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Energy Regulations (Consumer Prices)

I am not sure that I do agree. There is a problem with energy suppliers—I shall come to my conclusion on that point in a moment, which is similar to that of the hon. Member for Selby. However, I do not think there is an economic, nationalist argument. I am not sure that having Union flags flying in the board rooms of energy companies would necessarily alter their prices. It is not a question of the nationality of owners, but there is a problem. That has been recognised by many in the competition business. Stephen Davies, a leading adviser to the Office of Fair Trading, has described the Ofgem approach as misguided and misinformed, and argues that there is a serious problem. Surprisingly, the issue has been taken up by the Competition Commission. The problems are complex. We are not talking about price fixing and crude cartels, but there is a competition issue. The head of the commission has argued that the purpose of its market investigations is"““to enable the competition authorities to take an in-depth look at markets where competition is thought to be not working well, but where the problem does not at first sight appear to emanate from the dominant position of a single firm or the existence of hard core cartels.””" That describes the energy sector pretty well. He then makes a slightly odd remark:"““Despite the CC's powerful armoury of regulatory and competition enforcement powers, its involvement in regulated sectors…has been minimal. Whatever the justification…the fact is that regulators are not making references to the CC for market investigations.””" I want to know why the commission is not being involved. It clearly has the competence and powers, and is willing to look into the issue. It feels that Ofgem is not making a reference that it should make, and many questions need to be answered, so why not have an investigation? One aspect of Ofgem's conclusions is right: it accepts that there is monopoly profit in the market. That arises from the gains that producers make from being gifted trading certificates under the European trading system. In response to the Chancellor's intervention a few days ago, Ofgem estimated that the energy industry will benefit from a windfall worth £9 billion of trade permits under the scheme over a five-year period. Effectively, there is a gift to the industry of £9 billion over five years because companies are being given the permits free of charge. That is a pure windfall and has nothing to do with efficiency. A series of questions emerge from that situation. First, what are the Government doing about it? Does the Minister intend to implement Ofgem's recommendation that the windfall should be channelled—it did not suggest a mechanism—to those who are hardest hit by the energy price rises? Should companies try to ensure that it is passed on to all consumers? I know that he is trying to introduce an auction system; I think that 7 per cent. will be auctioned in the next few years, but why only 7 per cent.? Why not 17, 70 or 100 per cent.? It is a free gift to producers, after all. Why is it not being auctioned as one would expect in a market? I expect that he will say that if it were auctioned, companies might try to pass the cost on to consumers, thus pushing up costs even more, but that is why the problem has to be dealt with in conjunction with a reference to the Competition Commission. Different aspects need to be considered together.