My Lords, I am grateful to my noble friend Lord Jenkin for his amendment and for raising again the important issue of competition. I reassure my noble friend that we are deadly serious about greater competition. Competition is at the heart of the Government’s drive to make sure that energy bills are as low as they can possibly be, to ensure that all consumers are getting a fair deal and, as importantly, to build the trust that my noble friend referred to.
In response to the noble Lord, Lord Cameron, we are walking the walk. That is why we have seen a great number of new entrants since 2010. The Government announced in the annual energy statement that Ofgem and the competition authorities— the Office of Fair Trading and the newly created Competition and Markets Authority—will conduct an annual competition assessment of the energy market. The first assessment will be completed by spring 2014. Together, these
independent regulators already have extensive powers to investigate the market and to implement the full range of structural and behavioural remedies to strengthen competition. The statutory framework includes important safeguards to give market participants confidence in a fair and predictable regime. The Government have established the Competition and Markets Authority, which will have strengthened responsibilities and powers and will take on the work of the Competition Commission and a number of responsibilities of the Office of Fair Trading. This will lead to more robust and faster decision-making.
We are strengthening Ofgem’s hand through the Bill. The Government are taking powers to enable Ofgem to step in to improve wholesale market liquidity should its reforms be frustrated or delayed, and we are giving statutory backing to Ofgem’s retail market reforms. We are also giving Ofgem a new power to compel energy businesses to provide redress to consumers. These measures will further strengthen Ofgem’s ability to take effective and timely action to strengthen competition.
I listened carefully to the noble Baroness, Lady Worthington, about the weakness of Ofgem and what her party would do, but Ofgem’s inception was under her Government, and they had 17 reviews. They had ample time to reform Ofgem, if they had wanted to. While I keep hearing from the noble Baroness that her party would abolish Ofgem, they have never given us a sound, credible alternative. When she says that the leader of the Opposition has put consumers at the heart of prices, I remind her that the Prime Minister highlighted the need to simplify the many thousands of tariffs that cropped up under the previous Government.
I should say to the noble Lord, Lord Berkeley, that we are not frightened of the big six. That is why Ministers in my department have been having tough, robust conversations with all energy providers to ensure that they understand quite clearly that this Government are determined to ensure the best outcomes for the consumer.
Finally, the strategy and policy statement will give Ofgem clear guidance on the policy outcomes that are to be achieved to implement the Government’s strategic energy priorities. The Government stand ready to act in support of the regulators where necessary, as I have already said to my noble friend. We had a constructive conversation yesterday in which I wanted to reassure him that those powers are already there. It is for us to ensure that they are being utilised properly. My noble friend mentioned the Which? report on ring-fencing. Ofgem, the Office of Fair Trading and the Competition and Markets Authority will consider all measures that may be necessary in the competition assessment. Together they have far-reaching powers and are able to put in place the full range of remedies, which may include some forms of ring-fencing. It is for the competition authorities to decide what needs to be done, based on evidence. I hope that my noble friend is reassured that the Government are indeed taking this matter very seriously. The regulators have extensive powers to act, which are being strengthened by the creation of the Competition and Markets Authority. I hope that on that basis he is content to withdraw his amendment.