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Energy Regulations (Consumer Prices)

It is a pleasure to make a brief contribution to this debate. I think that there is a television show called ““Before They Were Famous”” and those of us who are regulars in Westminster Hall debates listened to the hon. Member for Twickenham (Dr. Cable) before he was famous. We are used to his analysis and sharpness and were not at all surprised that in many people's opinion he was judged to be the parliamentarian of recent months and the past year. I am pleased that he has initiated this debate. It is also a great pleasure to follow my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke). As I said, I shall make a brief contribution in support of the hon. Member for Twickenham and the three essential points that he made. The Government should at least consider three regulatory interventions in the energy market: first, a reference to the Competition Commission of the big six; secondly, consideration of whether the Energy Bill should contain a provision on a minimum social tariff for the energy companies; and thirdly, examination of whether the Government have done enough in relation to the boast of the former Chancellor, now the Prime Minister, that on the issue of gas storage and pipelines the companies will have to use it or lose it. I think that the former Chancellor used that phrase in a Budget a couple of years ago. I want to examine those issues briefly and I will try not to go over the ground that has already been covered. In referring to the European energy market a few years ago, one commentator talked about the seven brothers—the seven big energy companies—that dominate the energy market. We have six, not seven, brothers who dominate our energy market. It is worth listing them for the record: RWE npower, EDF Energy, British Gas, Scottish and Southern Energy, E.ON UK, and Scottish Power—which is being taken over by Iberdrola, a Spanish company. In recent weeks there has been confusion about the precise allegations that are being made about those six companies. For example, The Sunday Times ran a story about the Energy Retail Association and suggested that there had been meetings between energy companies, and that collusion and price fixing might be happening. I have seen no evidence of that. If there is evidence, it is a serious matter for the Office of Fair Trading. However, the fact that there is no proof has been used by some to say that there is no problem. The hon. Member for Twickenham referred to the Chancellor summoning the Ofgem regulator, who assured him that the market was competitive, in response to which the Chancellor said, ““That's all right then””. Those developments have occurred over recent weeks, but the essential point is the structure of the market and vertical integration, to which the hon. Gentleman referred. No one has mentioned Energywatch so far in this debate. It has done an in-depth analysis to support some of the studies that have already been mentioned. Those studies discuss vertical integration—a market where a large number of the players are not just producing electricity and gas but retailing it, and are involved in every part of the process. In a short paper, which I recommend to the Minister, Energywatch mentions various anti-competitive practices that a vertical structure introduces.