Energy Prices - 16th December 2010

10:38 The Secretary of State for Energy and Climate Change (Chris Huhne)

Department of Energy and Climate Change Ministers and officials meet both Ofgem representatives and suppliers regularly to discuss market issues. Ofgem monitors the market closely, and reports quarterly on retail prices. Its latest report shows large increases in estimated supplier margins—that is, profits—for the year ahead, which are mainly due to recent price increases. I am disappointed by that development, and I welcome the announcement of Ofgem’s review of the retail market. We are also taking other measures to encourage new market entrants to provide new competition.

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10:43 Tony Baldry (Banbury) (Con)

On energy prices, how will my right hon. Friend ensure that the carbon floor price encourages investors to put money into green energy and does not simply become a mechanism that substantially increases energy bills?

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10:43 Chris Huhne

That is one element of the proposals we will be bringing forward later in the consultation document. Indeed, we will make a statement on it. The Treasury will consult on the carbon tax element today. It is one of four key instruments that we will suggest should play a part in reforming the electricity market, taken together with our price support measures and our very keen enthusiasm to encourage market entrants. As competition is the best guarantee to consumers, I believe we can ensure that we have the best possible deal for electricity and gas supply in future.

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10:44 Chris Huhne

I am grateful to my hon. Friend for his kind remarks. There was an outstanding team effort at Cancun. The Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who is responsible for climate change, and the rest of the team played a tremendous part in making sure the outcome was much more successful than we might have hoped even as recently as early in that week.

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