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Energy Regulations (Consumer Prices)

It has also played a key role in terms of the social responsibility of the companies. I will not mention all the different criticisms that Energywatch makes of the energy markets. There are well over 20 criticisms, and they break down into different themes. One feature of any market that is competitive is the flow of information and ensuring that people know what is happening. Energywatch criticises upstream long-term gas sales agreements, which account for more than 85 per cent. of source gas supplies into the UK. It states that"““These have the effect of withdrawing from the open market, information on prices and volumes which is necessary to make open markets work””." There are many criticisms of price transparency and Energywatch goes into great detail about what it calls market foreclosure, which I understand relates to the great difficulty that any company has in breaking into the big six. From 20 down to six has already been referred to as the number of effective entrants in the market. That situation is quite remarkable. The hon. Gentleman referred to British Energy, which is by no means a small player. It has complained to Ofgem that "““the access of the 'big six' to their own power stations and gas supplies undermines competition by restricting energy sales on the open market.””" And that energy trading"““increasingly forecloses the market to new entrants””." Average UK consumer gas prices between 2004 to 2006 rose by 64 per cent. as opposed to 19.5 per cent. across six peer nations in Europe, in which there are apparently much less competitive and deregulated markets. So, what are we asking for? We are asking for a reference, which is quite a simple request. Why is Ofgem not making a reference and why do regulators generally not make references about the markets that they are in charge of to the Competition Commission? I suggest that it is because of pride. Ofgem got rid of price controls some years ago and it is reluctant to admit that it is not capable of giving both the business and the residential consumer the best possible deal because of the structure of the market. That is why Ministers were given the power to make a reference in the legislation. I understand that doing so is difficult because many of the businesses concerned are the same ones that are building new power stations, upon which the nation relies. However, overall in business terms, I think that the Government would be incredibly popular if it made such a reference to the Competition Commission. For example, manufacturing industry is very critical of energy prices and the influence of the big six. I realise that it would take political courage to make such a reference, but I would like to think that the Chancellor was serious when he summoned Ofgem the other week and that when he studies the documents from Energywatch and others, he will realise that an examination of the issues is essential so that the energy companies and the critics can both make their case as we move forward. The issue of social tariffs has been well covered. We last spoke about the subject in a debate on fuel poverty in the House a couple of weeks ago, and I was particularly critical of npower and the chief executive of npower retail, David Threlfall. It is interesting that in recent weeks even Ofgem has picked out npower as having the most to do to improve its social responsibility and tariffs.