WEEKEND WEB: Vertically integrated energy giants have let us all down
Hayes in the House: By MP John Hayes
This week, the Domestic Gas and Electricity Tariff Cap Bill will have its third reading in House of Commons.
The Bill proposes to put an absolute cap on the price of standard variable and default tariffs in order to ensure fairness for consumers by tackling unfair practices in the energy market.
The ‘big six’ – Centrica, EDF Energy, EON, N-power, Scottish Power and SSE – dominate the market, supplying around 80 per cent of electricity and gas to British households, although this has fallen by over 15 per cent since 2010.
This would be of less concern if they were producing reliable cheap energy for their customers, but in contrast, they hiked up their prices in 2008, 2016, and 2017 which, according to the Competition and Markets Authority, has resulted in consumers paying up to £1.4billion more than they should; a £300-a-year overcharge for each customer using the big six.
These vertically integrated energy giants have let us all down.
An energy cap was first introduced in 2017, when five million households were protected from higher bills. Now it is time to protect the other 11 million in England, Wales and Scotland who are paying too much.
Following privatisation in 1989/1990 under Margaret Thatcher, prices for electricity and gas fell in real terms. But, from 2000, under the negligent watch of later Governments, prices began to rise in real terms and the unfairness begun to bite.
As Energy Minister in 2012-2013, I addressed, at least part of, the first duty of government – which, according to John Ruskin, is to ‘see that the people have food, fuel, clothes’.
I set out to redefine fuel poverty so those families who were just about managing would no longer be neglected.
The Energy Act, which I took through the House of Commons as the Minister, had very clear and simple aims: to provide people the energy they need, at the times they most need it and at the lowest tariffs.
The Act on which I worked planned a path to a future where energy supply is secure; where we build an energy infrastructure that is fit for purpose, and where the vulnerable are protected from unaffordable energy bills. However, there is still more to do; we need more action on gas storage. It is plainly unacceptable that after a single cold snap we are told that the snow almost exhausted our energy reserves.
This new proposed Act is necessary to secure a fair deal on energy for the people of South Holland and The Deepings, and across Britain.
It is time to bring the powerful energy giants to heal in the interests of all the nation.