Energy Bill

I am conscious that we have 13 minutes left as we begin the second of five groups of new clauses, new schedules and amendments, so I shall be brief in the hope that, between us, we can start to consider the third group before we have to vote. I am grateful to the Government for tabling new clauses 9 to 13 and the consequential amendments, which would introduce provisions that my hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis) and I sought to introduce in Committee—but which the Government voted against. A belated conversion is better than no conversion, and I am always willing to receive a better drafted amendment, but I just make it clear that we are doing something that we should never have had to do by legislation, because the situation should never have arisen. For the first time, we are ensuring that the big six energy companies tell people in advance of changes to their prices. Today, they can still tell people 65 working days after they have changed their prices, and that is just nonsense. They should never have been able to do so, and I am grateful that at last common sense has prevailed as a result of my party's pressure, which the Conservatives supported and, at last, the Government have acknowledged. That is, however, symptomatic of the problem that the right hon. Member for Suffolk, Coastal (Mr. Gummer) identified a moment ago and my hon. Friend the Member for Harrogate and Knaresborough and I have identified all the way along. Late in the day, the Government have realised that the big six energy companies have called all the shots, and the regulator, Ofgem, which the Conservatives set up when they were in power and Labour allowed to continue, has just not been up to the job. That is why we have also tabled new clauses 18 and 21, which go together as a pair, and new clause 22. I shall briefly comment on each one. I would like to signal in advance, Madam Deputy Speaker, that if you are very kind and indulgent we would be grateful for votes on new clauses 18 and 22, but if not on both, then on one of them, at the 6 o'clock guillotine. New clauses 18 and 21 contain an absolutely straightforward proposal that was picked up on by the right hon. Member for Suffolk, Coastal; I am grateful for his support. At the moment, if a company has a 20 per cent. share of the market, it can block any proposals by the regulator for changing the licence conditions. Yes, there is an appeal mechanism, which can be taken up to the Competition Commission, but the regulator has shown itself to be very reluctant to go down that route. We are seeking to ensure that one of the big six companies cannot alone prevent changes in the rules that would be against their interests. It is entirely wrong, and unacceptable, that in terms of prices and the way that the energy companies give people information about what they are doing, one company can hold consumers to ransom in this way. Our proposals are thoroughly supported by Consumer Focus, the consumers' representative group. Our second proposal would prevent energy companies from being able to collect a set of licences and thereby accumulate a similar power, under the radar, in a way that works against the fulfilment of consumers' wishes, as reflected by Ofgem. The third proposal is probably the most timely and would affect people most at the moment. Colleagues will probably be aware that on Monday, Ofgem, like a sleeping giant waking up to its obligations, produced a report on the prices that the gas and electricity companies have had to pay and the prices that they were charging their consumers. In summary, as was reported yesterday in many newspaper headlines and national news bulletins, energy suppliers are making more than £100 out of every customer by refusing to cut bills during the record freeze. We have had record cold weather, with people probably having had to use their energy supplies more than in any recent winter in living memory, and yet during that period the energy companies have had a larger share of profits than ever before. The figures for the big six companies—British Gas, Scottish Power, EDF Energy, npower, Scottish and Southern Energy and E.ON—show that in the last quarter, net profit margins per average dual fuel customer widened from £75 last November to £105 at the start of this month. That is the highest average margin enjoyed by the industry since 2004. In the next few days, we are expecting some of the big companies to report their profits, with possible increases in profits up as much as 50 per cent. and potential profits of up to £550 million. When bills such as the one that I have here drop through people's letterboxes telling them that prices are going up or staying the same, it is not an unreasonable proposition that the customer should know what profits are being made out of them by the big six energy companies. I am sad that the Minister resisted what seems to be an absolutely essential prerequisite for customer choice. Liberal Democrat Members take the simple view that, so far, the big energy companies have given Government and Ofgem the runaround, and Ofgem, instead of acting in the interests of the consumer, has been a toothless tiger. Prices have gone up for consumers, many of whom have low household incomes. People have been paying over the odds and the energy companies have been making massive profits. We have to change the balance of power, and all these new clauses are about doing that. The Government have conceded on one of them and we are grateful. However, that is just the beginning of what needs to be done, and it is sad that it is so little, so late, and that the Government are unlikely to accept the rest of the amendments.