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Proceeding contribution from Tom Clarke (Labour) in the House of Commons on Tuesday, 5 February 2008. It occurred during Adjournment debate on Energy Regulations (Consumer Prices).


Energy Regulations (Consumer Prices)

My hon. Friend makes a good point, which has been raised again and again by my constituents—and, no doubt, his. The Daily Record leader concluded by referring to people power. In fairness, it was encouraging people to switch where that would be appropriate. However, it said:"““What's more, people power is the only way to keep prices down.””" I welcome what the Record is doing, but, as to people power, Members of this House have tried again and again to exercise exactly that. One of my reasons for calling for a debate last January was that my Lanarkshire colleagues got together and, trying to speak for 500,000 potential consumers, we wrote to all the energy companies and said, ““If you can reach agreement with companies on a discount, we offer you the prospect, as Members of Parliament, with nothing to gain, of a forum to enable the big companies to speak to the people. There would be competition in action and our constituents would have the opportunity to choose the company best suiting their needs.”” What we got from many of the companies was absolute abuse. There was no suggestion that our constituents could enjoy the same access as companies. I spoke to a gentleman from a big company yesterday who told me that it had an agreement under which it paid for bulk purchase five years in advance. I do not know of any of my constituents who are being urged to switch who would get that benefit. I want now to discuss switching, and what it means in reality. I use the word ““reality”” because I am a realist. The hon. Member for Twickenham accepted, and I agree, that of course wholesale prices have risen and that oil and energy reforms cost more. Inevitably that has an impact on the prices that must be considered. My question is why the consumer should bear most of the burden. I think that that is the question asked by most of us. In a truly competitive market, if only two, not one—because we heard from the hon. Member for Twickenham that one of the energy companies has acted pretty well in this context—offered their consumers reasonable prices, they would undercut the rest, and bring about an exercise in real competition and choice. Yesterday we received information about the publication of a poll by Save the Children. Its findings were very disturbing. It showed that nearly one in five families with kids cannot afford to heat their homes. It also showed that 19 per cent. of families could not keep their homes warm because of the cost. It indicated that 15 per cent. of households cut back on food, and the same number on clothes. If we are to be led to believe that the answer to all that is switching—and I do not want to discourage anyone who is free to do it from doing just that—my response is that there are very few facts to support that view. For example, npower announced an increase this January. Even if people wanted to switch that would take six to eight weeks, by which time it will be almost spring, and those people will have had no help with the severe winter conditions that many parts of the United Kingdom have had.


Secondary information

Type
Proceeding contribution
Reference
471 c196-7WH 
Session
2007-08
Chamber / Committee
Westminster Hall
Subjects
Costs Energy Energy supply Prices Regulation EU energy policy Trade competitiveness Social tariffs
Link
View this Proceeding contribution on www.publications.parliament.uk