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Energy Prices

That is a very good point, and I thank the hon. Gentleman for making it, but given the sometimes huge price differential between online and offline accounts, I hope that Ministers can work with Ofgem and the suppliers to seek to narrow the gap. In recent years, competition for new customers seems to have been increasingly focused on price comparison websites. That has meant that those who use such tools can find massive discounts for web-only accounts, while the majority, who do not, end up paying more. To improve competition, we need simpler tariffs. Over 70% of consumers tested in Ofgem's market research said that they would be more likely to switch if tariffs were made clearer. With a bewildering 400 or so tariffs available, only 44% of people in Ofgem's research were able to select the cheapest tariff, even under a simplified form of the current arrangements. We also need tariffs to be structured in a way that encourages energy conservation. A system of rising block tariffs—which was mentioned earlier—where customers pay less for the initial blocks of consumption and a rising amount for subsequent blocks, would provide an additional financial motivation for households to consider energy conservation. Low energy users would be rewarded for their efforts. At present, intensive energy users pay proportionately less. I recognise that there are concerns about the unintended impacts that such a system could have on households that necessarily consume high amounts of energy, such as those of people with long-term health conditions who need to keep their house at a higher temperature. Perhaps we could consider other forms of social tariffs for such households, and examine whether extra support could be made available for housing insulation improvements, possibly through the green deal and through energy company observation. I know that Professor Hills's fuel poverty review will consider tariff structures in its final report, and I hope that energy conservation will be seen as an important part of that work. I also want to mention smart meters, which could play a massively important role for consumers. Every household should have one by the end of this decade. As well as encouraging more efficient energy use and allowing for more precise billing, these meters will provide consumers with billing information on what they are paying for, at the touch of a button. There is great potential for people to use that information to ensure that they are getting a good deal. For households to get the maximum benefit, consideration must be given to how best to inform, engage, and motivate consumers to use their meters to the best effect. The consumer engagement strategy, which I hope to see being developed and implemented during this year, will have a vital role to play in that regard. Simplifying and reforming tariffs and improving transparency are all necessary short-term steps required to increase competition. There are a few encouraging signs of competition in what is, overall, a difficult market for consumers. Today's announcement by EDF of a reduction in its customers' gas bills in response to the falling cost of imported gas, following similar moves by smaller suppliers such as Ovo and the Co-op, will be welcomed by many of my constituents. Last year, however, rising costs were passed on to customers very quickly, and I now want to see—on behalf of all of my constituents—action being taken by the other big five energy suppliers to reduce their prices. Whether or not they do so will be an indicator of how competitive the market is for consumers. If suppliers do not reduce prices, how many of their customers will go elsewhere? Promoting competition now is vital, and I welcome the emphasis that Ministers, working with Ofgem, have given to this issue. Today's debate is important. The issues are not simple, but the public rightly expect Ministers to intervene, and I welcome the progress that has been made in recent months. We are heading in the right direction, and I urge Ministers to continue.