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UK Government's Energy Policy

The right hon. Gentleman has the disadvantage that he was not here during that particular exchange, when it was clear that the objection of the shadow Secretary of State is that my right hon. Friend the Secretary of State did not automatically override all the planning processes and give the green light, ignoring all the proper ministerial responsibilities that she has. I want to get to the main thrust of what I want to say, if my hon. Friend the Minister will excuse me, because we are running short of time. I have been listening to the debate and I must say that I take a much less benign view of the structure of our electricity market in the UK than appears to be the case for many hon. Members who have contributed. We know that reform of the electricity market is taking place. Curiously enough, that reform—the consultation—ends today. The reform is being driven by the need significantly to increase the number of investors and the capital available for new renewable energy production and transmission. The numbers involved are mind-boggling. By 2020, those factors have to increase by almost double—we need to double our production. Ofgem has estimated that the investment needed may be in the order of £200 billion. Ernst and Young has suggested that it could be significantly more than that in the 10 years thereafter—the figure could go up to as much as £450 billion. From Ernst and Young’s report, it is clear that that investment cannot be produced, even by the companies that are now in the market. A number of companies are looking to participate in this market opportunity, including a number of interests in Wales. However, I understand from those prospective investors that the obstacle to investment as they see it is the failing structure of our electricity market here in the UK and in Wales. That is why I applaud the Secretary of State for Energy and Climate Change on launching this review. As I suggested, one of the failures of the privatised electricity structure is the market dominance of the supply and transmission networks, which have effectively become privatised monopolies. [ Interruption. ] Yes, the hon. Member for Arfon is right. It might well be that that the Office of Fair Trading is saying that there is competition elsewhere in the market, but that is not the case in this sector. It is a scandal that more than half the companies involved in this part of the market have been targets for investigation by the regulator, Ofgem. Several have been fined sums that run into the millions. The issues we are considering are abuse of market position, manipulation of prices, mis-selling to consumers and profiteering. I am a committed supporter of market economics, but my problem is that those companies are not subject to proper market disciplines and are viewed as money-printing opportunities. In the UK, we have 14 transmission regions and fewer than that number—just seven company groups—have the licences to supply electricity through those networks. It is of little surprise to find that few of them are UK based—we have companies from Europe and elsewhere, such as the United States. I hope that the Secretary of State for Energy and Climate Change will respond to widespread concerns that have been raised about the market dominance of these licence holders and subject the current arrangements to a full-scale re-examination. In south Wales, we have a licensed, monopolist electricity distributor, which chooses to base itself outside Wales, in Bristol. It is controlled from Pennsylvania in the United States of America. Every approach by our local media to that company and its professional advisers in relation to local concerns just draws a terse ““no comment.”” It employs excellent IT staff who produce mind-boggling and engaging websites, expensively portraying their supposed commitment to environmental standards. We in Cardiff all know they are a work of fiction, as anyone who observes the performance of that company in another area—it drained Llanishen reservoir and is now applying to convert it into a rubbish dump—will know. It is essential that as part of the Government’s review of the electricity market we urgently address the market-dominant position of those companies. I was astounded to find when I looked through the legislation that the only way the licence can be taken away from those companies is by mutual agreement. We must demand much higher standards from those companies that are licensed by the Government. We must create a much tougher regime, and we must be prepared to revoke licences when such companies abuse their position, instead of just applying meaningless fines. Companies that are subject to Ofgem investigation should know in future that revocation of their licences is a measure that the Government are prepared to add to Ofgem’s powers and subsequently to see enforced. I touch briefly on some of the remarks from the hon. Member for Arfon on fuel poverty. I will not go into what that is, because all hon. Members in the Committee know, but we have had commitments in legislation since 2000 to address that. Members on the Government Benches care about that as much as Opposition Members. There is a commitment to eradicate fuel poverty by 2016. Curiously, for reasons that I do not altogether understand, the fuel poverty strategy for Wales has a target of 2018. I thought that that was a typographical error, but I subsequently discovered that it is right. I do not quite know why the Welsh Assembly thinks it is right to aim to eradicate fuel poverty two years after we aim to do so in the rest of the UK. The bottom line is that we are going in the wrong direction. A report last year made it clear that we started with 2 million UK citizens in fuel poverty in 2004. There were 2.5 million in 2005, 3.5 million in 2006, 4 million in 2007, and 4.5 million in 2008. The projected figure for 2009, which will be published later this year, is 5 million people living in fuel poverty. I applaud the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle, who recently reiterated that it is the coalition Government’s commitment to match that 2016 target, but we must ensure that it is delivered. I support the Government’s refocusing of support under the Warm Front scheme to those who need help, but there is a much greater responsibility on the energy companies that are too often guilty of cheating vulnerable customers instead of trying to help them. I do not expect Ministers to come back in 2016 and say that they did their best but, as the Labour Government said last year, that they were defeated by rising energy prices. I must tell the Secretary of State and my hon. Friend the Minister here today that those excuses of the last Administration are just not good enough.