerable time rather than being paid to the creditors. The second is when, as I have described, a high proportion of the money paid is retained by the company to cover its costs rather than being paid to creditors. This demonstrates that it is not only the individuals who suffer detriment but their creditors, who could be paid much more money more quickly.

It is surely obvious, therefore, that making people aware of free quality agencies, which make sure that all the money paid goes to the creditors, will benefit both parties. An argument often used by the fee-charging sector is that there is insufficient capacity in the free sector. I agree that this needs to be carefully monitored and that a sustainable cross-governmental strategy for the provision of free debt advice is essential. However, a recent partnership between the CCCS and Citizens Advice has demonstrated that the agencies are working together to direct people to the most appropriate form of advice and to ensure that the most expensive form of delivery, the face-to-face advice, is kept for the people who need it most—the most vulnerable—and that people do not have to turn to the fee-charging debt management sector through lack of available free advice.

No one should suffer through ignorance of the services available to help them, and I believe that the Bill will provide for individuals to be informed of the full range of agencies able to support them, instead of allowing them to fall into the hands of some of the fee-charging companies that propel them into further debt and despair.

Question put and agreed to.


That Yvonne Fovargue, Nic Dakin, Phil Wilson, Sheila Gilmore, Alex Cunningham, Teresa Pearce, Justin Tomlinson, Damian Hinds, Tracey Crouch, Tessa Munt, Jonathan Edwards and Dr Julian Huppert present the Bill.

Yvonne Fovargue accordingly presented the Bill

Bill read the First time; to be read a Second time on Friday 20 January 2012, and to be printed (Bill 237).

19 Oct 2011 : Column 929

Opposition Day

[Unallotted day]

Energy Prices

[Relevant documents: The Fourth Report from the Energy and Climate Change Committee, Electricity Market Reform, HC 742 and the Government response, HC 1448, and the Sixth Report from the Committee, Ofgem’s Retail Market Review, HC 1046, and the Government response, HC 1544.]

2.4 pm

Caroline Flint (Don Valley) (Lab): I beg to move,

That this House believes that the energy market does not serve the public interest and is in need of urgent reform; notes with concern research by OFGEM showing that average household energy bills have risen, while energy companies’ profit margins have soared; recognises that, with a cold winter forecast and Government support cut, millions of families will struggle to heat their homes; believes that energy tariffs are confusing and unfair, meaning that 80 per cent. of people currently pay more for their energy than they need to, and that consumers who try to switch are often given inaccurate information; further believes that to tackle climate change, build a new low carbon economy and make the UK a world leader in green energy, which will bring new industry and jobs to the UK, people need to know that the energy market is fair; and calls on the Government to investigate mis-selling and ensure consumers are compensated, introduce a simple format to be applied across all tariffs, so that people can compare the full range of energy deals at a glance, increase transparency by requiring energy companies to publish their trading data, reform the energy market to break the dominance of the Big Six by requiring them to sell power into a pool, allowing new businesses to enter the market, increasing competition and driving down energy bills for families and businesses, and demand that energy companies use their profits to help reduce energy bills this winter.

I am pleased to move this Opposition day motion, and it is good to see the Secretary of State in his place this afternoon; we were all concerned for his well-being after his no-show on “Newsnight” on Monday. It was the day of that amazing energy summit, yet he was nowhere to be seen. That tells us just how well the summit went. As today’s report on fuel poverty highlights, the stakes could not have been higher: according to the National Grid Company’s forecast last week, this winter could be as bitter as last year, which saw the coldest December on record. Moreover, energy bills have risen by more than 20% this year alone, driving inflation to the second highest level in Europe, and have risen by more than 50% in the past four years, which means that the average family is now paying £1,345 a year just to keep the lights on and the house warm.

That matters. People do not have a choice about whether to consume energy. At the same time as more than one quarter of families are struggling to afford their energy bills, more price rises are on the horizon and more families are worried about how they will make ends meet, yet energy companies are enjoying soaring profits. On Monday the Secretary of State got the big six energy firms, which between them control 99% of the market, into the same room. With them were consumer groups such as Which? and Consumer Focus. It was the ideal opportunity to get a grip on spiralling energy bills, but what was the big idea? What was the bold plan? What was the new policy?

We were given two words that will strike terror into the hearts of the big six energy firms, two words that will give reassurance to millions of families worried about how they are going to heat their homes this

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winter: “Go compare”. I honestly thought that the Prime Minister was going to come dressed as the opera singer Gio Compario and force the summit’s reluctant audience to endure a chorus. He might as well have done, for all the good that came out of it. Meanwhile, the Secretary of State could only look on—as the Prime Minister spoke and the public relations shots were taken—reduced to the role of the Prime Minister’s meerkat.

Mr Charles Walker (Broxbourne) (Con): Does the hon. Lady agree that we should have been increasing generating capacity and building more nuclear power stations over the past 15 years?

Caroline Flint: That is why, as we left office, we set in train the opportunity to put in place a more balanced energy generation selection for everyone, and that is why many of those policies are now being carried forward by the present Government.

But let us talk about this winter, this week, as the cold snap hits, and about the prices that families up and down the country are facing. Let us talk about the outcome of that energy stunt. There will be no overhaul of the energy market to break the stranglehold of the big six, there will be no radical simplification of the tariffs available, and there will not even be a pause for thought about whether cutting winter fuel payments for pensioners is the right thing to do, even though the Prime Minister accused Labour of lying when we warned, before the general election, that the Tories would cut them. The only message was: go compare. However, people can only go and compare if they have easy, accurate, transparent information on pricing, which we do not have. The number of tariffs on offer has risen from 180 three years ago to more than 400 today: there were more than 70 new tariffs just this year. That does not help consumer choice; it hinders it.

Robert Flello (Stoke-on-Trent South) (Lab): My constituents, when they look at this vast array of different tariffs, step back and think, “Well, what’s the point? These six firms are effectively in cahoots anyway. They are almost operating a cartel.” They think, “Why bother wading through all this treacle and looking at the different tariffs, because we know that we’ll switch to one company and then, two minutes later, it will up its prices too.”

Caroline Flint: My hon. Friend makes the point that many of our constituents are making about mis-selling, and the barrage of information that does not allow them to make a clear choice. If there are too many tariffs that are complicated to understand and difficult to compare, people cannot make informed decisions about which deal would be best for them.

Sajid Javid (Bromsgrove) (Con): The right hon. Lady will be aware that energy prices soared in Britain between 1997 and 2010. Heating oil prices increased in real terms by 130%, gas prices by 71% and coal prices by 61%. Does she think that that inspires confidence in her approach?

Caroline Flint: That is one of the reasons why in 2007 we started discussions across Europe, as part of the new third energy package, to ensure that national regulators had more powers and to introduce more competition

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and transparency. That is what my right hon. Friend the Member for Doncaster North (Edward Miliband) has been calling for ever since he was Energy Secretary, including now, as leader of the Labour party. It is interesting that we are only now beginning to see signs that the Government are getting behind the Miliband deal.




It is absolutely true.

The Secretary of State likes to lecture us about the need to check and switch, but what does his own Energy Minister say? Earlier this year he poured his heart out to the Select Committee on Energy and Climate Change about his struggle to find a cheaper deal. He said:

“I went on line to compare my tariffs and I was so confused by the options that I decided to stick where I was”.

That is what is happening to our constituents up and down the country. If the Minister himself cannot work out how to get a better deal, what hope is there for the rest of us? No wonder 80% of people are paying more for their energy than they need to.

Caroline Dinenage (Gosport) (Con): I recognise the passion with which the right hon. Lady speaks. I share her passion, because many people in my constituency, particularly pensioners, have been struck with fuel poverty. However, I am beginning to ask myself whether she has been asleep for the last 13 years as prices have gone up. This has not suddenly happened overnight; the problem has got increasingly worse over the last 13 years. What does she say about that?

Caroline Flint: I am afraid that the problem has got even worse in the last year. Prices have been going up, even though wholesale prices have been going down. In its recent reports Ofgem has quite rightly complained about the way the energy big six blame wholesale prices when they put their prices up, but when wholesale prices go down they are not as quick to send them down the other way. It is just not good enough.

Sandra Osborne (Ayr, Carrick and Cumnock) (Lab): Does my right hon. Friend agree that shopping around, as people are being told to do, is a totally hopeless choice when they are suffering so badly, in many different ways, from rising prices, and not just fuel prices? Given the profits that the energy companies are making, does she think that they should make a contribution by cutting prices?

Caroline Flint: Absolutely, and that is in our motion today. Every Member of this House has a chance to vote to urge the energy companies to share some of their profits with the people who are their customers and to get prices down. As my hon. Friends have said, the problem is that even when people try to find a better package they do not get the right information.

Mr Mike Weir (Angus) (SNP): Are things not, in fact, even worse than that? People can reduce the amount that they pay by switching only if they pay by direct debit, which acts against those on the lowest incomes who do not have bank accounts, and those of our constituents who do not wish to set up direct debits as they want the ability to decide which bills they pay when, in these difficult times.

Caroline Flint: Absolutely. There is no point in the companies having a system that does not recognise the situation of ordinary families. The National Pensioners Convention talks about the fact that fewer than six in 10

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pensioners have access to a computer to go online. It is not fair or right. The onus should be on the companies, not the public. However, all the Secretary of State could do this week was blame the public: “It’s your fault you’re not getting out there and getting a better deal. It’s your fault you’re not saving yourselves £200 a time.” He has got a lot to answer for, because he has just sat back and let people suffer.

Andrew George (St Ives) (LD): The right hon. Lady bemoans the unfairness in the direct debit discounts and the way in which those suffering from fuel poverty are treated by the system—there is also an issue with rising block tariffs—but all those things happened in the 13 years of the Labour Government. She is absolutely right to raise those important issues, but what did her Government do in that time to address them?

Caroline Flint: For a start, we had the most ambitious programme to help people in fuel poverty deal with their bills—the Government are cutting those measures—but we also started discussions across Europe about having Europe-wide legislation to tackle some of those issues by not only giving greater powers to regulators but ensuring more openness and transparency. I will talk about this more later, but I am sad to say that we are seven months overdue in implementing that legislation and putting into statute powers that we can use to control parts of the market. Perhaps the Secretary of State will say something more about why the package that my right hon. Friend the Leader of the Opposition was negotiating when he was Climate Change Secretary has not been implemented.

Research published by the consumer group Which? showed that when people contacted the big six energy firms to ask how they could save money—that is, when they made the effort that the Secretary of State lectures us about—a third of them were given misleading advice. Either those customers were deliberately misled or the tariffs were so complicated that not even the staff selling them understood them. Can we imagine any other product or service where we would accept four out of five customers being overcharged—not just once, but time and time again—and nothing being done about it? When four out of five families are paying over the odds for their electricity and gas it shows how out of touch this Government are to lecture people about shopping around.

People do not want a Government who blame them for the fact that their energy bills have gone up. Families and businesses that do the right thing, work hard and play by the rules cannot understand why this Government are not only allowing electricity and gas companies to increase bills by so much, but seem to be apologising on their behalf. On Monday the Energy Secretary told the “Today” programme:

“Energy companies are not the Salvation Army”,

and said that he expected them to

“earn respectable returns for their shareholders”.

We know that the energy companies are not the Salvation Army, but it should not be Government policy to drive people into the arms of the Salvation Army either.

Stephen Barclay (North East Cambridgeshire) (Con): Can the right hon. Lady explain why, in 2000, the Labour Government set a 10-year target of securing

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10% of electricity from renewables, with a starting point of 2.7%, yet failed to achieve it, adding only 6% in 10 years? In 2009 the current Leader of the Opposition set a legally binding target of 31%—in other words, signing us up to deliver 21% extra when we had already failed to achieve the 10% target in the preceding 10 years. Could she please explain that?

Caroline Flint: I am happy to support the Labour Government’s ambitious plans to be at the forefront of supporting renewable energy—and also, I should add, cracking the whip to make the energy companies play their part. Part of the problem is that the energy companies seemed to be on a mission to make us use more energy and pay more, rather than helping us to reduce our energy consumption and therefore pay less. We have nothing to apologise for on that front. What we are talking about today is what is happening this week, as the frost hits, and this winter, when people will face not only high energy bills but higher food prices, and wage freezes in the public and private sectors, in a country where unemployment is going up and people are feeling the squeeze on all fronts.

The question is: what can this Government do about that now? The answer, from Monday’s energy summit, seems to be: precious little. We do not think that this Government are doing enough. On Monday the Secretary of State could not bring himself to question whether it is right, at a time when millions of families and businesses are struggling with energy bills, that energy companies should be enjoying soaring profit margins, which are up more than eightfold since June. We do not think that it is, which is why we welcome The Sun’s “Keep it Down” campaign, and why we said that the Government should have used Monday’s summit to tell the energy giants to give up some of their profits and cut bills this winter. Was it any surprise that the BBC correspondent reported that the energy companies were “delighted” with the outcome of the summit? Well, they would be, because they were not asked to do anything.

Jim Shannon (Strangford) (DUP): Does the right hon. Lady agree that the energy companies need to be regulated, and that, along with regulation, we need initiatives to reduce the supply of energy that they get, over a 12-month or even a 24-month period? Does she also agree that such arrangements would need to be regulated and guaranteed under legislation? Regulation of the companies and a reduction in the supplies that they give out, guaranteed by legislation, will be the way forward.

Caroline Flint: We are clearly on record as saying that we need to reform this distorted market. We need openness and transparency, and we need simpler tariffs. It is not enough just to tell people to navigate themselves around the increasing number of available tariffs that are no good. This is also about breaking up the big six and opening up the energy market to new suppliers. We are clear about that, and today we are forcing the Government to tell the House whether they, too, are clear about it.

John Robertson (Glasgow North West) (Lab): Has my right hon. Friend had a chance to look at John Hills’s report on fuel poverty? He talks about the thousands

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of people who will die from hypothermia this winter. Does not that make any arguments about who is at fault completely superfluous? The fact is that we have to prevent those people from dying. What are the Government going to do about this? Are they going to put profit before people’s lives?

Caroline Flint: I was pleased to be able to have a meeting with John Hills this morning to discuss his report. I would not want to make a direct comparison in this regard, but it is telling that more people die of cold in the winter than die on our roads. This is about recognising that, while certain actions will take time, we need to determine what can be done here and now. The sad thing is that Ministers are lecturing families and firms about insulating and saving, even though they have cut Warm Front by 70% and will not give anyone any information about their green deal for homes, which will not be ready for another year anyway. Labour invested more than £300 million in Warm Front during our last year in office, helping families to keep warm and save energy. We helped home owners on modest incomes to modernise their heating systems, but today that scheme has a budget of just £110 million, and it is due to end in April 2013. The Government could take action right now: they could also stand up to the energy companies and tell them to help people to help themselves. In doing that, they could perhaps save some lives.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): I agree with my right hon. Friend that we should be challenging the big six over their excessive profits. She is also right to point out, in relation to the Government’s responsibilities, what Warm Front did to reduce fuel poverty. What does she think about the Government’s cutting of winter fuel payments and replacing social tariffs with a poorly designed system? We must press the Government about those changes.

Caroline Flint: My hon. Friend brings to the House the expertise of a public health expert, and she makes an excellent point. How people live, and the homes and communities that they live in, are important to their physical well-being. For example, 80-year-old widows will lose £100 this winter that would have helped to heat their homes. And by the way, the Prime Minister had the brass neck to tell the public to check out free insulation, but he forgot to say that the insulation schemes run by the energy companies exist only because Labour legislated to require them to spend £300 million every year on reducing fuel poverty.

Robert Flello: My right hon. Friend will recall, as will most Members when the Government take us back to the 1980s, that it was Edwina Currie who said that pensioners had to stay in one room with a flask beside them, knitting themselves scarves and hats to keep warm. We are going back to that same territory, are we not?

Caroline Flint: I am afraid that Edwina Currie was in the news again only last week, when she said that she was not aware of anyone who could not afford to eat. People up and down the country are, however, facing the choice between keeping warm and having a hot meal. The sad thing is that many older people often make such sacrifices and keep quiet about them; they

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suffer on their own. In the voluntary sector, we are also seeing cuts to the services that support those people and help them to get access to their rights and to the deals that they deserve. This is a sorry tale of a sorry Government.

Guy Opperman (Hexham) (Con): May I draw the attention of my right hon. Friend to the report on fuel poverty by the Office of Fair Trading, which was published this week? She asks what is being done. The report described the stopping of practices by BoilerJuice—something that was set up on her watch—which allowed only one company to be in a position to market its products, namely DCC. Will she “go compare” that?

Caroline Flint: Whatever we do in public policy, the important thing is always to see whether it is hitting the mark and working as best it can. Does that mean that policies always stay the same? No, it does not.

I thank the hon. Gentleman for calling me his right hon. Friend, but I must challenge him and the Secretary of State over Labour’s record on supporting families coping with their energy needs. I challenge the Secretary of State to deny that the Decent Homes programme, which involved the modernisation of 1.5 million homes, reduced energy consumption. I defy him to say that the code for sustainable homes did not improve the energy efficiency of new properties. I defy him to say that Warm Front did not reduce energy bills for more than 2 million households. I also defy him to say that the car scrappage scheme did not remove hundreds of thousands of old cars from Britain’s roads and replace them with more fuel-efficient vehicles with lower emissions. I challenge him to own up to the House today to the fact that the regulations that his Government are introducing, seven months after they were required, arise from the third energy package agreed by my right hon. Friend the Member for Doncaster North when he was Secretary of State for Energy and Climate Change. Yes, it was Labour that agreed the legal agreement across the European Union to make the gas and electricity markets more competitive, to give new powers to the regulator, to reveal the financial records of the energy giants and to put in place a more competitive market that new suppliers could enter. The role of this Government, 18 months into office, is to delay the process of implementation.

Perhaps the Secretary of State is not just the Prime Minister’s meerkat; perhaps he is also the Chancellor’s poodle. Following the Osborne doctrine, which states, “We are going to cut our carbon emissions no slower, but no faster, than other countries in Europe”, perhaps he now believes that, as the Chancellor said,

“a decade of environmental laws and regulations are piling costs on the energy bills of households and companies.”

Perhaps that is why, this week, the Secretary of State failed to stand up to companies over pricing, why he failed to express the anger that the public feel towards the energy giants, and why he meekly agreed to let the energy giants pledge not to raise their prices over the winter only after they had already increased them.

People expect, and deserve, a Government with the courage to stand up to powerful vested interests. This Government cannot even stand up to their own Back Benchers. A survey last year showed that, in spite of the overwhelming scientific consensus, one third of Tory MPs are climate change deniers who doubt the existence of climate change and its link to human activity. As

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ever, we are particularly grateful to the hon. Member for Mid Bedfordshire (Nadine Dorries) for the expertise that she brings to all matters scientific. On Monday, she solved an issue that has evaded scientists for generations when she told Radio 5:

“You can’t put solar panels on children’s shoes.”

I am glad that that thorny issue has been resolved once and for all, but this is all part of the background to the comments of the Chancellor at the Tory party conference, when he openly attacked low-carbon businesses to get cheap applause from Tory delegates. The truth is that this Government are not only out of touch but wedded to an out-of-date orthodoxy which, for too long, has allowed the City and companies such as the privatised electricity suppliers to do what they want at the expense of everyone else.

Sammy Wilson (East Antrim) (DUP): I note what the right hon. Lady has said about her support for the Climate Change Act 2008, but will she spell out for us what the cost of the renewables obligation has been for electricity consumers in the United Kingdom this year?

Caroline Flint: What will be the cost if we rely on fossil fuels for ever more? What difficulties would that create, in terms not only of fuel costs but of security of supply? I refer the hon. Gentleman to a report that I believe came from both Ofgem and the Department of Energy and Climate Change last year, which outlined that something less than 5% of the price of bills was connected to investment in renewables. Of course we have to look for a balance, but I am focusing on something that we should all be concerned about. Even the Government have admitted that people are paying too high a price for their bills because these tariffs are sold in a misleading way so that people do not get a decent deal. On top of that, we have only the six big energy giants in the market, which needs to be broken up and radically reformed. That is something we should focus our attention on, along with help to people and businesses to make their homes and businesses more energy-efficient so they can pull down the costs of energy over time. There is no going back, however, to an old system of energy supply; that will not help anyone.

John Robertson: What does my right hon. Friend say to people in the poorer parts of my constituency where energy efficiency will not work? People can do nothing with the housing they have got, but they have to live somewhere. The thing that makes the biggest impression on them is the price. If they are going to get screwed by the price from the energy companies, they are going to have to work out how they are to live. What do we do with people like that? We can talk all we like about efficiency, but it does nothing for these poor people.

Caroline Flint: We stand up for them. We stand up for them when they are not getting the best deal they can for their energy. We also stand up for them by ensuring that low-income homes are supported through Government schemes, whether that is Warm Front or the winter fuel allowance for older people, but those are being cut by the Government. That is what we do and what we look at. In the long term, we look at how we live our lives and where we live and, with Government leadership and support, we help business to do the right thing to help people not to be behind the curve on energy efficiency

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and lowering bills. We also look at what happens now, which is why our motion demands that energy companies use some of their profits to help people, particularly the most vulnerable in our communities.

The Government do not understand the reality for families who struggle to pay the bills at the end of the month or the reality for vulnerable people who must make choices about whether to heat their home or have a hot meal. The same applies to families who believe in greening their homes, do their recycling, have low-energy light bulbs and have insulated their homes, yet still find that under the complex, distorted tariffs they pay more for every unit of energy they use—not to mention the businesses trying to keep their head above water because of an austerity programme that is not working for Britain.

Robert Flello: On that specific point, families face a double whammy, as not only have their own gas and electricity bills gone up, but the businesses that supply them with food and other services have seen their bills go up.

Caroline Flint: Yes, and all this takes place in an environment in which unemployment is going up and growth is going down. This toxic cocktail of Government policies is not only not helping us get to a better place for our economy, but is actually making it far worse.

Anne Marie Morris (Newton Abbot) (Con): Does the right hon. Lady share my particular concern for the south-west, given that if we add energy bills at an average of £1,300 to the water bills at £517, people are looking at spending 8% of their average income on utility bills?

Caroline Flint: The hon. Lady speaks up for the south-west and I know that she has raised questions a number of times about water in the south-west. Again, however, I would have to say that she should speak to her leader and to the Secretary of State about what they are doing to challenge these utility companies over how they supply, and she should recognise the difficulties faced across our country. She also needs to recognise particular difficulties within regions as well as within the country.

Stephen Barclay: A central theme of the right hon. Lady’s remarks seems to be gas prices and bills for consumers. Will she remind us how much gas bills went up in real terms between 1997 and 2010?

Caroline Flint: I understand that the wholesale price has gone down from its peak in 2008 by two thirds; in fact, wholesale prices have been going down in the last month. That poses the question: why do we hear from the energy companies when they say that prices are going up, but when the prices are going down we do not hear from them so loudly? Ofgem has said it is not good enough that when the energy companies claim that wholesale prices are going up, the price to consumers goes up like a rocket, but when they come down, the price comes down like feathers. The truth is that it is a complex market and it is difficult. We are not an island that can control everything, but we should control the way in which the energy companies are expected to

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satisfy us and the public about how they run their tariffs, and they should open their books to show transparency so we can see at what price they buy and at what price they sell, to ensure that we get a better deal.

Angela Smith (Penistone and Stocksbridge) (Lab): Unemployment is at the highest level for 20 years, we have an austerity programme that makes the eyes water, inflation at over 5% and on top of that we face the biggest squeeze on living standards in a generation. Is it not imperative that the Government do something about rising energy prices, which do more than anything else to harm families’ budgets, making it hard for them to keep up a decent standard of living?

Caroline Flint: I agree with my hon. Friend. Given all the spin before the energy summit on Monday, it was disappointing that all that came out of it was that letters would be written to 8 million households telling them to check, switch, insulate and save. I am sorry, but that is not good enough. It is hard to check, switch, insulate and save when it is so incredibly difficult to navigate a way through the tariff system and people are never quite sure, even if they get what looks like a good deal, whether it is going to be a good deal down the road. That is why some of the tariffs that are fixed for 12 months have been so disappointing; many people have realised that they are not as good as they were claimed to be.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Before I came to this place, I worked for Citizens Advice, so I know that energy poverty has led to one of the greatest increases in inquiries. At the time, I argued for the introduction of a mandatory social tariff on behalf of those in the fuel poverty group, removing them from the market that was clearly not working. Would the Labour Front-Bench team agree with such a radical proposal?

Caroline Flint: We had something like that, but I am afraid that the present Government have taken it away. If we want to get to the root of the problem, we have to think about radically reforming how the energy market works. We have to create a dynamic and more open energy market that deals with climate change and operates in the interests of the consumer, not the vested interests of the few.

At the Labour party conference, my right hon. Friend the Member for Doncaster North called for reform to the energy market to end the dominance of the big six and get a fairer deal for the people of Britain. While the Government have been failing to act to prevent sky-high energy price rises, Labour has been leading the debate and is coming up with radical ideas to reform our energy market and deliver significant reductions in gas and electricity prices for millions of consumers. Our plans would provide immediate help to millions of families now and reform the energy industry to provide a new bargain in the future.

Laura Sandys (South Thanet) (Con): The right hon. Lady is making a critique of the current regulatory regime, which was the Labour Government’s regime. What we are doing is reforming the electricity market and there is also Ofgem’s retail market review. Those are the steps taken forward, and we will ensure that they deliver value for the consumer. The previous Government

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published 32 Green Papers and consultations and passed two pieces of legislation, so there was a lot of inactivity over the past 13 years.

Caroline Flint: I think I have already said that, back in 2007, we embarked on securing Europe-wide support for reform of the energy market. I am afraid to say that the negotiations on which the leader of the Labour party led have yet to be implemented. They are seven months overdue; they could have been implemented in this country seven months ago, but it has not happened yet. We are calling for further radical restructuring: we have argued for the energy giants to put all their power into a pool, but we have not heard that echoed by the Government. We have made many demands for transparent data to go to the regulator, but again we have not heard that echoed by the Government.

Laura Sandys rose—

Caroline Flint: I will continue to expand on my theme a little, if I may, but I will be happy for the hon. Lady to intervene again if I have time.

If we want to get to the root of the problem, we must talk about reform, and our plans would provide immediate help for millions of families. First, we must deal with the sheer number and complexity of energy tariffs, which are extremely confusing and unfair. They hit loyal customers and penalise those who use less energy, and they really must be reformed. We propose a simple new tariff structure, which will be clearer and fairer and which will help all energy customers to get a better deal. It would work like a phone bill, with a daily standing charge and a cost per unit for the energy used.

Simplifying the pricing of energy would make it much easier for people to compare deals, work out which is the cheapest for them, and ditch the ones that are ripping them off. We need to get rid of expensive primary units and unregulated standing charges, so that people are no longer penalised for being low energy users, which is quite ridiculous. Instead of his “Check, switch, insulate” mantra, could the Secretary of State not try “Simple, honest, straightforward”? That might work better for customers.

What about redress? I understand that only two days ago, on breakfast TV, when asked about our proposal for a thorough investigation of past mis-selling and compensation for customers who have been ripped off, the Secretary of State suggested that that was not worth doing because it would delay other reforms. Labour Members will accept new protection measures as they are introduced, and we agreed that that should happen throughout Europe when we were in office. However—let me challenge the Secretary of State by repeating this—we are saying today that a full investigation into past mis-selling must be initiated, and that those who have been ripped off must be fully compensated.

The Secretary of State for Energy and Climate Change (Chris Huhne): In fact, what I said was not worth doing was referring the matter to the Competition Commission, because of the delays that it would involve.

Caroline Flint: I am not sure whether that means that the Secretary of State now supports our demand for a full investigation and redress for consumers who have been ripped off.

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Chris Huhne: I announced some weeks ago that we were considering redress for consumers. Moreover, we have said that it should not be just a question of a rap across the knuckles or indeed a fine, but that there should be a possibility of redress for consumers as well.

Caroline Flint: Obviously we will explore that in a little more detail, but I think it is clear that those who have mis-sold a package must pay back to people what they have lost through that, and must pay them compensation. It is clear that the fines are not working, because every time a consumer organisation conducts another survey, it finds more evidence of mis-selling. I think that this is quite straightforward, and I do not see why we need to go on talking about it. Let us just get on with it.

Albert Owen (Ynys Môn) (Lab): Does my right hon. Friend agree that the Energy and Climate Change Committee, of which I am a member, should be praised for initiating the current inquiries? Already four of the big six have decided to stop doorstep selling, and we need to push that further. The Secretary of State knows that these companies are on the run; now he must put the boot into the big six, and ensure that our customers receive the compensation that they deserve. We need not measly words, but action.

Caroline Flint: My hon. Friend is entirely right, and I pay due respect to all the members of the Select Committee. They have done fantastic work on our behalf, highlighting some of the problems caused by the operation of the energy market and energy companies. It is about time that the Government stood up to the energy giants, because this is not good enough. I do not know how energy chief executives can go on television and brazen it out, talking about what their companies are doing for customers, when 80% of people are not on the best deal for them, and mis-selling appears to have reached the level that is being discussed in the Chamber and beyond. It is a disgrace, and the very least that those companies should do is fess up and pay back.

Ian Mearns (Gateshead) (Lab): It is not just the mis-selling itself, but the fact that it has taken place within the confines of what is clearly a rigged market, that is such an utter disgrace. It is clear that the levels of profit per customer in all the companies in the market are rising very quickly and will fall very slowly, and that is of concern to every Member in the House.

Caroline Flint: My hon. Friend is right. People are not stupid, but sometimes I feel that the leaders in this country treat them as if they were. That certainly seemed to be the case on Monday, after the energy summit. People feel distrust, and they are right to feel distrust because of what has happened to them.

I am sure that we all have stories of our own experience. For instance, the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), tried to work out what was the best tariff for him, and then gave up on it. Yet people are being blamed for sticking to the same supplier because they too have given up, although some of those whom we represent have more stresses to deal with in life than we have. Spending half the day sorting out an energy bill—if they can devote that much time to

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it—is just one item in a long list of things with which they are having to cope, and they are not being helped by the policies of this Government.

Pat Glass (North West Durham) (Lab): It is all very well for the Prime Minister to tell people that they should insulate their homes. It is true that they should do that, but some of the poorest people in the country live in private rented accommodation. They turn up in my surgery all the time. There are some excellent private landlords, but there are also many who are simply not interested in insulating their houses, and do not care how high their bills are.

Caroline Flint: We have been campaigning for something to be done about that from 2016, but I understand that the Government do not intend to do anything until 2018, and that too is a disgrace. We must also look much more closely at what happens to housing benefit in the private rented sector, and ensure that that sector is not left behind. We should consider incentives, but we should also consider introducing a bit of stick where it is necessary.

Geraint Davies (Swansea West) (Lab/Co-op): One in four children in Swansea currently live in absolute poverty, which means that every day a choice must be made between eating and heating. Should the Government not put at the top of their agenda the opportunities at their disposal to target support at those in greatest need, particularly households containing children in poverty?

Caroline Flint: I agree. There are measures that Government can take. However, they can also show leadership and exert moral pressure on the energy companies to be fairer and consider sharing some of their profits with those who are most in need, at the very least.

Huw Irranca-Davies (Ogmore) (Lab): The Secretary of State has focused on the fact that switching suppliers might save people as much as £200. Is that not a bit rich, given that the energy companies’ profit per person is £125? Most people will never get around to switching, and meanwhile the big six are raking it in.

Caroline Flint: If it is true that every customer who followed the Energy Secretary’s advice could save £200, why do the companies not make it easier for customers by simply reducing their prices? The latest report does indeed show that their profit margins are £125 a head, up from £15 a head in June. If that does not set the alarm bells ringing in Government, I do not know what will.

As Members have pointed out—including, to some extent, Government Members—reforming the way in which energy is priced and sold will only ever work if there is genuine competition in the energy market. There is no such competition at present. The market is dominated by just six firms, which supply more than 99% of electricity and gas.

Damian Hinds (East Hampshire) (Con): Will the right hon. Lady give way?

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Caroline Flint: No. I will not take any more interventions, because I want to leave time for other Members on both sides of the House to contribute.

The problem is that when wholesale prices go up, so do people’s bills, but when wholesale prices come down, bills do not. That is because of the lack of transparency in the market. The companies that generate energy sell it to themselves, and then on to customers. If the few big dominant firms were forced to sell the power that they generate to any retailer, companies such as supermarkets and others could come into the market, there would be more competition. and the upward pressure on prices would be eased.

In the long term, however, the only way in which we will deal with rising energy prices is by investing in new renewable sources of energy. The challenge is clear. A quarter of our generation capacity will close in the next 10 years, and we need to attract some £200 billion of investment. If we do not do that, energy bills may rise further still, by hundreds of pounds a year.

As a result of the uncertainty this Government have created, the UK is falling behind with investment in new low-carbon generation. Investment that should be coming to the United Kingdom, supporting jobs, growth and industry in this country, is now going overseas. Last year, when we left office, the UK was ranked third in the world for investment in green growth. Today, because of the choices made by the present Government, we have slipped 10 places to 13th, falling behind countries such as Brazil, India and China. That is why the Chancellor was wrong when he said the UK should not try to get ahead of other countries in developing our green industries; we should do that. We should be ambitious for our country; we should be a world leader on the green economy. That is good for consumers because in the long run it will bring down prices. It is good for our environment because it gets our carbon emissions down. It is good for our energy security because it means we are less affected by events overseas. It is good for our economy too, because it creates jobs and supports growth at a time when we need that more than ever.

I am afraid that we have a Government who are out of touch and unable to stand up to powerful vested interests on energy prices on behalf of the people of this country. They are out of touch when they tell people that they are to blame for rising energy bills. They are out of touch when they cut help for pensioners at a time when prices are rising and a cold winter is on the way. They are also out of touch when they insult people by saying “Check, switch” and “insulate to save.”

The public will check; they will check how their family voted at the last election and they will switch to Labour—as Liberal Democrat voters did in their droves in May. They will try to insulate themselves from the hardships this Government are raining down on them, and in a few years they will save themselves and this country from this terrible coalition.

The public do not need lectures from Government. They want leadership, and today there is a very clear choice before the House: vote to stand up to the energy companies and take action; vote for simpler and fairer tariffs; vote for justice and redress for the victims of mis-selling; vote to open the books and shine a light on how energy is bought and sold; vote to break the stranglehold of the big six and create an open and

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competitive energy market; vote to tell the energy companies to use their profits to cut bills now. I commend the motion to the House.

2.51 pm

The Secretary of State for Energy and Climate Change (Chris Huhne): The right hon. Member for Don Valley (Caroline Flint) brings a wealth of Government experience to her brief, and I congratulate her on her appointment and on securing today’s debate. She has a particularly difficult Opposition Front-Bench role as her boss, the Leader of the Opposition, was the former Secretary of State for Energy and Climate Change. He held that post for almost two years, and presided over the last Government’s energy and climate change policies. It is his legacy that I am having to deal with.

As we did not hear much from the right hon. Lady about that legacy, I would like to remind her of it. First, we inherited a situation whereby we ranked 25th out of 27 European Union member states on renewable energy. No turf was turned for any new nuclear power stations. There was no progress on that throughout the 13 years the Labour Government were in office.

Several hon. Members rose—

Chris Huhne: Carbon capture and storage is a crucial technology if we are to ensure that the coal mines and miners in this country have ongoing employment, but in 2007 the Peterhead project was cancelled, despite the competition, with the consequence that we have now further delayed addressing this issue.

Several hon. Members rose

Chris Huhne: There was not a single comprehensive energy saving package throughout the time of the last Labour Government, whereas in our first year in office, we have proposed in the Energy Bill a comprehensive package to make sure that householders can save energy, so that we end the scandal we inherited from the right hon. Lady and her colleagues of householders in our country spending more on their energy every year than people do in Sweden, where temperatures are 7° lower than here. That highlights the waste we inherited.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. If the right hon. Gentleman does not wish to give way, he cannot be made to do so. I ask Members to be patient with him.

Chris Huhne: I will happily give way in a moment, but having listed a few legacy issues that we are attempting to deal with, I should make one final point. The leader of the Labour party held this portfolio for almost two years, but only now that he no longer has any power to do anything does he keep coming up with interesting ideas. He recently came up with the interesting idea—I do not agree with it but it is an interesting proposal—that the energy companies should be broken up and should no longer be vertically integrated. However, I can see no such proposal in the Opposition motion. Why is that? Is the right hon. Lady already resiling from the proposal that her boss made just a few weeks ago?

Indeed, I read this motion very carefully expecting, as usual, to come across a number of points on which we could disagree, but I and my ministerial team have

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consulted, and we cannot disagree with it. We will not oppose it. I hope that the right hon. Lady asks her boss whether she was right not to propose that key idea he made a few weeks ago.

Huw Irranca-Davies rose—

Chris Huhne: I am happy to give way to the hon. Gentleman, who, sadly, has lost his Front-Bench role dealing with these issues. I, for one, thought he performed his duties rather well.

Huw Irranca-Davies: I thank the right hon. Gentleman for his civility. However, he is rewriting history yet again. What did he and his party do throughout the previous decade and longer when we were establishing the consensus on the need to build new nuclear? Also, would he care to comment on the fact that when we left office this country was one of the top five most attractive countries in the world for inward investment on renewables?

Chris Huhne: We do not need to go as far back as that. As the hon. Gentleman knows, the coalition reached an agreement which said that, given the overwhelming support for new nuclear from the Opposition and the Conservative party, it has a part to play. I refer him to my recent speech at the Royal Society in which I addressed how we intend to make sure that we do not repeat the mistakes on new nuclear generation that, sadly, so many Energy Secretaries made in the past.

Several hon. Members rose

Chris Huhne: I will make a little progress before giving way again.

Across the country, rising energy prices are hitting households hard. On top of increasing petrol and food costs, many households are facing an increase of more than £100 in their annual dual fuel bills. For those who are struggling, it can seem as if bills simply keep going up. I am sure that all Members will join me in expressing concern about that, but sympathy from the sidelines is not enough. It is our responsibility to do everything we can to help. That is why we are focusing on the things that will make a difference both this winter and in the long term.

First and foremost, consumers need to know how they can cut their energy bills right now. We need open and honest information, so people can see the savings they can make by checking their energy deal, switching tariffs or suppliers, and insulating their homes. One of the positive things to come out of Monday’s energy summit was a commitment from the energy companies that, as part of the voluntary agreement, they will notify all their customers when there is a cheaper tariff than that which they are currently paying. That is a step forward. It is not the end of the story, but it is a step forward.

Mr Weir: Does the right hon. Gentleman agree that the choice of language is important? He says that we can reduce bills by switching and insulating, but is it not the case that, given the massive rise in energy prices, if people switch or insulate they may stop the rise being so big, but bills will keep rising? That is why people are being hit so hard. Wages are not rising, but bills are. Unless we can reduce bills, we will not help the situation.

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Chris Huhne: That is a very good point. It is certainly the case that over the past year there has been a substantial increase in world gas prices because of the high growth in the far east, the demand for gas and the Fukushima nuclear accident. That substantial increase in gas prices has inevitably fed through to bills, but I think that people understand that, by getting a grip and comparing tariffs, they can curb that increase, and sometimes offset it entirely.

Ofgem is the independent regulator, and I have a lot of respect for the work it does. It has found that people could save £200 by switching, and I should point out that an additional £100 is available for simple energy insulation steps.

Michael Connarty (Linlithgow and East Falkirk) (Lab): One of my constituents has taken the trouble to analyse each section of his bill. He found that although the gas price—the actual energy price—had reduced from being 62% of his bill to 42%, his bill had increased. When he interrogated his supplier he found that the profit level it had built in had a 9% increase. In reality, it had taken that money, which was not demanded of it for energy sources, and put it into the profit level. That is why bills are increasing.

Chris Huhne: I agree with the hon. Gentleman, which is why we are happy not to oppose the motion. I agree that there are signs in this market of anti-competitive behaviour and we need to get a grip on that, which is exactly what this Government are doing in supporting what Ofgem—the independent regulator—is doing.

Several hon. Members rose

Chris Huhne: I will make a little progress before I give way.

Our approach means working together across the consumer groups and the energy industry to get the message out about checking, switching and insulating. Earlier this week, my right hon. Friend the Prime Minister and I brought the energy suppliers, the consumer groups and Ofgem together to do precisely that. In the new year, Citizens Advice will co-ordinate a “Big Energy Week” campaign, and energy suppliers have put together winter help packages for consumers, which I am sure other hon. Members will welcome.

Geraint Davies: The right hon. Gentleman is saying that he wants to be a champion of consumer rights. He will be aware that the primary consumer watchdog on energy, Consumer Focus, which has mandatory statutory powers, is being abolished by his Government and those powers are being absorbed by Citizens Advice, which has enough on its plate with changes in legal aid, cuts and all the rest of it. Does he not accept that that change will disempower energy consumers, at least over that period of change, and that the powers of Consumer Focus are set in statute in a stronger way than those of Citizens Advice, which is a charity?

Chris Huhne: I do not agree with the hon. Gentleman on that. I care as passionately as he does about consumer rights on this issue. I spent some time on the board of Which?, the consumer association, so I will not be second to anyone on those particular issues. My experience—perhaps his differs—is that many of my

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constituents go first and foremost for advice on these issues to their citizens advice bureau, so that is an appropriate place to situate such advice.

When the coalition took office, some 400 separate tariffs were available. That is also part of the legacy we inherited from the time when the right hon. Lady’s boss was Secretary of State for Energy and Climate Change. This coalition Government have, in our Energy Bill—now the Energy Act 2011, as it received Royal Assent yesterday—taken powers to force companies to give straightforward information about cheaper tariffs. We are also working with Ofgem to cut the number of tariffs and make it easier to compare them. According to Ofgem, only 15% of households switched gas supplier last year and only 17% switched electricity supplier. Switching should be fast and easy, and we are cutting the time it takes to switch to just three weeks—that is another change that this Government have introduced. In addition, Citizens Advice and Ofgem announced record funding from suppliers for the “Energy Best Deal” campaign, which helps vulnerable consumers to shop around for the best deal.

John Robertson rose—

Chris Huhne: I cannot resist, although I hope that the hon. Gentleman will be raising a matter concerning fuel poverty. I wish he would because I will be able to respond.

John Robertson: My speech is full of stuff on fuel poverty, but I wish to pick up on one of the points that the Secretary of State made. He said that Sweden was using less energy than the United Kingdom, but that is wrong. According to the Swedish Government’s own figures, Sweden uses twice as much energy as this country does, and the cost is more. In addition, according to the International Energy Agency, Sweden’s energy use is substantially higher than that of the UK. I do not suppose he meant to mislead the House, but I think he must get his facts right.

Chris Huhne: The hon. Gentleman needs to examine the situation for households. It is clearly the case that Sweden has a lot of hydroelectricity and a lot of industries are very dependent on it. My point was about households and the household use of heating, which is key.

Millions of households could save just by switching tariffs or payment method. From now on, suppliers will write to customers to tell them about these savings—that is another outcome from Monday’s energy summit.

Alex Cunningham (Stockton North) (Lab) rose—

Ian Lavery (Wansbeck) (Lab) rose—

Mr Weir rose—

Chris Huhne: I am going to make a bit of progress before giving way again. The hon. Member for Angus (Mr Weir) has already intervened once, so he will have to wait until I have taken interventions from some of the other hon. Members.

This winter, energy bills will show customers how to save money, encouraging them to call their supplier and check online for savings. They will also have access to advice.

Caroline Flint: The Secretary of State makes much of the fact that people will be able to save if they switch. What about the people who cannot use direct debit?

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What about the people who have not got access to the internet or those who, even if they did, would find it difficult to navigate their way through?

Chris Huhne: The sort of people the right hon. Lady is talking about are the sort of people we are particularly targeting with our warm homes discount. I heard some of the interventions from Labour Members with mounting surprise, because one of the things that this Government have done, of which I am very proud, is to concentrate help on those most in need—those most vulnerable to rising fuel prices. Through the warm homes discount we have altered the previously voluntary arrangement. I say to Labour Members that their Government operated a purely voluntary arrangement with the big six, so cosy was the relationship between the big six and the right hon. Lady’s boss. It was a voluntary, grace and favour arrangement, whereby support was provided for the most vulnerable. We did not have any truck with that. We decided that we were going to legislate on this, which is exactly what we did. As a result, we will have a two thirds increase in the support made available for these social discounts compared with what was available under the previous Labour Government. So on the matter of fuel poverty, we have been doing exactly the right thing, which is to concentrate support where it is most needed and to make sure that that support is available.

Sarah Newton (Truro and Falmouth) (Con): The Secretary of State is making an excellent point about targeting resources where they are necessary. Will he congratulate Cornwall council and other councils that are taking exactly that approach and working in partnership with the voluntary sector to provide free insulation and other ways of helping people in fuel poverty to stay warm this winter?

Chris Huhne: I certainly will congratulate the hon. Lady’s local council and every council, of all parties, on that work. I hope that we can maintain a cross-party and consensual view on this. Many councils, some Liberal Democrat-led, some Conservative-led and some Labour-led, have been pioneers in this area, and I want to see them do more. Leading on that is really important for our constituents, and it is something to which I pay great tribute.

People can save money on bills, but they can also save by using less energy in the first place. Far too many UK homes are not properly insulated. Loft and cavity wall insulation can save more than £100—we are talking about very simple changes. The big six energy suppliers, which supply 99% of UK households, all offer free or cut-price insulation, yet many householders still have not taken up the offer. So from December, 4 million of the most vulnerable energy customers will receive letters to tell them they are eligible for free or heavily discounted insulation to their loft or cavity walls. Many of these people will not necessarily save energy because they are currently too cold and keep their bills down. By having that insulation, they will be able to increase their comfort, and that is a very good thing to get through an extremely tough winter. The right hon. Lady is absolutely right to say that one of the scandals in this country, which underpinned the work of the Hills fuel poverty review, is that 25,000 people die each winter because of the cold. We have to deal with that. As has been pointed

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out, it is a multiple of the number of people killed on the roads and it is a scandal that across this House—I am not going to cast further aspersions on the record of the previous Government—we have not tackled this issue with more vigour until now.

These letters will direct people to a dedicated independent helpline, as part of our programme to ensure an extra 3.5 million homes are properly insulated by the end of 2012. Next year we will also be rolling out the green deal to help even more households save money through energy efficiency.

We must also make sure that help is getting to those who need it most—the most vulnerable households. As I pointed out, discounts have risen very sharply under the coalition, and the extra support will be available this winter. We are requiring energy companies to provide help to about 2 million low-income households through the warm home discount.That is a discount of £120 for 600,000 of the poorest pensioners—substantially more than they have been getting until now. We are spending £110 million on heating and insulation for low-income and vulnerable households through Warm Front.

Caroline Flint: Is it not the case that only about one in 20 pensioners will benefit from the warm homes discount, whereas our social tariffs went to all vulnerable households? In addition, there are cuts of £100 in the winter fuel allowance for those over 80 and cuts for older people of £50. This all adds up when one takes into account the VAT increases and everything else that people have to pay the price for under this Government.

Chris Huhne: The right hon. Lady again makes a point about winter fuel payments which I should have picked her up on previously. She may not be aware of this, as she was not in the Department previously, but we have adopted precisely the policy of the previous Labour Government on winter fuel payments. We have left it completely unchanged. They increased winter fuel payments on a temporary basis and then proposed to bring them down, and we have kept exactly in line with that policy, so I am in no position to accept lectures on this matter from the Opposition as we are implementing the policy that they agreed.

Of course, cold weather payments will also be paid to households in areas with extended periods of very cold weather. Part of the green deal scheme will be designed specifically to provide affordable warmth to low-income, vulnerable households through heating and insulation measures. Those policies will make a difference this winter, next winter and every winter thereafter. However, we also need to take the right long-term decisions so that energy does not become unaffordable in future. We need to keep the lights on in the cheapest, cleanest way and to make sure that households get the best deal in the long term as well.

John Pugh (Southport) (LD): The Secretary of State may be aware that north of my constituency a find of 200 trillion cubic feet of shale gas has been announced. That will make an enormous difference one way or another if it is genuine. Would he like to comment on that and the difference it might make to prices in future?

Chris Huhne: I am grateful to my hon. Friend for that question. Our overall energy policy is designed to be robust in the face of considerable uncertainties in relation

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to technologies and what is likely to happen to the price of particular fuels. If it transpires that the early indications we have received from Cuadrilla about the size of the find under Lancashire are correct, there will clearly be an impact on gas prices within the UK. We have already seen that gas prices in the United States are half of those in the UK and the rest of Europe and are even lower than the prices for gas in the far east. This is a very important development and all our policy framework is designed to make sure that we can provide affordable, clean electricity at the cheapest possible price to British consumers in the long run. If that means cheap gas, then obviously the technological imperative is to go forward with carbon capture and storage so that we can use that gas in an environmentally friendly manner. That is precisely why that is so important.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Will the Secretary of State give way?

Chris Huhne: I must make a bit of progress with my speech; otherwise I fear we will be here all night.

Over the next 10 years, we need £110 billion of investment in power plants and another £90 billion of investment in energy infrastructure to avoid the risk of black-outs. If we do not invest now to reduce our energy use and our dependence on fossil fuels in the long term, we will have to rely on ever more expensive imports. That will leave us at the mercy of global oil and gas prices and at the mercy of events in very volatile parts of the world. We have only to look at what has been happening in Libya and the rest of the middle east to see that. The impact on energy security and household bills will be worse. This is a very important way of insuring our country against the sort of economic shocks that we can otherwise expect.

That four-pronged strategy of energy saving, renewables, new nuclear and carbon capture and storage is absolutely essential.

Luciana Berger rose—

Chris Huhne: Is the hon. Lady about to ask about carbon capture and storage perhaps?

Luciana Berger: I thank the Secretary of State for giving way. He said that energy saving was one of those prongs, and on energy saving he said only a moment ago that the Government are introducing the energy company obligation, which will replace Labour’s carbon emissions reduction target and community energy saving programme. That ECO pot is not going to go just to homes in fuel poverty but will be split, with some money going to subsidise able-to-pay households. Will he tell us how much there will be in that ECO pot?

Chris Huhne: We will be bringing forward the consultation document on the green deal and the ECO subsidy shortly, and all those issues will be addressed. Clearly, we have to make sure that we are getting value for money on both the carbon reduction side and in reducing fuel poverty because they are both very important.

I want to make some remarks on carbon capture and storage, which was raised in Prime Minister’s questions. Despite the fact that all the parties have worked extremely

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hard on the first carbon capture and storage demonstration project at Longannet, we have not been able to reach a satisfactory deal, as the Prime Minister pointed out. We will not, therefore, be proceeding with the project. That decision is purely about the viability of that particular project and is not a reflection on our commitment to the CCS programme; indeed, hon. Members will have heard me commit us to that very clearly a moment ago.

The long-term need for CCS remains as strong as ever. We will continue working across Government to start a more streamlined selection process as soon as possible and £1 billion will be available, as it was allocated in the comprehensive spending review, for that new process. Over the coming weeks, we will ensure that the lessons from that first process are fully learned and we now know that commercial-scale CCS projects are technically viable and are likely to be financially achievable. We also know more about the best way to procure these first-of-a-kind projects. Our findings will be published and made freely available on the Department of Energy and Climate Change website to help to speed up deployment of CCS both here and abroad. We will study those lessons closely as we develop the forthcoming CCS road map setting out our vision for CCS deployment.

Caroline Flint: I thank the Secretary of State for referring to the situation with carbon capture and storage projects around the country. Will he explain to the House how the Government will look to use the great deal of work and research that have been done at the plant in Scotland to make sure that the endeavours, hard work and ingenuity there are not lost but are supported?

Chris Huhne: I am grateful for that question. It is absolutely right; we have learned an enormous amount from that. A lot of work has gone into the negotiations and a lot of good engineering work has been done with the front-end engineering and design studies. They will all be published, if they have not been already, and will be made available to everyone. We are absolutely confident, as a result of this process, that we are able to go ahead with the CCS project within that budget. Unfortunately, at Longannet the difficulties were specific to that project, including the length of the pipeline between Longannet and the reservoirs, as well as other issues concerning the rest of the plant such as its upgrading to comply with the large combustion plant directive. As a result of the knowledge that we have acquired in that negotiation and as a result of those feed studies, we are confident that we will be able to take a project forward.

Mr Weir: Earlier in his speech, the Secretary of State referred to the disgraceful decision of the previous Government to abandon the gas CCS project at Peterhead, but are not this Government doing exactly the same with Longannet now? It was chosen as the only viable CCS plant in the competition, as no one else came forward. By abandoning it now, is he not putting back CCS development and ensuring that its much talked about exportable technology will not be developed in this country?

Chris Huhne: No, I disagree with that. I think that we have a very good track record at a number of our leading universities, with Edinburgh being first and foremost amongst them, of work on carbon capture and storage. One lesson that we have learned from the

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negotiations is that we can build a commercial-scale CCS plant with £1 billion. Indeed, we have had a very clear indication of interest back at Peterhead from Scottish and Southern that it would be prepared to do that with consortium partners. That is clearly going to be an offer that other contestants will have to beat, so for all the reasons that I have given and that I have explained at considerable length, we are determined that we should be successful with CCS technology. It is disappointing to me personally and to many others that we were not able to proceed at Longannet because of the specific problems there, but that certainly does not mean that we are shelving CCS.

Andrew George: I appreciate that my right hon. Friend is giving the House the benefit of time and his advice on the issue. Nevertheless, there will be concern about the impact that that outcome might have on the time scale for the delivery of an effective CCS programme. To be clear, is he saying that the difficulties at Longannet were primarily financial or technical? Does that raise a question about the viability of the technology, or can he reassure the House in that regard?

Chris Huhne: I can reassure the House that on the basis of the feed studies, that does not raise questions about the generic technology. What arose were questions related to the specific costs of employing the technology at Longannet, given how far away it is from the reservoirs and so forth. Those were the issues. We are confident that we can procure a CCS commercial scale plant within that £1 billion. That is what we intend to do.

Ian Lavery: A billion pounds was allocated to the CCS project at Longannet. I am amazed by what was said at Prime Minister’s Question Time and by what the Secretary of State has just said. That it is not going to happen. Projects 2 to 4 were already in the pipeline—excuse the pun—and I believe there are a number of interested parties. Will the £1 billion allocated for Longannet be available for one of those projects or will it be available across the board? Will the right hon. Gentleman confirm that it will be committed to CCS with coal, or could it be gas?

Chris Huhne: Let me say clearly that one of the things we will do is attempt to align our deadlines on this with the European Commission’s new entrant reserve competition. One of the conditions of that competition is that the CCS plants have to be up and running and ready by 2016. That is in answer to the earlier question about the deadline. We do not foresee a slippage in deadlines.

There is money available from the European budget to support those projects. Money will be available. That £1 billion from the UK Treasury is secure. In addition, there may be help for running costs from the electricity market reform contracts for difference. With all those things we ought to be able to make sure that we get commercial-scale carbon capture and storage up and running. The projects that have been proposed to the Commission are a mixture of coal and gas. We want to make sure that we are doing both.

I hope the House will come away knowing that we are fully committed to the programme and the technology. What happened at Longannet is a disappointment. We

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would have liked it to go ahead if we could have done it within the affordability envelope that we had and if we had not hit those specific project problems there, but we will now go ahead elsewhere and we are confident that we will be able to get the commercial-scale CCS.

Our proposals to reform the electricity market—I have already mentioned contracts for difference—will deliver the best deal for Britain and for consumers because they will keep prices down and ensure that consumers are protected. We are working on giving Ofgem powers to force companies to give money back to consumers if the companies break the rules. That is the point about redress that the right hon. Lady mentioned.

Caroline Flint: Will that include customers who have already been victims of mis-selling or is the policy only for those who might be misled in the future?

Chris Huhne: The right hon. Lady knows that unfortunately it is a strong principle right across the House, and I am sure she will agree, that we should not have retrospective legislation. Legislation is for matters going forward. I agree that it would have been good if we had had legislation allowing for redress some years ago, but we have been in government only since the last election. For 13 years that was not done by the Labour Government.

Karl Turner (Kingston upon Hull East) (Lab): Did the Secretary of State raise the issue of mis-selling at the energy summit? It seems to me that he probably was not there long enough to do so.

Chris Huhne: The hon. Gentleman is quite wrong about that. Mis-selling is clear. Ofgem had already tackled that with substantial fines and with the public reputational risk. As a result of the mis-selling that some of the companies were discovered to have engaged in, a number of them have said that they will not go down the doorstep route. There is therefore clear action on that already, but I agree that what should happen is not just a question of fines or making sure that the companies get the rap—[Interruption.] I have raised the matter with the companies and with Ofgem. It is important to make sure that there is also the possibility for Ofgem to provide redress to consumers who have lost out. That is an important principle. All of us on the Government Benches will want companies to rise to their responsibilities.

We are also working to open up the energy market to smaller companies. In the past, regulation stopped independent suppliers serving more than 50,000 customers. We have already raised the ceiling to 250,000 customers, and we are working with small suppliers to make it easier for them to comply with regulation.

Global energy prices are beyond our control, but we are doing everything we can to help households with their energy bills this winter. On tariffs, bills and insulation, we are making it easier for people to save money and save energy. Together with consumer groups and industry, we are working to improve the offer to consumers. We are taking action to help the most vulnerable households to cope with rising bills and inefficient properties. From the green deal to the reform of the electricity market, we are making the right long-term decisions to ensure warm homes and affordable, secure energy for the future.

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Caroline Flint: At Prime Minister’s Question Time today the Prime Minister suggested that he supported the opening up of the energy market to a pool. Does that mean that the Government agree with the Labour Front-Bench team that the pool should be opened up in such a way that the big six should put all their energy into a pool for everybody to compete for?

Chris Huhne: I certainly agree. We have been talking to Ofgem about this and we have been talking with the big six. I found it a very interesting proposal from Scottish and Southern that it was prepared to trade a substantial amount of its electricity in the wholesale market. Scottish and Southern said 100%—of course, that is 100% of the spot market; it does not mean that Scottish and Southern is prepared to trade 100% of its electricity. The devil is in the detail. We have to make sure that the forward market is also liquid.

I am absolutely committed. I am not in favour of the Opposition’s proposal that we should refer these matters to the Competition Commission, because for two to five years that would put a freeze on the whole market. None of the big six would need to do anything at all. They would be able to put their prices up with impunity, they would be able to cut their investment, they would be able to pay more dividends to shareholders, and we would have an awful long time to wait before we had any real reform. The reality is that we think that we understand enough about what is not right in the market, at the retail end and the wholesale end, and are working very hard with Ofgem to ensure that it is put right, which is exactly what we will do.

Dr Alan Whitehead (Southampton, Test) (Lab): Will the Secretary of State give way?

Chris Huhne: I am afraid that I have finished my speech, as delighted as I would have been to give way to my neighbour from Southampton.

Several hon. Members rose

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I must now announce the result of the deferred Division on the question relating to the Adjournment of the House. The Ayes were 306 and the Noes were 95, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

Before calling the next speaker, I inform Members that there is a 12-minute limit on speeches.

3.28 pm

Albert Owen (Ynys Môn) (Lab): It is a pleasure to follow the Secretary of State. I had intended to be non-partisan and speak in favour of consensus, but having listened to his opening remarks, I will find it difficult to be disciplined and keep to that line, because he rewrote the recent history of energy. I certainly take no lectures from him on nuclear power and many other things. I have stood on the Government side of the House and argued in favour of nuclear power, the base load, renewables and energy efficiency, and I see no contradiction between them. For him to try to knock the policy of the Labour party when it was in government is nothing short of cheek.

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I welcome the debate because energy prices are the big issue for constituents and consumers across the country. I welcome the fact that my right hon. Friend the Member for Don Valley (Caroline Flint) chose this topic for her first outing as shadow Secretary of State. She gave an excellent overview of what has happened in recent weeks.

I did not want to be partisan, because the issue is too important for that, but when people criticise what happened in the past 13 years, I must remind them that, since 2009, there has been a trend of high gas and electricity price rises. The rise in 2008-09 was seen as a one-off resulting from a peak oil situation. In 2009-10 prices came down considerably. In 2009, gas prices rose by 51% in a single year and electricity prices also rose considerably, but the following year, when the wholesale price was half what it had been at its peak, prices came down by only 6% and 9% respectively. We have seen since then a trend of double-digit rises that are hurting every household in the country. That is why the House is right to debate the matter and look for ways to help.

I am very disappointed with the summit. I tabled a question last Friday, without knowing that there was to be a summit, asking when the Secretary of State last met the big six energy companies. He has partly answered that question, but I am disappointed that he did not ask them whether they would freeze their prices in future and what they would do to bring them down. The duty of the Secretary of State is to put the consumer’s view to those companies.

Our constituents are right to be annoyed by the fact that those companies’ profits have increased in the past few months from £15 to £125 for each household. I want to make it clear that I am not against energy companies making profits or having healthy balance sheets, because we need them to reinvest in our infrastructure as we move to a low-carbon economy, but I find it very upsetting that they claim that the wholesale price is high and put their prices up, but when the wholesale price comes down, the retail price does not follow suit. Our constituents are paying for that very dearly. As my right hon. friend said, that is the rocket-and-feathers concept—prices rocket after the wholesale price increases, but they come down very slowly.

Jonathan Edwards: As a proud Welshman, like myself, is the hon. Gentleman not perplexed that Wales, despite being a net exporter of electricity—we export twice what we consume—has a level of household energy poverty at 30%?

Albert Owen: I am a fellow Welshman, but my energy policy is different from that of the hon. Gentleman. Wales is a net exporter of energy because Wylfa nuclear power station, which is in my constituency, generates 30% of Wales’s energy needs. If that was to go, we would be in a difficult situation. However, he is right to point out that some regions of the United Kingdom that generate energy pay more in the retail price for their energy. The energy companies will tell us—I have raised this as a member of the Energy and Climate Change Committee—that that is because of transmission, but those areas, which are often on the periphery of the UK, generate electricity and send it to the national grid, but the consumers in those areas pay more for it. That is totally wrong and something we all need to work together to eliminate in future.

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I wish to concentrate on two issues. The first is the reform of the regulator. I would like the regulator to have more teeth. That is not just my view. I can remember the Prime Minister, when Leader of the Opposition, saying that the regulator needs to get to grips with the energy companies and ensure that they deal with price rises. I agreed with him then, and I agree with that statement now. That is also why I am disappointed that there was a high-profile energy summit in No. 10 that resulted in these very tame reforms, if indeed they are to come about.

Ofgem has already suggested that we introduce greater accountability, greater transparency and simpler tariffs, and the Secretary of State was wrong about the time scale, because I believe that in the past year the number of tariffs has gone up considerably from 180 to some 400. I am not making a political point, because I know that many people, such as the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) of whom I am very fond, have phoned up energy company call centres and tried to switch tariffs but found it extremely difficult to do so. They have spoken to people at call centres who, despite representing and working for the companies, do not themselves know the tariffs, so the system really needs to be simplified to ensure that people understand them and can make a choice.

Even if everyone were to switch to a cheaper tariff tomorrow, they would still in a year or two’s time be paying more for their energy, so switching is a peripheral issue. We want the energy companies to divvy out some of their profits to help customers directly or to build infrastructure for the future—[ Interruption. ] Somebody shouts, “They are,” but they are not using their profits to a considerable degree.

Dr Thérèse Coffey (Suffolk Coastal) (Con) rose

Albert Owen: The hon. Lady is trying to intervene. Would she like to intervene on that point?

Dr Coffey: Yes, I would. I appreciate that the hon. Gentleman is a little sore because his island is not going to get a new nuclear power station.

Albert Owen: It is.

Dr Coffey: Well, I apologise, but who does the hon. Gentleman think is going to pay for it? It will be the energy companies. They are paying towards the construction of new nuclear power stations.

Albert Owen: I am sorry if the hon. Lady was not listening, but I believe that we will have a new nuclear power station; the consortium, Horizon, is working towards that. Issues in Germany might affect its balance sheet, but it is committed, as the Labour Government were, to the project. Work is being carried out, and I support the site that has been allocated.

When huge profits are made, the customer should not be punished, as they have been, with high rises in their gas and electricity bills. If the hon. Lady thinks the opposite, she is in a minority in the House, because we have seen excessive profits.

Dr Coffey: Will the hon. Gentleman give way?

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Albert Owen: No, I am not going to give way again. I was talking about excessive profits, but I am going to develop an argument about the off-grid, which nobody has touched on so far.

When we talk about energy prices, and about double-digit rises for people with the big six energy companies and for the 99% of retailers who are on-grid, we should also consider those who are off-grid. They are not a small minority, because a considerable number of households are not connected to the grid and have experienced—I have seen evidence from constituents—increases of about 33% in the price of liquefied petroleum gas. The cost of oil has also gone up considerably, so I welcome the fact that the Office of Fair Trading is looking into the matter, but it will not be enough just to refer it to the Competition Commission; there needs to be direct action.

I should like a windfall tax. I am not afraid to use that phrase, and neither is the Chancellor of the Exchequer, who in his Budget introduced a fuel duty—a windfall tax—to help people who were suffering then. The Government should do exactly the same for domestic energy users and households. The excess profits of energy companies should be used to help build an infrastructure, for example by extending gas mains, so that people off-grid have the opportunity—the choice—to go on to mains-supplied gas and obtain the same prices as those who are on-grid.

Indeed, we should go further. I would link off-grid issues to reform of the regulator, because the regulator should have responsibility for those who are off-grid as well as for those who are on-grid. The priority of the regulator, in its terms of reference, is to protect the consumer, yet those who are off-grid receive less protection, so I am asking for the equalisation of protection.

The Secretary of State will remember that I asked him about that when he appeared before the Energy and Climate Change Committee, and I asked the head of Ofgem, too. The head of Ofgem said, “That’s a matter for the Government”, and the Secretary of State said, “It’s a matter for the regulator.” Well, I should like to invite both of them for afternoon tea and to sit them down in a room, because people off-grid are losing out considerably while the Secretary of State and the head of Ofgem have different opinions of their remit.

The solution is simple and it could be implemented very quickly. The Government could give powers to the regulator, and the people off-grid could have protection equal to that for those who are on-grid. The 33% increase that I heard about from a constituent happened in summertime—in August—and it is not sustainable in the rural areas that are not isolated and that contain decent-sized hamlets, small villages and sometimes even small towns.

We need to be radical in our reform. Of course I agree with the Secretary of State and the regulator when they talk about simplifying bills and about greater transparency by the energy companies, but we have to go a step further and give the regulator real teeth so that it can deal with these situations. That is important to every Member of this House and every constituent we represent. We should never forget that those who are off-grid are paying considerably more than those who are with the big six.

I support many of the measures that are being proposed by the Government for electricity market reform, but they are all about the medium and the long term and, in

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the short term, people are being really hurt by their bills when they receive them. We, as the House of Commons, the Government and the regulator need to be working together for the short term. I would like to believe that the measures that came out of the summit will make a huge difference to our constituents, but that will not happen in the short term. The House of Commons—I very much welcome this debate—must fix its mind on the short term to help each and every household in the United Kingdom with their energy bills in future. Yes, there will be peaks and troughs with the prices of fuels and external issues that affect the price of energy—we all understand that—but we need to have a fair system so that when prices do come down the regulator can look at the books and say, “Yes, prices for consumers should come down by X amount as well.” Ofgem tried to do this and produced a report, but the energy companies argued with that process.

This is not anti-business or anti the big six; it is pro-consumer and pro our constituents. We all have a duty to stand up and protect their interests. The regulator needs to be beefed up, it needs to have more teeth, and it needs to be more proactive—but so do the Government. It is important to have this debate not to score political points but to put the welfare of our constituents first. They will be anxious this winter given their experience of such cold weather in the past year, and they want certainty that the House of Commons is on their side.

3.42 pm

Guy Opperman (Hexham) (Con): I genuinely believe that this winter there will be choices between heating and eating for individual families up and down the country. The fuel poverty rate in the north-east is approximately 24%; we have the second highest rate in the country. Clearly, that applies in relation to the big six, but I particularly want to speak about it in relation to heating oil and liquefied petroleum gas. I pay tribute to the hon. Member for Ynys Môn (Albert Owen). Over the past year, he and I have debated, very much with common cause, the issues of fuel poverty and heating oil, and I am delighted to follow his eloquent and well-made speech.

My constituency is the second biggest constituency in the country, at 1,150 square miles, and it does not just face problems of rural fuel poverty. The town of West Wylam, which is a suburban part of Prudhoe, is in an area that has fundamental problems of fuel poverty, and it has perfectly normal residential housing: this is not just about a farm way out west. It is not simply a problem for rural dwellings. One and a half million dwellings are dependent on heating oil. On top of that, significant amounts of LPG are used. We are talking not about a small number of people but a very significant number who are greatly affected by this, which is an important problem throughout the north-east.

I will focus on the role of the Office of Fair Trading, which I believe has done good work. Its report of September this year on Boilerjuice was a success. The report published only yesterday on off-grid energy, about which I met the OFT at approximately 12 o’clock today, is well worth reading. It is a doughty read at 352 pages, and it would be a lie if I said that I had read every single page, but I am working my way through, and none of my copy will go for fuel at the end of the day.

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The OFT’s investigation into off-grid energy is a market study. Those who analyse what the OFT does need to understand that a market study does not necessarily lead to a formal investigation. As a first point I invite the ministerial team to consider that, although clearly it is not fundamentally within their remit.

Karl Turner: The hon. Gentleman is making a powerful speech on behalf of his constituents. I wonder whether he will support the Opposition motion.

Guy Opperman: The hon. Gentleman obviously did not hear what the ministerial team said earlier, which addressed that exact point.

The OFT report is a market study, but I seek a formal investigation where there is a reasonable suspicion that the law has been breached in relation to the Consumer Protection from Unfair Trading Regulations 2008. I suggest that that applies to pricing practices, particularly when there is a varying price after a customer has placed an order. In my constituency, there is ample evidence that that has happened.

Sarah Newton: I apologise that I was not here for the first part of my hon. Friend’s speech, but an urgent matter called me out of the Chamber. The experience that he so vividly describes in his constituency is echoed in Cornwall and across the south-west. I, too, welcome yesterday’s OFT report. It says specifically that there is an opportunity for us to go back to the OFT and make the case for a referral to the Competition Commission to look further at the issue of pricing, which he has raised. Will he join me in suggesting that Members whose constituents are affected by this should join together to make representations to the OFT for such a referral?

Guy Opperman: I totally endorse that point, particularly in relation to pricing practices and the considerably enhanced prices charged by many heating oil suppliers. I have done quite a lot of research into this matter. In Hexham constituency the price of oil rose from 41p to 71p per litre between September and December last year. In that time, the wholesale price of oil went up only by about 10%.

In my constituency there are roughly 16 to 18 heating oil providers. However, 11 or 12 of those are controlled by one company. DCC Energy, an Irish-based company, has bought up many of the individual suppliers throughout the country. It operates heavily in west Wales and has been prosecuted there in relation to a trading standards case. It also operates to a considerable extent in Scotland. In Northumberland and throughout the north-east it has a substantial presence. I accept that there is competition in the sense that there are about five genuinely independent companies providing heating oil. However, the other dozen or so are providing heating oil from one global source. There is nothing wrong with that, but when one adds up the figures, it means that one company has 69% of the providers and the multitude of other companies represent 31% of the providers. That should be investigated by the OFT, and it should result in a competition inquiry. If that case does not give the suspicion of price fixing, I do not know what does.

Andrew George: The hon. Gentleman is absolutely right on that point. Across the country as a whole, a little under 30% of those who depend on oil for central heating are in fuel poverty, and they are primarily in rural areas.

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With regard to the OFT’s report published yesterday, does the hon. Gentleman recognise that it found that the terms of contracts may not be entirely consistent with existing consumer protection? The OFT states that it will examine the

“clarity and fairness of termination rights”

and engage with suppliers to discuss how to proceed. Does he think that regulation is required, or should the OFT continue to pursue some sort of voluntary agreement ?

Guy Opperman: With respect, I would say that the answer is somewhere in between. There cannot be regulation without submissions being made and investigations taking place. It is incumbent upon us not just to get upset about how our constituents are being affected by heating oil prices but to make representations to organisations such as the OFT. We must also invite the Energy and Climate Change Committee to investigate off-grid energy, which I very much hope it will do.

Albert Owen: I am pleased to help the hon. Gentleman by saying that we are going to have a further inquiry into the retail market, in which we will examine off-grid energy.

Guy Opperman: I am most grateful, and I hope that as part of that inquiry the Committee will examine the weighty report that the OFT has provided, as well as specific submissions from individuals and organisations that, like the previous three speakers, can give specific examples of price fixing or the appearance of price fixing. That is in the context of DCC, the company that I am particularly concerned about and have to deal with, recording operating profits of approximately 19.9% on an ongoing basis. I find that figure hard to square with the one given by the managing director, who when questioned in The Sunday Times said that the operating profit was only 2%—but I have taken my figure from the published accounts.

In Hexham five independents operate—WCF, Par Petroleum, Wallace Oils, GB Fuels Ltd and Rix Petroleum. I urge individual Members to draw to their constituents’ attention by every possible means, as I do for each and every constituent who is faced by heating oil problems, which independents operate in the constituency, so that they are in a better position to get a fair price.

I want to trumpet the great success of the way in which certain communities, such as Tarset, Allendale and Humshaugh, have come together and produced their own price comparison sites. For example, there is Humshaugh village shop, which is run as a co-operative. It was set up by the local community and is financed and run by the 60 people of Humshaugh. Every Monday they publish the prices available from all the genuinely independent local heating oil suppliers. Individuals can either go to the shop’s website or—this addresses the point that was raised about people who do not have internet access—see the prices in the village shop throughout the week. Everybody in the village can then assess who is providing oil locally. Such ideas need to be taken forward.

I welcome the fact that the OFT report indicates that there are problems. However, I would ask the OFT to go further, not least because the report shows that when a company is one of a multitude owned by a larger

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company, it is obliged to give people who telephone it specific information about who its ultimate owner is. That needs to be monitored, because it is not necessarily taking place. My researcher phoned one of those only yesterday and was not given that information, as should have happened according to the OFT report. I urge the various Committees involved to examine that point.

There is also tremendous difficulty for those who wish to compare prices themselves, because heating companies have no obligation to tell people the price that they are offering. Unless people ask to buy, they are not necessarily given the price. With respect, the Government can do something about that, and I invite them to sit down with individual suppliers, particularly the larger suppliers, and make that point very clear to them. If people ring up and ask for a price, they should be told it rather than the company withholding it.

Pat Glass: I am very grateful to my constituency neighbour for giving way, as we have very similar constituencies and face similar issues. Is it not also true that the price quoted when someone rings up is not necessarily the price that they are charged when the oil is delivered two weeks later? Last winter, as the hon. Gentleman pointed out, the cost of heating oil almost doubled in the space of a few weeks. Someone could order heating oil and be quoted 40p a litre, yet get a bill for 71p a litre two weeks later.

Guy Opperman: The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) is not the only one who has been carrying out research on websites. Let me cite the interesting efforts to prove the hon. Lady’s exact point undertaken by the hon. Member for Brecon and Radnorshire (Roger Williams), who ordered more than 2,000 litres of heating oil at a price of 40p a litre—again, from DCC—and received only some of the delivery, at the outset, at that price. Later that December, when the remainder was delivered, the price was 65p per litre—an increase of 25p per litre. I applaud his efforts in this House to publicise that, and previous efforts to deal with the problem, as well as the work of The Sunday Times.

I conclude by saying that I endorse much of the motion.

Sarah Newton: One of the next steps identified by the OFT was for the Government to take, because it acknowledged that people who use heating oil or LPG—or microgeneration, which the report also covers—cannot get dual fuel deals because they are off the grid, and furthermore, they are not eligible for the excellent new £125 warm home discount. This group of people, even if they are in absolute fuel poverty, cannot access some of the very good measures that the Government are introducing. May we ask the Government to consider that specific group of people, and see what could be done to help them?

Guy Opperman: I am most grateful for my hon. Friend’s intervention, and I endorse her point.

It is incumbent on us all to go back to our constituencies—not, as was once said, to prepare for government, but to prepare our constituents for the winter.