Yesterday, I spoke in a debate called by my colleague, John McDonnell MP, regarding the resources and capacities of HMRC, following further job losses. The text of my speech is below. I wanted to draw attention to the fact that, while thousands of people are losing their jobs, three new board members have been appointed at £20,000 a year. This included Volker Beckers, the former RWE Npower Chief Executive, an appointment I have already been critical of – see here.

Speech

John Robertson (Glasgow North West) (Lab): I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on getting the debate, which is important. I do not intend to go over the same ground as other colleagues, but some points need to be re-emphasised. I am looking forward to the Minister’s reply, and if he gets time, I hope that he will answer a few of my questions, although I am happy to get a response in writing.

Other than the 40,000 jobs that will be lost by 2015—over the past eight and future two years—which is bad enough, what we have is an HMRC that has just employed three new non-executive board members. Volker Beckers, previously chief executive of RWE npower, is now the chair of the scrutiny committee and has a job worth £20,000 a year. That might not be an awful lot to Mr Beckers, but it would be to people who were about to lose their jobs. Why does that man have a job at £20,000 a year, which will not mean a lot to him? He also comes from the electricity companies, which have been ripping off customers left, right and centre, although the Minister might consider the case to be one of poacher turned gamekeeper. That might be right, but I would still like to know the reasons.

Norman Pickavance was previously director of human resources and communications at Morrisons. He left Morrisons just before it announced a third year of no profits. Will he be asked to bail out of HMRC if it is not successful? He is on a retainer of £15,000 a year, and I would like to know what he does for that £15,000 a year.

John Whiting, previously of the Chartered Institute of Taxation, perhaps has a job that is connected with HMRC, but he is working for it only part time, and he will receive £20,000 a year. How much time will he spend earning that money, and what will he be expected to do in return?

On 1 February, the Daily Mirror reported that a group called the Cup Trust had been banking millions of pounds and giving out millions of pounds in gifts to people, yet only 8% of its money seems to go to charity. Two days later, the same newspaper revealed that it had not given £80,000 to charity, although its books said that it had. That is not tax avoidance; it is ripping of charity people. On many occasions, I have asked what happens to the extra money that is put aside for proper charities, and we are told that the Treasury takes it back and will not give it to charities that do the right thing. The Daily Mirror’s headline stated:

“Charity tax avoiders: Scam bosses could trouser £7.7 MILLION while good causes received just £135,000”.

If the Daily Mirror can find that information, and we hear about it only through the paper, what have the Treasury and HMRC been doing?

The problem with HMRC is not the people at the bottom—the 40,000 people who will lose their jobs or have already lost them—who do a good job and work hard, but those who run it and are in charge of those people. That, Minister, is you.

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Here is an article I wrote on my Westminster Hall debate on ‘Trends in donations to charities’, which was published here.

John Robertson MP has arranged a Westminster Hall debate on trends in donations to charities. He recognises the important role charities play across the country and how many rely solely on donations to keep going.

The charity sector is in crisis. Towards the end of last year, charities announced a 20% drop in donations and one in six said it is facing closure this year if something does not change. We rely heavily on charities to support the most vulnerable in our society – in fact the Government’s ‘Big Society’ puts them at the heart of this.

Charities provide much needed – and often niche – services. One charity for example, One in Four, says that it relies on donations and yet 80% of its clients are referred to them by the NHS. Another example comes from my constituency, where there are now more senior citizens than sixteen year olds. The Glasgow Old People’s Welfare Association provides support and care for these elderly people who are struggling with soaring living costs. It is clear that charities play critical role in our society and we need to protect them.

This January it is make or break for hundreds of voluntary organisations across the country. Welfare reform and the reduction in child benefit allowances are going to hit charities from all directions. Vulnerable people are facing difficult times and more people will be turning to our voluntary organisations for support. This trend has already begun, with the Trussell Trust charity doubling the number of food banks it oversees. From the other direction, charities are suffering from decreased personal budgets. Those who could afford to give in the past are having to make sacrifices – and charity donations are, unfortunately, one of the first things to go.

It is time we did something to protect these vital support lines. In this debate I will be looking at ways we can increase donations from the public, as well as making donations go that little bit further by improving and modernising the Gift Aid system. The rise in new technologies also provides both a threat and opportunity to charities. While online marketplaces are strong competition to charity shops, we could do more to encourage donations through the internet and in other ways.

The Government wanted to make charities a pillar of its support system. It therefore needs to put more resources into ensuring they are able to fulfil this role. We are facing a bleak 2013 if nothing is done and I hope through this debate we can protect the thousands of people who rely on our great British charities.

John Robertson is MP for Glasgow North West.

The Westminster Hall debate is 4.30 – 5pm on Tuesday 8 January.

Response: Charities Aid Foundation

“We are delighted that John Robertson MP is leading today’s debate on the subject of charitable donations. Pressure on the services that charities provide is greater than ever, particuarly as donations are in decline and government funding is being stripped back.

“Mr Robertson quotes CAF’s UK Giving report and states that charitable giving has plummeted by 20% in 2011/12 – a completely unprecedented decline. A CAF survey of charity chief executives also found that 26% had cut frontline services and 25% had made staff cuts.

“In response, alongside the NCVO, we have launched the Back Britain’s Charities campaign and urge everyone to sign-up. The campaign seeks to highlight the valuable work charities do within our communities, often providing help for the most vulnerable amongst us. We want the government, businesses, the public and charities themselves to work together to secure the future of the voluntary sector and protect the vital contribution charities make to our society.”

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John Robertson (Glasgow North West) (Lab): The Environment Secretary this week described wind turbines as “inappropriate technology which matured in the Middle Ages.” Does the Prime Minister agree? If not, why not?

The Prime Minister: We are making serious investments in renewable energy. We have set out a regime of subsidy that stretches right out to 2017 and beyond. That is why the renewable energy capacity of this country has doubled over the past two years under this Government.

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Letting 16 and 17-year-olds vote in the referendum, but refusing them the right to vote in the General Election, has been criticised in a parliamentary debate.

The referendum deal, agreed yesterday, was debated in the UK Parliament last night. Scottish MP’s turned out to discuss the agreement that has been made. During the debate, John Robertson, MP for Glasgow North West said:

“These 16 and 17-year-olds will be allowed to vote on Scottish separation, yet, six or seven months later, they will not be allowed to vote in a general election.”

Speaking after the debate, Mr Robertson said: “It is absolute hypocracy that these young people will be given the vote but in the European elections before it, and the General and Scottish Parliamentary elections after it, they cannot vote. Why do the arguments about paying taxes and being able to marry not hold for these elections as well?”

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My first order of business in Westminster this September has been to propose a simple solution to help over 200,000 energy customers switch supplier and manage their debt more easily.

An outdated regulation says that if a pre-paid meter customer has more than £200 of debt, they are not allowed to switch supplier. This can trap customers in hugely expensive tariffs, as a pre-paid meter customer could save over £100 a year simply by switching.

Discussing the Bill with sponsor Cathy Jamieson MP

On Wednesday 5th September, I made this argument in Parliament, showing other MPs how some of the most vulnerable in society could be helped through this simple administrative change.

The burden of debt has become even worse for many families in the last few years. And I think the big energy companies are taking advantage of this, through raising their bills and taking healthier profits for themselves. I saw this proposal as a way of making them act a little bit more fairly and giving people more leeway on their debts.

Discussing the Bill with sponsor Jim Sheridan MP

Ofgem, the energy regulator, has, as a result, agreed to try to raise the level at which people can change their supplier. I will be pushing to ensure this is done quickly, before the cold weather sets in.
I would be interested in finding out other ways I could help you pay your energy bills, so please get in touch with me if you are struggling and feel the Government might be able to help.

Presenting the Bill in Parliament – Wednesday 5th September 2012

Full text of speech (Check against delivery)
I beg to move that leave be given to bring in a Bill to require the Secretary of State to raise the level of debt below which pre-paid meter customers may change their energy supplier; and for connected purposes.

Mr Speaker, I raised this issue in parliament before through an oral question to the Minister for Energy and Climate Change, on 26th January 2012: Column 401 and then again in a written question, on 1st May 2012: Column 1506W. On the first occasion, the Rt. Honourable gentleman said he would ask Ofgem to look at this in detail and in the latter he said this issue was to be dealt with by Ofgem. In the interests of hundreds of thousands of energy customers, I am presenting this Bill today to get some actual movement on this simple but crucial proposal.

Through raising the level of debt at which pre-paid meter customers may change their energy supplier from £200 to £350, around 200,000 customers would be able to escape crippling energy tariffs. It’s a tiny change, but would make a huge difference. I’ve mentioned time and again how the cartel-like Big Six have too much power. By trapping disadvantaged customers into extortionate tariffs, they are proving once again that they need to be shown what it means to be fair and responsible.

The profits of the big six energy companies have gone up almost a third since 2008, and payouts to shareholders increased across the board, up an incredible sixfold since 1999 in the case of Centrica, which owns British Gas. So I would argue it is time they, and others, gave something back. If every single one of those 200,000 customers were to save the maximum amount of £138 a year, it would cost energy companies combined around 27 and a half million pounds. Sounds like a lot, Mr Speaker, until you realise that British Gas alone made 12 times that amount in profits last year. And then you consider that the money that these 200,000 people save will be spent on paying back debts to these energy companies.

I have spoken with Ofgem on this matter and in principle it agrees with me. It is, though, as usual, moving at a snail’s pace and I for one would like to see it move quicker on this simple solution to the debt issues of hundreds of thousands of people. Let’s work together to get a fairer deal for pre-paid meter customers.

In January 2010, Ofgem changed their policy, so that customers with £200 of debt or less were still able to switch their energy supplier if the new supplier were willing to take on the debt, and in most cases they were. It meant more people were able to take advantage of the great savings that can be made by switching supplier. This meant that people could pay off their arrears more easily, cutting short a spiral of mounting debt. £200 as a debt level worked then, but we could do more, and now.

Over one and a half million electricity and gas customers are currently in debt. Almost one million of these people are able to switch supplier to get better deals on their energy tariff. This proposal seeks to add 200,000 people to this figure, to ensure we have a fairer system in place.

The important bit is that these 200,000 people are among the most disadvantaged in our society and have chosen a pre-paid meter as a way of responsibly managing their weekly budget. Around a quarter of pre-paid meter customers are thought to be fuel poor and they are disproportionately represented in the social housing rented sector. We know that they are three times more likely to be in debt if their income is in the lowest quintile and so it is evident that these 200,000 are among those struggling to pay rising food costs, housing costs, and, of course, energy bills.

According to Which, 84% of people are worried about their energy bills, consumers spend one whole week a year worrying about their finances and people with less debt are often happier. So what this outdated regulation does, is add extra worry to people already concerned about job security and a double-dip recession. We see examples of people fiddling their meters to try and reduce their energy bills. The number of people doing this has has risen by 30% since 2007. I am not saying it is right that people are doing this – it’s not right and there is a price to be paid – but I am saying that I can understand why they are.

What I’m even more concerned about are the examples of people reducing their energy usage in order to save money for the debt payment instead. The number of pensioners dying from cold has nearly doubled in five years. Last winter Save the Children found that half of all families planned to turn the heating off for longer to keep their bills down, leading to problems such as children in cold homes being twice as likely to suffer from respiratory problems. I wouldn’t be surprised if some of these people are cutting down on their energy use so they have the money to pay off their debt. This is completely unacceptable, and for 200,000 people we can tackle this by giving them the freedom to make their debt more manageable through switching to a cheaper tariff or company.

These people are so badly affected by this debt and, Mr. Speaker, what is sad is that it is so easy for them to get into this position. For example, they may not have been identified by energy companies as a vulnerable customer and so are placed onto a prepaid meter after wracking up hundreds of pounds of debt while struggling to pay astronomical energy bills on a credit meter. Energy companies need to take responsibility for these confusions and mistakes and allow people to switch suppliers to help them pay off these debts.

To my more business-friendly opponents and colleagues, I could also outline the benefits of this proposal to the energy companies themselves. As it stands, 478 million pounds is owed to energy companies and so by making it easier for a large proportion of customers to pay it back, energy companies can recoup these losses. Uswitch estimates that prepaid meter customers could save £138 a year just by switching and so a £350 debt could be paid off in just over two years, without making any sacrifices. Both customers and energy companies would be better off. It’s a classic win-win situation.

These are the arguments for increasing the debt level. Now why should we increase it from £200 to £350? Firstly, the £100 limit was increased to £200 in 2010 to reflect the then higher energy bills and debt levels. Times have now changed. Energy bills have risen by 140% in eight years – 20% in the last two – , rising seven times faster than household income. And they keep on rising. SSE announced a price hike of 9% on the 22nd of August, despite a 7.7% rise in their after tax profits over the last year. And I am sure there are more price rises to follow as history will repeat itself: once one company raises its prices, the others are never far behind.

The average amount of debt is now around £350 – this is the average, not the maximum. And in the past two years we have seen severe cuts leading to a double-dip recession, making it even harder for people to pay their bills. Ofgem agrees this level is currently too low, but we need to speed up the process and get the level changed now.

Secondly, £200 is not what it used to be. Its value has decreased over 10% since this level was set. It wouldn’t buy an iPhone or a Blackberry or any other of the company phones energy company executives walk around with. It wouldn’t buy a return ticket to EDF’s global headquarters in Paris, E.ON’s global headquarters in Dusseldorf or Scottish Power’s global headquarters in Bilbao. And banks are prepared to lend out over a thousand times more than this. And yet, for an energy customer in debt, unable to switch their tariff, paying it back can be demanding and tiring. Paying back £350 can be even harder.

So if we are in agreement that we have the chance here to make a small change to an outdated regulation which will make a huge difference to hundreds of thousands of people. And that those hundreds of thousands of people are the people we need to help the most because they are so vulnerable to debt and fuel poverty. And that these customers are making responsible decisions to manage their budget and their debt. And that through being fairer, energy companies would in fact benefit with better rates of repayment. And the fact that £200 no longer reflects today’s world with rising bills and rising levels of debt. If we are in agreement with all these things, why then has this not been changed before?

The reason, of course, is that the Government and Ofgem are being too slow to respond the needs of energy customers. While energy bills have risen 20% and the average level of debt has risen to £350, Ofgem has not changed this level accordingly. It’s the same story every time, with Ofgem taking far too long to respond and the Government either having no incentive to help or simply not caring. I have taken the lead, with help from my supporters and colleagues, on this issue this time, as all of us that work on energy issues have done at some point or another, but this should be a lesson to Ofgem. Their job is to look into these issues and ensure that customers have a fair deal. I started asking questions about this in the House back in January. If they hadn’t been sorting this out then, that was their cue. But I had to ask a second time. And even then, there was no indication that the level was going to rise. I have been working on this issue now for nine months and I have only in the last few weeks had some indication that something is going to change. It shouldn’t have had to come to this Ten Minute Rule Bill before we finally started to see progress.

I could have stopped at that point and left it to Ofgem, but the sad fact is, I do not feel I can leave them to get on with it quickly. I am introducing this Bill to ensure that this level is changed before the winter. Before the cold weather sets in. I want those people struggling to pay their debt to be able to switch now so they can be given the chance to manage it and start on a better road to repayment. By the time winter comes, I do not want to hear about pensioners or families turning off their heating because they have too much debt on their meter.

As they say, with great power comes great responsibility. The Big Six have an enormous amount of power, so let’s start seeing their responsibility. So far, in all aspects of looking after their customers, they have been found wanting. They need to start prioritising their more vulnerable customers over their shareholders. I believe that raising the level of debt at which pre-paid meter customers can switch supplier is the first step in the right direction.

I have written to all the Big Six companies on their management of vulnerable customers and I call on the Government and Ofgem to do their bit and protect those who need it most.

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I secured an  Adjournment Debate on the Future of Shipbuilding, following recent announcement by the Coalition Government and fears of the local trade unions. It took place just before 10pm and expect not many people were tuned in to watch it, however, I’ve published the transcript of the debate below and for those who could not watch at the time here it is below:

19 Mar 2012 : Column 615

Shipbuilding

Motion made, and Question proposed, That this House do now adjourn.—(Mr Dunne.)

9.59 pm

John Robertson (Glasgow North West) (Lab): My speech tonight might be about shipbuilding, but it is fundamentally about commitment—to a tradition, to an industry and to the people who rely on it. I am glad to have secured this debate and hope to catch the Chancellor’s ear when he makes his future plans. I hope it is not too late, but I doubt it.

I must begin by mentioning how disappointed I was at last month’s decision to award a £452 million contract for support tankers to the South Korean ship company, Daewoo, at the expense of the UK sector. Not only was this sneaked out in a written statement, but a Westminster journalist reported that the Under-Secretary of State for Defence, the hon. Member for Mid Worcestershire (Peter Luff) said, “It’s okay, we’ve got away with it. It’s only on the BBC website”. I hope that the Minister will put the record straight today about these reported comments and about why the decision was made.

The four military afloat reach and sustainability—MARS—tankers, from which military helicopters will be able operate, are due to enter service from 2016. Owing to the timing and nature of the contract, it is especially tough on the UK sector. For example, there will be gaps in order books after the carriers and Type 45 destroyers are finished. Placing orders for those four ships in UK yards was essential to retaining those skills and capabilities in the UK. I remind the Minister that retaining that capability is also a strategic issue, so the Ministry of Defence is risking UK defence capability by placing this order in South Korea, as well as undermining the UK shipbuilding industry.

There have been suggestions in the past that South Korea has won orders at prices below production cost, and the EU has reported South Korea to the World Trade Organisation for its behaviour.

Speaking as a local MP, I would say that given that there are at least three years before the steel work on the carriers being built in the shipyards in my constituency and that of my hon. Friend the Member for Glasgow South West (Mr Davidson)is finished, these contracts mean that there would have been enough time to find work to keep other highly skilled workers busy until the Type 26 frigates came along at these shipyards. Instead, however, as a result of losing out on this contract, the shortfall will lead to the loss of 1,000 jobs. Given that unemployment in my constituency is up 66% since February 2008 and in Glasgow city by 80% since summer 2007, we can see that this is of major concern not only to me but to the people of the city of Glasgow. That will be mirrored in other areas of the country.

What really annoys me, however, is that these four MARS tankers for the Royal Navy were deemed to be “warlike” ships. As a result, under the previous Government’s procurement rules, they would have been built in the UK. I secured that commitment from the previous Government in 2003 at a meeting of the Scottish Affairs Select Committee, when they guaranteed that all “grey ships” or “warlike ships” would be built in the UK.

19 Mar 2012 : Column 616

My local GMB shipbuilders’ trade union certainly considers these tankers for the Royal Navy to be “warlike”, so like the Type 45 destroyers, the aircraft carriers and the future surface combatant ships, the Type 26 frigates, they should be built in the UK too. The reason is that they could be put into a war zone to refuel warships and to provide support for amphibious and land forces close to the shore. They need to be equipped with proper defences to protect the Royal Navy personnel on board, the helicopters that operate from them and, of course, the ships themselves—let us not forget them and the men in them. For that reason alone they should be built in the UK.

I fear, however, that the commitment that I secured from the previous Government is being broken and that the current Government are sending out signals that they will continue to break it. In fact, I believe that it is the Government’s policy to break it. This fear is supported by the equipment, support and technology Green Paper published on December 2010. It stated that the Government intended to buy more defence equipment off the shelf. As defence companies in the UK cannot afford the costs or accept the risks of developing major pieces of defence equipment without Government support, the clear implication of the Green Paper is that the Government mean to buy more equipment from foreign suppliers. Moreover, there is no mention of arrangements for licensed production, suggesting that the Ministry of Defence envisages buying more from the company’s own production line—another potential blow for UK manufacturing.

At the end of August 2011, the Government announced an order of 14 Chinook helicopters from Boeing, at a cost of £1 billion, which was fully in line with the approach I have outlined. At the beginning of October, AgustaWestland announced that it would make 375 staff redundant, owing to a shortage of work. That means that the Government are setting a dangerous precedent, which may have changed the commitment that I received from the previous Government on “grey ships”. With fewer than 10,000 highly skilled workers in the shipbuilding industry, any further loss of commitment to support the yards will result in the total collapse of UK shipbuilding and the loss of a highly skilled and motivated work force. Investment over the last few years has created a fantastic opportunity for UK shipbuilding to be recognised as it was a number of years ago—highly respected for quality, efficiency and cost-effectiveness. Many navies in the world are looking at our Type 45 destroyers with envy. They are without doubt the best ships of their class and type anywhere in the world.

The Government say that no UK yard made a bid for the MARS ships. However, I am the chair of the all-party shipbuilding and ship repair group, and a meeting was held last week. I have approached companies that should have bid, but did not do so, for which there were two good reasons. First, they were discouraged from doing so; and secondly, the decision had already been made on cost. Will the Minister comment on that, verify whether those are the facts, and if so, say what he will do to rectify the situation?

Mr Russell Brown (Dumfries and Galloway) (Lab): In view of my hon. Friend’s discussions with the all-party group, will he tell the House why those companies appear to have been discouraged?

19 Mar 2012 : Column 617

John Robertson: My hon. Friend will appreciate that the companies do not want to be named, for obvious reasons—their orders might be looked at in future—but the fact of the matter is that they seem to have been pretty well warned off, being told that it would be a waste of time, energy and money for them to tender for the ships. I find that despicable to say the least, and it is also a slight on our great work force, who work in the shipyards in my constituency and many others.

The previous Labour Government deserve to be congratulated on saving shipbuilding on the Clyde, as the Conservative Government from whom they took over did their best to ensure that those yards closed. The present carrier project, initiated by the last Government, is not only boosting the shipbuilding sector’s profile, but having a knock-on effect in the manufacturing sector as a whole. At a time of high unemployment, we should remember that the industry cannot afford to lose skilled workers, because as we have seen, once gone, they do not return to the industry. The industry needs skilled workers over the next 10 years. The young people entering the industry need to be trained, but it is not easy with people leaving the industry owing to lack of work or retirement. The shipbuilding work force are ageing and need new blood now. With youth unemployment at an all-time high—I might add that it is above the national average in my constituency—what better time than this to employ more young people? I congratulate BAE Systems in my constituency on its apprenticeship policy and on doing a great job to keep apprenticeships going in the last 10 years, but let us face it: the industry on the Clyde can ill afford any redundancies.

All this raises the question of where the ships should be built. We could, of course, build them abroad, as the Government appear to want to do. After all, it might work out cheaper to do so. However, we are not talking about a simple commercial ship that can be built more cheaply in a low-wage economy; in this case, we are talking about complex, highly integrated systems that happen to be housed in ships. We have the necessary skills here in the UK, and we cannot run the risk of losing crucial shipbuilding skills to other countries, let alone the cost of unemployment. Ultimately, the Government could find that they have nowhere at home to turn to for their systems requirements, if they continue to act as they currently are: penny wise but pound foolish.

The Minister will be aware of a recent report by the Royal United Services Institute which looked into defence procurement. The report found that the tax revenue implications of a given choice are frequently overlooked. Given that the Government, including the Ministry of Defence, are committed to reducing the budget deficit—a function of spending and revenue—this issue is highly pertinent. Using an actual contract and an explicit accounting method, the RUSI report found that the tax revenues are significant; they can yield to the Exchequer over a third of the value of the contract.

The same study found that the Government could get back more than 28% in income tax and national insurance payments alone by buying British in defence procurement. That figure is of obvious procurement policy significance at a time when there is such concern over the Government’s budget deficit, and this is something that the Chancellor should consider this week. The thousands of people in the shipbuilding industry could not care less about the

19 Mar 2012 : Column 618

50p tax rate; they just want a job that allows them to be able to pay tax. The report also suggested that if the UK were to spend a third of its defence budget on off-the-shelf foreign systems, as outlined in the Green Paper on equipment, support and technology, the Treasury would lose about £1 billion in revenue. That could have a negative effect on Government revenues and thus on the public sector deficit. Will the Minister tell us whether the Government have considered the RUSI report?

There is also a human aspect to all this that we miss in the faceless statistics and figures that are quoted. How can families in my constituency, and constituencies like it, plan for their own future when they could see their jobs go? How can we expect them to cope with such insecurity, especially when they are working in an industry of national importance? We are talking about generations of families who have worked in the industry, and about the traditions that go along with that. If the Government cut first and think later, it is those people and many others like them who will ultimately pick up the tab. So I call on the Minister and the Government to honour the commitment of the previous Government to the proud people in the shipbuilding industry of this country, and to ensure that all “grey ships” continue to be made in Britain.

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I took part in the Energy Prices Debate that the Labour party called for today, sadly it was quite a popular debate and I couldn’t give all my speech by this is a section of what I planned to say. It took place just after 4pm. I hope anyone tuning in was able to see some of the debate. I’ve published the transcript of the debate below for those who could not watch:

11 Jan 2012 : Column 271

5.56 pm

John Robertson (Glasgow North West) (Lab): I shall try to talk to the subject that we are here to discuss, unlike the hon. Member for Elmet and Rothwell (Alec Shelbrooke).

Last year, the average household saw energy costs rise by about £300 and Ofgem announced last October that the profit for energy companies had risen to £125 per customer per year, from £15 in June. My contention is not that the cost of energy is rising, but that the big six do not have a great track record of passing on wholesale decreases as quickly as increases.

Today’s wholesale energy prices are lower than they were a few years ago—and lower than they were only a few months ago. According to Bloomberg, the wholesale price for gas in autumn 2008 hit over 70p a therm. If we compare that with 59p per therm last October, we see that wholesale gas prices have actually dropped 15% since then. Similarly, prices in the wholesale electricity market reached £120 per megawatt-hour in autumn 2008. Today, they are just over £50 per megawatt-hour—less than half the price back then. But gas prices have dropped by only 15% and electricity prices by only 11% since last May’s peak. According to Bloomberg, in December natural gas futures declined by 30% compared with 2011. Today, energy companies can buy their gas for 53p per therm, some 9% cheaper than even last October.

The reason for this is sadly apparent. European demand is going down as the continent is moving towards a downturn and productivity is declining. This may be why EDF announced today a 5% cut, but—as my right hon. Friend the Member for Don Valley (Caroline Flint) pointed out—the company raised its gas prices last year by 15.4% while future gas derivative prices were falling, and while current market prices are down on previous years.

As a result, there is great suspicion among many, including Ofgem, that the big six have not been passing on wholesale market price reductions, not only last year but this year. These are clear acts of anti-competiveness in themselves, especially towards smaller energy companies, let alone customers and small businesses. For example, section 2 of the Competition Act 1998 prohibits the abuse of a dominant position in a market by one or more undertakings which may affect trade within the UK. I will quote competition law guidelines again as it seems that the Secretary of State did not hear me the last time I did so. They state:

“Conduct may be abusive when, through the effects of conduct on the competitive process, it adversely affects consumers directly (for example, through the prices charged) or indirectly (for example, conduct which reduces the intensity of existing competition or potential competition). A dominant undertaking is under a special responsibility not to allow its conduct to impair undistorted competition.”

I strongly suspect that one reason behind the price rises is probably that the companies have grossly failed to stockpile their energy reserves to hedge adequately against future prices. That could explain why, when future prices have fallen by almost a third, the companies are not passing on the reduction. There may be numerous reasons for that—one reason is probably ineptitude—but I feel that the main answer lies more in the lack of any incentive to pass on substantial price rises.

David Mowat: Will the hon. Gentleman give way?

11 Jan 2012 : Column 272

John Robertson: I will not give way. There are a lot of people wanting to speak.

My constituents are grossly disadvantaged. The Secretary of State talked about going on the internet, but the low internet uptake in Glasgow—we have one of the lowest uptakes—will not allow that to happen for my constituents. However, I was pleased to hear that he has taken on board the point about severe housing, which is what we have. Efficiency savings cannot be made in concrete housing blocks. In fact, all my constituents seem to do is pay to heat up the concrete blocks in the winter and cool them down in the summer. I therefore look forward to hearing more from the Minister. I hope he will look at the prices, go back to the companies, give Ofgem the teeth that it needs and ensure that the fines that should be imposed on the companies in question are indeed imposed.

6.1 pm

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I and Labour’s Shadow Chancellor Ed Balls launched Labour’s Plan for Growth today.

This is a really worrying time for families; struggling with higher food prices and gas bills and worried about their jobs and their children’s futures.

That’s why Labour has set out a clear five-point plan for jobs, to help struggling families and support small businesses.

But the Tory-led Government refuses to listen to people’s concerns. Help us make them understand how tough things are for families, pensioners and businesses. Join our campaign at Labour.org.uk/plan and take action now.

Labour’s five-point plan for jobs and growth:

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You may have seen the Glasgow Evening Times covered the  Adjournment Debate I managed to secure an on Fuel Poverty.

I gave a speech in the Chamber of the Houses of Parliament, with the Tory Minister in the Department for Energy and Climate Change, Gregory Barker MP, answering. It took place just after 7pm. I hope anyone tuning in was able to see some of the debate. I’ve published the transcript of the debate below for those who could not watch:

Fuel Poverty

Motion made, and Question proposed, That this House do now adjourn.—(Mr Syms.)

7.4 pm

John Robertson (Glasgow North West) (Lab): I am delighted to have secured this debate. I look forward to hearing the Minister’s comments on the wider issues that I shall raise.

First, let me set out the current state of fuel poverty in Scotland. Fuel poverty afflicts a cross-section of society. It is determined by the percentage of one’s income that is spent on energy bills: to be exact, when a household spends more than 10% per cent of its income on gas and electricity, it is deemed to be in fuel poverty. One third of Scottish households live in fuel poverty. The Scottish Government believe that, after recent energy price rises more than 900,000 Scottish households will be living in fuel poverty. I fear that we are on the edge of a fuel poverty crisis and that in the coming years that figure will reach the 1 million mark in Scotland alone.

Colder winters in the rest of the UK have not stopped the Scottish National party Administration in Edinburgh cutting the fuel poverty budget by a third, and aided by what the Tory-led Government are doing, the poor and needy are set to suffer even more in the years to come. In constituencies such as mine, as well as others, fuel poverty relates predominantly, although not exclusively, to pensioner poverty; however, many who are not pensioners —people with severe disabilities, single parents and the unemployed, to name but a few—are also in fuel poverty.

My home city of Glasgow is fairly youthful compared with other cities in Scotland, but there is a large elderly population. Among those of pensionable age, there are large pockets of severe pensioner poverty, to which my constituency is sadly not an exception and from which it suffers more than most. When I was elected to Parliament in November 2000, 80% of single pensioner households in Scotland lived on an annual income of £15,000 or less. Today that figure is 60%—admittedly less than in 2000, but still unacceptable. With 13,500 pensioner households in my constituency alone—one of the highest concentrations of pensioners in Europe—hon. Members will understand why this issue is of grave importance to me as a local MP and why I am raising it today. About 6,500 people are claiming pension credit in my constituency, which is consistently ranked 7th out of all Scottish parliamentary constituencies in that respect. My constituency has the highest proportion of single women pensioners in the entire country, and according to official figures their number will continue to rise, with over two thirds of women over 85 in Scotland projected to live alone by 2033. Glasgow North West is fast becoming—sadly for me—like the name of a recent film, “No Country for Old Men”.

Because 65% of single pensioner households and about half of smaller pensioner households in Scotland were classified as fuel poor in 2009, according to official figures, making them more likely than any other type of household to be experiencing fuel poverty, my constituency casework, as hon. Members can imagine, is dominated by the issue—and rightly so. According to Scottish Government figures, almost a quarter of single pensioner households and a fifth of smaller pensioner households in Scotland are deemed to be in extreme fuel poverty, whereby they spend more than 20% of their disposable

14 Sep 2011 : Column 1148

income on heating their home. In addition, 8% of pensioners in Scotland live in absolute poverty and one in 10 over-65s are classed as “materially deprived”. Although Scotland is one of the worst affected areas in the UK, many inner-city and rural areas elsewhere have the same severe fuel poverty status. Hon. Members will understand why I believe we are on the verge of a fuel poverty crisis.

What causes fuel poverty? To put it simply, it has three root causes: low incomes, poor housing and high energy prices. Eradicating fuel poverty will involve tackling these three problems. Improving the quality of housing stock is of paramount importance. Although big strides were taken under the previous Government through the decent homes standard, the Warm Front programme and the energy efficiency commitment to improve energy efficiency and install cost-effective heating systems in homes, more has to be done. In Scotland between 2008 and 2010, new housing supply decreased by 16%, house building decreased by 17% and public sector housing provision fell by 1%. I would like to blame the current Government for those things, but unfortunately they were not in power. In 2009, according to Scottish Government figures, new-build housing completions were at their lowest level since 1982, meaning that fewer modern, properly insulated homes are being built. In addition, people living in private sector housing in Scotland are twice as likely as those in social housing to experience extreme fuel poverty. More than a third of pensioners live in housing that is poorly insulated or reliant on expensive heating.

Housing is a devolved matter, however. In this speech, I will focus mainly on areas where the Government potentially have a direct influence. Although I will use Scotland and my constituency as examples, colleagues tell me that the situation is just as bad in many other areas of the UK. I have had to apologise to a number of Members who asked to intervene, because I would have needed hours of extra time to have a proper debate and allow them the time that they so richly deserve.

In incomes policy, I hope that the Chancellor and the Government will focus more on the vital role of the tax and benefit system in raising the incomes of the needy. I am sure that the Minister knows that benefit entitlement checks can help to ensure that vulnerable customers are getting their fair share of the millions of pounds of unclaimed benefits. Sadly, the many inches of newsprint about the £1.5 billion-worth of benefit fraud outweigh the coverage given to unclaimed benefits. Do not get me wrong, fraud of any kind should be sought out and punished as it is the poorest who always suffer as a result, but little recognition has been given to the fact that up to £5 billion of means-tested benefits that should go to older people in the United Kingdom are unclaimed each year. I wish that the Government would apply the same gusto to chasing up the pensioners who need that money as they give to those who defraud the welfare system.

I could not discuss fuel poverty without mentioning winter fuel payments. I know that the Conservatives were latecomers to supporting winter fuel payments. I remember the Foreign Secretary, when he was leader of his party, saying that such payments were a gimmick, and I am glad that the Conservatives have now publicly declared their support for them. However, the Chancellor’s decision to cut winter fuel payments to the poorest

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pensioners by £100 seems a cynical and short-sighted decision in the current economic climate, with incomes falling and energy prices rising.

Anas Sarwar (Glasgow Central) (Lab): I congratulate my hon. Friend on securing this important debate. I am sure that he was in the Chamber for Scotland questions earlier today, where the figures for Glasgow were given: 100,000 pensioners face cuts to their winter fuel allowance this year, totalling £4 million, at the same time as their energy bills are rising by up to 20%. Does he share my concern that, sadly, too many pensioners in the UK will have to choose between heating their home and putting food on the table?

John Robertson: My hon. Friend and neighbour makes a very good point. I know that the Minister will say that the Government are not cutting winter fuel payments, but maintaining the level that the Labour party set in government. The fact is that each time the Labour party increased the payments because of the weather, it consolidated them the next year. Had Labour won the election, we would have expected the Government to consolidate the money given last time. That is why I feel that this Government should consolidate that money, particularly at a time when energy prices are rising and when poor people—particularly the elderly—who need the money the most will suffer the most. It is a fact that those who receive the winter fuel allowance will receive less this year than last year. The Labour Government did not do that; the Conservative Government did. They had their opportunity to consolidate the payments, but instead used them as another attack on the poor.

Energy is a major cost to everybody, but especially to people who fall into the trap of fuel poverty. Energy companies constantly remind us of increases in the wholesale costs of oil and gas and increased demand, and add that they are required to invest in modernising their industry to keep climate change commitments; they remind us less often of the Government subsidies that they get to invest in renewables, and still less often of the huge profits that they make, and of the huge profits that they made in the days of cheap oil and gas, none of which have ever been repaid to customers. After all, the profits of the big six energy companies have gone up almost a third since 2008, and payouts to shareholders increased across the board, up an incredible sixfold since 1999 in the case of Centrica, which owns British Gas.

I support renewable energy, but the delivery of clean energy has not matched the price paid by the Government. It is time that we saw a return for our taxpayers’ money. The production—or lack of it—of clean energy is being used to rip off the British people, thus adding to the costs of those who can least afford them. I can compare the scale on which private energy companies have managed to privatise profits but nationalise losses only with the recent bank crisis. The energy customer in the UK—if we were totally honest, we could just call them the British taxpayer, because they are one and the same—is picking up the tab for the excesses, irresponsibility, recklessness and lack of long-term vision of the big six energy companies. Those companies—the energy barons—have managed to turn us into their 21st century serfs. The cheek of some of them knows no bounds. As I pointed out in June, ScottishPower is milking the British consumer: having recently increased energy bills in this

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country to record levels, it lent £800 million to its foreign sister company, which is based in the US, to keep US energy prices down. That money could have been invested in the UK, or it could have helped to keep UK prices down.

That was not even the first time that that happened. Back in 2008, ScottishPower lent £750 million directly to its Spanish parent, Iberdrola. One can assume only that that was to the benefit of Spanish energy customers. That is not the truly sickening aspect of this problem. This is the first year since 1990 when Iberdrola’s US gas and electricity supply companies have raised their customers’ bills. They have seen increases of 2% and 8%, but the British customer is getting hit by near-20% increases this year, and has been hit by 40% increases since 2007. That same supplier is lending money to the American company.

I believe that that is why the energy companies do not want to be fully transparent. Although extra wholesale market costs increase prices, with full transparency we might discover that market costs are not increasing prices to the extent that the price hikes would suggest. According to Bloomberg, the wholesale price for gas in autumn 2008 went above 70p per therm, compared with 59p per therm today. That shows that wholesale gas prices have actually dropped 15%. Similarly, prices in the wholesale electricity market reached £120 per MWh in autumn 2008; today, they are £51.20 per MWh—less than half the price back then.

This is not a case of energy companies being backed into a corner by market forces; it is an act of collective incompetence and ineptitude, leading to a cartel of companies backing consumers into a corner by raising prices in tandem. I therefore suggest that we break up the big six’s monopoly and allow other providers to enter the energy market. I would like to see a major co-operative energy supplier and/or a big supermarket chain, such as Tesco, giving the big six some competition.

Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): Does my hon. Friend agree not only that it would be useful if other players entered the market, but that it is important that people can understand the various tariffs? Many people on the lowest incomes find it extremely difficult to work out what is best for them. The energy companies could do more. I hope that new players would operate differently.

John Robertson: My hon. Friend makes a good point, and believe me, if I had more time I would go into it. I certainly did so in the Energy and Climate Change Committee, when we talked about tariffs and the fact that there are more than 400 of them. It is a disgrace. How is anyone supposed to understand them all?

It is odd that in 2011, I, a Labour MP, am calling upon a Tory Government to create greater competition in the marketplace, but with more companies and greater competition, I believe that costs would fall, employment would be maintained or increased and the same profits would lead to greater efficiency in the old and new companies. If we do nothing, however, just like the big banks, which were too big to fail, so too, owing to the cartel-like nature of our energy market, will these huge companies feel that there is no sanction for reckless price rises, and only disaster and a big bill will await the taxpayer. I strongly suspect that the true reason for the

14 Sep 2011 : Column 1151

price rises is the gross failure of the companies to stockpile their energy reserves to hedge adequately against future price rises. Their error is our loss. There might be numerous reasons for the current situation, including ineptitude, but although that is likely, I feel that the answer lies more in the fact that neither the Government nor Ofgem have given them any incentive.

I realise that it is not all the energy companies’ fault. I believe that the regulator, Ofgem, has not helped matters by being idle. I recently publicised the £200,000-a-year salary of Lord Mogg, its chairman. I hope that the Government, who claim to want to crack down on quangos, will have an urgent word with that gentleman, who is paid more than the Prime Minister for a three-day week. He is on footballer-like wages and needs to be reminded to justify his salary. His organisation should be acting to protect hard-pressed British consumers, who on his watch are not getting a fair deal.

I know that I have quoted many facts and figures—I hope that I have not bored too many people, including the Minister—but they are not nameless and faceless to me; they represent individuals whom I have known for many years, not just as their MP, but as their neighbour and friend. That is why I have such passion for this issue. In the nature of cross-party good will, I have a few questions that I would be grateful if the Minister answered.

What does the Minister believe can be done to encourage uptake of means-tested benefits among those in our elderly population who can rightly claim them? Will he consider enforcing transparency upon the big six energy companies or asking the Competition Commission to hold an inquiry into the energy market? What does the Minister think of my suggestion of breaking up the energy companies to stop them acting like a cartel and to allow other providers into the market? What does he believe can be done to tackle fuel poverty, and what measures does he propose to alleviate its harshness this winter? What plans are in place to increase awareness among pensioners and others of the help provided this winter? Would he be interested in a cross-party energy summit, held in Westminster, bringing together energy companies and politicians? Will he ask the Chancellor to revisit the winter fuel allowance and consolidate the £100 reduction?

I thank the many groups, non-governmental organisations and colleagues who have contacted me with help and advice. To mention them all would have taken hours. Let us have the debate we need. I look forward to the Minister’s reply.

7.24 pm

The Minister of State, Department of Energy and Climate Change (Gregory Barker): I congratulate the hon. Member for Glasgow North West (John Robertson) on his success in securing an Adjournment debate, particularly on the important subject of fuel poverty. He spoke at length and with great passion. Unfortunately, he has left me about nine minutes to respond to the many important points that he raised. I shall have to make a slightly shorter speech than I had intended, but if I do not cover all the salient points, I will write to the hon. Gentleman after the debate.

14 Sep 2011 : Column 1152

At a time when fuel bills are rising and we are approaching the cold months of the year, it is right to start by reaffirming the coalition’s absolute commitment to helping those households in or at risk of fuel poverty. We recognise the need to help more of the most vulnerable keep their homes warm at an affordable cost. However, the state of fuel poverty in this country, which is totally unacceptable, has not occurred overnight. Fuel poverty has been rising year on year for much of the past decade, during which the hon. Gentleman’s party was in government. Despite legislation designed to reverse the trend, between 2005 and 2009 the number of fuel-poor households across the UK more than doubled from 2.5 million to 5.5 million.

In England, we have seen the number rise from 1.2 million in 2004 to 4 million in 2009 and, of these, 3.2 million were vulnerable, so the elderly, families with young children and the long-term sick and disabled are among those most affected by fuel poverty. Of Scotland’s 2.3 million households, in 2009 there were 770,000 households in fuel poverty, compared to 543,000 in 2005. This means that, as the hon. Gentleman said, a third of households in Scotland were in fuel poverty in 2009. In Glasgow city, which encompasses his constituency, there were 69,000 households in fuel poverty in 2009.

If we are to reverse this trend and the iniquitous and ever-increasing number of those in fuel poverty, it is clear that something big has to change. I do not doubt that the previous Government were well intentioned and had hoped to be more effective than they were, but the numbers speak for themselves. The attempts of the previous Administration were singularly unsuccessful for a number of reasons, some of which were within their control and some not. We need to completely rethink, redesign and re-engineer our policies to meet the challenge of turning around this juggernaut.

Before leaping forward with new answers, we must first make sure that we are asking ourselves the right questions. That is why we invited Professor John Hills to undertake an independent review of the fuel poverty target and definition. He has been asked to look at fuel poverty from first principles—what causes it, its effects and how best to measure it. The review is looking to ensure that in these difficult times available resources are focused where they will be most effective in tackling fuel poverty, targeting support to those who need it the most. As I said, this is an independent review so I cannot predict what will be said, but I am aware that Professor Hills is engaging with a broad range of stakeholders and we look forward to receiving his interim findings this autumn.

In the meantime, the coalition Government need to act. We have introduced the warm home discount, a scheme that spans Great Britain. This is the first year of the scheme and we will assist around 2 million households. The majority of these will be low-income pensioner households in receipt of pension credit guarantee credit only. We expect to find more than 600,000 of them and provide them with a £120 rebate on their bill. Most of these will receive a rebate without having to claim, as a result of the Department for Work and Pensions and the energy suppliers sharing their data to help to find these customers. The rebate will be a major benefit to these vulnerable people who may struggle to claim. This is part of the answer to the hon. Gentleman’s question about how we start identifying such people and encouraging

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them to take up the benefits to which they are entitled. The discount will increase across the four years of the scheme, rising to £140 by the fourth year. To ensure that those off the gas grid can also benefit from the scheme, the discount will be applied to household electricity bills. Other groups, such as low-income families and those with long-term illnesses or disabilities, may also receive the discount.

Tackling fuel poverty will be a huge challenge. A key part of the solution is undoubtedly to address the thermal efficiency of our housing stock. Britain has some of the oldest building stock in Europe. As consumers, we pay a high price for inefficient, leaky buildings. It is widely known that it costs more on average to heat a home in southern England than it does to heat a home in Norway. That is obviously not because it is colder here, but because our buildings are significantly leakier and draughtier. Both the carbon emissions reduction target and Warm Front continue, installing measures in the homes of some of those most at risk from cold. However, the coalition has extended the CERT programme to 2012, which will bridge the gap before the introduction of the real game changer in autumn 2012, the green deal.

Warm Front has helped more than 2.2 million households in England with a range of heating measures. However, we recognised early on that Warm Front was a totally inadequate response to the scale of fuel poverty. It has helped hundreds of thousands of people when the challenge is to help millions. If we had to rely on Warm Front alone, at the previous high rate of spending under the last Labour Government it would take more than 80 years to get close to achieving our aim. The Government’s green deal, which we debated this afternoon, will be the flagship programme for addressing energy efficiency. We hope that it will be the game changer that finally deploys resources from the private sector to achieve the ambitious scale of change and investment that we need.

The domestic green deal is an opportunity for householders to improve the energy efficiency of their homes and will come at no up-front cost. It will help to protect people against price rises through greater energy efficiency, saving them money now, but also protecting

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them against future rises. In developing the green deal and the energy company obligation—the subsidy that will target hard-to-heat homes and the fuel-poor—we are removing the barriers to take-up, raising awareness and showcasing the benefits to make energy efficiency a no-brainer. We are also working closely with the devolved Administrations, particularly in Scotland, to ensure that the green deal can be rolled out right across the country.

The hon. Gentleman spoke at length about the big six. Let me remind him that after privatisation in the early 1990s there were dozens of energy companies. I agree with him that the market was surely much healthier then. I have great sympathy for his wish to see far greater competition in the energy sector, although the consolidation of the energy companies into the mighty big six occurred primarily at the end of the ’90s, under the last Labour Government. However, we will not overcome the problem by simply squeezing or over-regulating them evermore. Regulation is important, but we must be careful not to create new barriers to entry. Like him, I want to see new players entering the market and more disruptive technologies. We want to see a more decentralised energy system challenging the monopoly of the old-style, old-fashioned provider. We want to see more energy service companies that make their money not from selling energy, but from helping people to save energy by using less to keep their houses warm.

The Government are taking a range of measures, including our exciting proposals for electricity market reform, to create new incentives to bring new players into the market, because ultimately it is competition—new entrants, new players, new investment—that will create the choice and best value for consumers that the hon. Gentleman and I both want. Indeed, he is absolutely right about that and I am glad that we have found that point of agreement. I am also glad that we have had this opportunity to debate the issue. He is absolutely right—

7.34 pm

House adjourned without Question put (Standing Order No. 9(7)).

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On Thursday Parliament votes on proposals to treble tuition fees for students – making them the highest of any publicuniversity system in the industrialised world. As I write this I do not know the outcome of that vote, but I will vote against the Government because their plans are not necessary, not fair, and not good for higher education. Whatever the outcome you can be sure that I and other Labour MPs will continue to campaign to oppose them.

Such high fees are not necessary. They are going up so much because the Government has chosen to cut funding for university teaching by 80% – when other public services are being cut much less. Labour would not make such cuts to Higher Education teaching grants.

The government’s decision to shift the burden of funding higher education onto students is driven by ideology and not economic necessity. The need to get the deficit down does not justify a long term change in higher education funding which will be bad for universities and not save any public money.

These high fees are not fair because graduates will now have to pay much more over a longer period with middle income earners hit hardest. Graduates will be forced to pay the whole cost of most degrees (to replace the cut in funding), instead of sharing the costs with the state. As a result, graduates will pay much more overall, and pay back for up to 30 years.

This rise in fees is also bad for Higher Education. England’s world class university system has been built on public investment and trust in the professional academic leadership of universities. If the government’s proposals go through, this will be replaced by a market in higher education in which many students will be put off university and forced to choose the cheapest course rather than the one which is best for them.

Labour believes the cost of higher education should be shared between the public and graduates. That’s why we believe in moving towards a graduate tax, where the highest earning graduates would make a fairer contribution. This is the only fair and sustainable way to fund higher education going forward.

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