Ed Davey
MP for Kingston and Surbiton · Liberal Democrat · United Kingdom
“I associate myself with the Prime Minister’s opening remarks, not least about the 25th anniversary of the horrific terror attacks of 9/11. I welcome the Government finally banning imports from illegal Israeli settlements, something Keir Starmer should have done a long time ago.”
“I thank the Prime Minister for that answer. Britain should be the safest country in the world to have a baby. We will keep raising this issue until it is the safest.”
“No mother should have to give birth in such circumstances. Does the Prime Minister agree that Musgrove Park cannot wait until 2033 for work to start on a new maternity unit? Will he offer a meeting to local MPs, so we can move it forward? And will he make fixing the maternity scandal across our country a top priority of his Government?”
“I hope at that summit the Prime Minister will negotiate a good deal for our country, our economy and our defence, and that means rejoining the single market. North Devon’s maternity unit has been closed for three weeks due to staff shortages, so women now have to travel for up to two hours to give birth.”
“The Prime Minister said yesterday that Brexit ushered in “a decade of low growth and stalled regeneration.” —[ Official Report , 1 September 2026; Vol. 790, c. 27.] He is right. Our economy is stuck in this mess thanks to the Conservatives—and the leader of Reform UK—and their terrible Brexit deal.”
“There are so many more problems in our political system: too much power in the hands of social media barons who interfere in our politics and crypto billionaires who use donations to buy influence; and too little power in the hands of our people.”
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“I do not know about the proposal relating to the River Dee in north Wales. Coal gasification is one of the many technologies that we look at in the Department. It is not one at the forefront of our thinking at the moment, but if the right hon. Gentleman would care to write about the specific scheme he mentions, I should be pleased to receive a letter from him.”
“If Labour were to be elected at the next election, would it make the changes the right hon. Lady mentions ahead of the reporting of the investigation by the independent Competition and Markets Authority?”
“If the CMA suggests the right hon. Lady’s proposals are not the right ones and it proposes other ones, will she ignore the CMA and just do what she thinks best?”
“The right hon. Lady is making an interesting speech, and I will respond in detail to her proposal. Does she think that any energy company in the British market has done anything that would warrant its licence being revoked?”
“I am grateful to the right hon. Lady for giving way. She is explaining her policy and asking the House to say that this is needed because of things going wrong in the market and because energy companies keep treating their customers badly. I have some sympathy with that observation and shall make some comments about it. However, as she is asking for a new power, surely she has to give an example of where the power would have been used in the past. She is saying that the power is needed because companies are getting away with things at the moment and that the power would have been used in certain circumstances, but can she give us an example?”
“I recall an elderly constituent coming to my local surgery in 2003 having been appallingly treated and conned by a representative of one of today’s big six. So this is a serious matter and, despite efforts by the previous Government, this Government’s focus on this issue and the work of Ofgem, it is clear that there are still energy firms that are treating their customers unacceptably.”
“I thank the right hon. Member for Don Valley (Caroline Flint) for calling a debate on an important subject: how best can we protect energy consumers from unfair treatment by their suppliers? Although there are examples of good customer service—energy companies that are treating their customers properly—it is hardly controversial to say that there are far too many cases where energy firms have let their customers down badly—the mis-selling, the poor complaints handling, and the poor billing. This is not new; it has been going on for many years and can just take different forms. Right hon. and hon. Members who have served in this House for a few Parliaments will recall all the scandals of doorstep mis-selling.”
“That is a serious mistake, which the Opposition keep making. For many of the smaller suppliers now competing—”
“I will explain to the House that under current rules licences can be revoked, and I will deal with these issues. I am admitting that this a good debate to have, because there is a problem—nobody is suggesting otherwise. But, as always, the question is: what is the best way to deal with that problem? What is going to work? What is the best way to crack down on this to punish firms that get it wrong? In essence, we can use three tools: competition; regulation; and technology. The right hon. Member for Don Valley has focused on regulation, and I want to address her proposal in detail, for tough regulation certainly has a vital role to play in holding companies to account. However, I regret that her motion and her speech totally failed to mention competition and technology—those were not even mentioned once.”
“I am going to deal with the right hon. Lady’s proposal, as I have said. However, she failed to deal with one of the comments made by a Government Member about the importance of competition. Competition does drive good customer service, as I hope she will recognise. I wish she had done so in her intervention on me, but she did not.”
“I am acutely aware that competition has not always worked for the most vulnerable in society, such as elderly people who might not be internet savvy. During my time as Secretary of State, I have placed a focus on new business models and new ways of helping such people—from collective switching to developing, with the voluntary sector, citizens advice bureau, Age Concern and so on, new forms of advice with the big energy saving network. Ofgem is also increasingly focused on how we can ensure that energy markets better serve the fuel poor and the less well off.”
“Yes, we need to make the competition rule work more effectively, which is why we support the independent Competition and Markets Authority in the most profound investigation of British energy markets ever seen. It was telling to hear that the right hon. Lady does not intend to wait to hear the result of the Competition and Markets Authority investigation. She will prejudge the authority’s report. That is quite a revelation, which is worthy of more debate. We are not simply waiting for that report from the Competition and Markets Authority. We have already done so much to encourage new suppliers and to make switching easier, simpler and quicker. We believe that we must continue to sharpen the competition tool for consumers, so that when they are poorly treated, they can vote with their feet.”
“If we talk to the independents about their business model, we hear some of them say that higher quality customer service is their main competitive edge. The growth of competition since 2010 suggests that they are right and that competition has a key role to play here. From less than 1% of the market, the small suppliers now have more than 7% and it is still growing. Customers now have more choice than ever, with 25 suppliers competing for their custom. Small suppliers provide electricity to 2 million customers, and they have gained more than 1 million customers in the past 12 months. Clearly, customers are voting with their feet when they are not happy with the service they are getting.”
“I congratulate the hon. Gentleman on getting that question into this debate. I say gently to him that on CfD and state aid we have clearance, so presumably the Commission has examined that matter. I have not specifically asked it that question, but it has given us state-aid clearance. The way we have proceeded with the allocation proposals for CfD is to ensure that we get just that investor confidence, and the fact that we are seeing such interest and such investment is tantamount to showing that we have it right. Failing to focus on competition is a serious mistake by the Opposition, because many smaller suppliers competing against Labour’s big six are doing so not just on price but on the basis of better customer service.”
“No, I am not saying that. If the hon. Gentleman waits for a second, I will put a lot of emphasis on tough regulation, but there needs to be a balance. There needs to be competition as well, because it can often work more quickly and more effectively, and it really hits the firms that are losing customers. Some of the big six have lost tens of thousands—in some cases, hundreds of thousands—of customers because we have enabled competition. I accept that things are not perfect yet, which is why we are working so hard.”
“In the future, if an individual is found guilty of manipulating the energy market, they could go to prison.”
“Strong regulation has a vital role to play in protecting consumers. The previous Labour Government recognised that, and set up Ofgem. Indeed the Leader of the Opposition, when he was doing my job, reformed Ofgem to give it more powers to protect the consumer. He chose not to give it the power that the right hon. Lady wants, but we will leave that aside for the moment. This Government recognise the role regulation has to play for customers, which is why we have strengthened it. We have ensured that when an energy firm is fined and punished, the money does not just go to the Treasury. Customers who have been wronged are now properly compensated; we have put money in their pockets. We are even introducing criminal sanctions into the regulatory armoury.”
“When a Welsh MP gives a rugby analogy, one should be careful. However, I will address that point, because I have a lot of sympathy with what the hon. Gentleman is saying. I am grateful that he at least recognises that competition has a role to play. Technology also has a key role to play. The smart meter roll-out, for example, will be crucial in tackling some of the issues that consumers complain most about, especially inaccurate bills. Smart metering will help us to address even more problems faced by prepayment meter customers and it will enable 24-hour switching. So technology and competition are important in addressing these matters, and we need to have them on the table. Despite those differences, there is no disagreement between parties over the importance of the regulation tool.”
“The time spent preparing to use this nuclear option will be critical. Under the current situation, because of the ratcheting up, contingency arrangements could be put in place. If things are done more quickly and directly, as the right hon. Lady wants, there could be chaos. It would be bad for the staff, as there would be a significant loss of jobs. It would be bad for consumers, as they would have to be switched to another company or companies very quickly. That is not easy, not even in 30 days, without real difficulties and challenges. If it were a large firm that was being closed down, it is likely that only other large firms would be able to absorb that number of customers quickly. The result is that Labour's big six would become Labour's big five—genius!”
“I apologise, Madam Deputy Speaker. Her motion states quite clearly that it is focused on reforming an existing regulation—changing an existing power. Currently, Ofgem can remove a company’s licence. In other words, the regulator can now shut down a company. The regulator already has the power effectively to say to a company—its employees, customers, suppliers and shareholders—“What you have done is so bad that you can no longer trade.” It is a tough power, and rightly so. It is what we might call the “nuclear” option, because the consequences are severe for the customer as well as for the company. Let us imagine that the nuclear option is taken by the regulator. It does not matter whether we use the current carefully designed system, which I will describe later, or the more arbitrary system being proposed by the right hon. Lady.”
“Before the implementation of the powers in the Energy Act 2013, some redress schemes were on a voluntary basis and the money did not always go to the individual customers who were wronged. The real intention of the new powers is that money will go to the customers. There will be proper consumer redress. That did not happen before. Under us, it is now happening. I repeat what I was saying before the right hon. Lady intervened. This Government are passing rules that stipulate that people who manipulate energy markets could go to prison. No one can accuse this Government of being unwilling to use the regulatory tool in the toughest way possible on behalf of consumers. The right hon. Lady’s motion is focused not on regulation in general, where there is agreement, but on one new regulation. No, that is not quite true.”
“I am going to describe the current system. On the law, the right hon. Lady might want to look at the point where it says—this is where Ofgem may revoke a licence— “if the licensee fails…to comply with a final order”. I am going to explain that process.”
“Labour now wants to amend the existing power, so that the regulator can close down a company for—I quote from the motion— “repeated instances of the most serious and deliberate breaches of their licence conditions”. How does that differ from the existing situation? Well, at the moment Ofgem cannot explicitly close down a firm for persistent behaviour; that is true. It cannot go quickly or directly to the nuclear option, as the right hon. Lady wants. Ofgem would instead have to ratchet up its sanctions: first, higher fines, and regulatory orders requiring specific improvements in performance by specific dates—ever-tougher, and increasingly damaging for the firm.”
“It is quite right that the current rules limit the circumstances in which the nuclear option can be used, and the process that Ofgem would effectively have to go through before it can be invoked. Indeed, Parliament, under the previous Government, set the bar for the nuclear option quite high. The list of circumstances in which the power can be used includes a variety of things, from the failure of a company to comply with a final order from the regulator, to a company’s making false statements when applying for a licence, to a firm’s not paying a financial penalty. The right hon. Lady is proposing to lower the bar for the nuclear option.”
“The right hon. Lady should allow me to explain the current system, because I think she will find that a failure to comply with a final order can result, in extreme circumstances, in revocation. It is the process leading up to the issuing of the final order that she does not seem to understand, so let me deal with it. Under the right hon. Lady’s proposals, the nuclear option has considerable—potentially large—negative consequences for competition. Just think how the customers would feel. Would the confusion and hassle of a forced move make them feel any better? Other companies would need to take on those customers, and that means changing tariffs, with consumers possibly paying more. All those issues would need to be worked through at a chaotic moment.”
“For a huge energy company such as British Gas, that could equate to a whopping £1 billion —not a figure that any company, however large, can take lightly. That is what the law currently allows for, and these fines are being used, under this Government, far more than they were under the softies opposite.”
“Moreover, because the current Government wanted to ensure that it was not just the Treasury that benefited from enforcement action against energy firms that misbehaved, there is now money for consumer redress as well—since 2010, nearly £60 million has already been paid out directly to consumers, the people who have suffered. Nothing like that happened under Labour. So under us, as the fines on a persistently poorly performing firm went up and up, so could consumer redress; so could the consumer compensation. What is the maximum that could be levied? Well, if a firm continually failed to comply, the fines and redress could be increased up to 10% of a firm’s turnover, as the right hon. Lady said.”
“That may have been the case in the past, but increasingly it is not because the companies are losing customers, the fines are getting heavier and Ofgem is getting tougher. I wish it had been tougher in the past. Just look at the fines that have been levied and can be levied. We have seen fines of £3 million, £4 million, £10 million, £15 million. Indeed, under the coalition we have seen Ofgem fine more companies than ever before, and by higher amounts. In the nine years after Ofgem was established, it took enforcement action in just 10 cases. Since 2010, in four years, we have seen 27 cases, with fines totalling nearly £51 million.”
“When Ofgem has another breach put to it, it has to look at that breach; it has to look at what has happened in that breach. It does not, as I am about to say, only have the fine/penalty option; it may issue improvement orders, as we are seeing. Let me come to the process, because I think the right hon. Lady’s policy will not stand up, and she will see that we have lots of powers to help consumers.”
“It is under investigation. Does she think her new power should have been used to revoke npower’s licence? A simple yes or no would suffice, if she is willing to give us an example. She is not, and the House will have noted that.”
“Lady is talking about already exist in the form that I have described, where orders happen and improvement orders are required and they are not complied with. This looks like a regime that is working today and it was not working under Labour. If the Opposition are proposing to lower the bar for a nuclear option, it is incumbent on them to explain exactly when that would be used, because consumers and businesses need to know exactly where the line is drawn. Perhaps the right hon. Lady wants to clarify her position now; she failed to do so, despite being intervened on by myself and my hon. Friend the Member for Warrington South (David Mowat). Let me give the right hon. Lady an example. Would she have expected Ofgem to have closed npower down by now? More complaints have been made about npower than any other energy company.”
“I am going to make some progress. In fact, the current law allows the regulator to do more than just fine a company. Let us take an example. Ofgem can issue provisional orders that require a range of things, including banning a company from taking on new customers and setting specific behaviour that it must meet so that it is no longer in breach of licence conditions, including the standards of conduct. A final order can be issued when Ofgem believes that the same licence contravention is likely to continue, and in doing so Ofgem can look at the pattern of behaviour of previous breaches. Breaching a final order could then trigger a licence revocation, even if that remains an extreme circumstance. The powers that the right hon.”
“I will not give way. The right hon. Lady is seeking to allow Ofgem to close down a firm more rapidly than it can now. She wants to lower the bar for the nuclear option.”
“The right hon. Lady really must tell the House, would she have pressed the nuclear button yet? Is there one example of energy company bad behaviour that she thinks would have merited her policy? Ofgem could close an energy company down, but it would have to give that firm the chance to improve. If a company ignored improvement orders, Ofgem could then issue a final order, and if that was ignored, it could then close the company down under current law. But the right hon. Lady seems to want the regulator to be able to intervene before an improvement process has been gone through—before a final order.”
“Smart meters could do for energy what the smartphone has done for mobile communications. Regulation is vital, and we are making sure that we have an active and engaged regulator with the right balance of powers to effect change. There is a basket of powers that we have strengthened, such as criminal sanctions where appropriate, powers to fine companies and compensate customers directly, and the ability to work with companies with poor customer service and help them to improve. As a very last resort, with the bar set high, we have the power to revoke a licence where there has been a serious breach of conduct. That is the picture under this Government.”
“The question before us is, what is the right way to achieve that? The Government favour a balanced approach of competition, technology and regulation, giving people the choice to move to new suppliers with better service and better deals. Under this Government, the new independent suppliers that we have encouraged regularly top the best-buy tables and the tables for best customer service. People are voting with their feet thanks to our increasing competition and punishing bad service. The new independents are growing rapidly, with more than 2 million customers, and the big six are losing market share every day. We can improve services for customers with technology, bringing the digital revolution to the energy market so that information is more accurate and easier to understand.”
“Well, if the right hon. Lady does not want that—if she is still expecting a process of orders and final orders—the House should be clear: she is proposing absolutely nothing new of substance. This whole debate is a fabrication. But if she does want Ofgem to be able to close a company down earlier—if she does not want Ofgem to go through an improvement process with a firm that has behaved badly, as now—she really has to tell us how her proposal will work, and how it will be different in substance to the current system, and she has failed to do so. I do not question the right hon. Lady’s motives or commitment in initiating this debate; I agree that there is a problem, and we both want the same thing. We want a consumer-focused market in which bills are kept as low as possible and the energy companies provide a high-quality service.”
“Obviously, I am grateful to my hon. Friend for his helpful comments. Smart meters have been well tested, and there is a lot of enthusiasm for them. One million have been rolled out, and consumers have embraced them. I was asked to quote Sir Bob Geldof at the launch of Smart Energy GB, but I do not think I will. I promised to give way to other hon. Members.”
“I am grateful to the hon. Gentleman for his measured comments. The process in the law that I have described does end in a red card, and I hope that when he and the right hon. Member for Don Valley look at it in more detail, they will see that it can result in a red card. I said that I would give way to the hon. Member for Bolton South East (Yasmin Qureshi).”
“Lady proposes to lower the bar on the most extreme sanction the regulator has—revoking a licence, putting companies out of business, reducing competition and causing chaos for their customers. One has to think very carefully before changing the existing power to revoke a licence.”
“The Labour Government set up Ofgem and decided what powers it would have, and when they realised they had got it wrong they reformed Ofgem. In opposition Labour decided it would scrap Ofgem. Now it seems to have U-turned and is looking at Ofgem’s powers instead. First, Labour proposed making Ofgem force companies to track wholesale prices in their retail prices, something which would destroy forward markets and force energy companies to purchase energy in the short-term markets. That is bad news for their customers, as I demonstrated the last time we debated energy policy. It is a recipe for chaos and yo-yo bills, with prices as volatile as the wholesale markets themselves, and on average higher than now. Now the right hon.”
“I reassure the hon. Lady that we have legal advisers in the Department, as does Ofgem. Looked at together, the Labour party’s proposals—not just the one before the House today—are clearly designed to upset the current balance between competition and regulation. Labour seems to want to rely on more heavy-handed regulation and even price controls to try to micro-manage energy costs and customer service standards from the desk of the Energy Secretary in Whitehall. We know what the consequences of that approach are because we have seen them before: distorted markets, reduced competition, poorer service and lower investment. Let me gently remind the right hon. Member for Don Valley of her party’s record in government and, indeed, in opposition.”
“Lady for giving me this chance to show that not only do we take this issue seriously, but we have acted. I say to her and the House that the nuclear option of revoking a licence should remain, but it should remain one of last resort because that is in the consumer interest.”
“She has not given us one example of a case in which Ofgem has fined a company and she thinks that, under her power, Ofgem should have closed it down. She has simply failed to make the case for reforming the existing power. She has failed to make the case for lowering the bar. I have shown that this power exists but it is a nuclear option, and rightly so because the consequences of its use are so severe. I say to the House that we have the right balance. We are making progress and have achieved more competition, tougher regulation, more choice and higher fines. People are able to punish firms themselves, without having to wait for the Government to do something. But when the regulator does punish a firm, under this Government, there is real financial redress. I thank the right hon.”
“No, I do not because if a situation gets to the point of a final order, the regulator will look at other behaviours, but it will judge that particular breach. The right hon. Lady gives one example, but we could give many more. For example, we have heard from npower and Ofgem today that npower has made the improvements that were required of it. Presumably, if it had not done so, there would have been another improvement order and, potentially, a final order. Of course, it does not automatically follow that after a final order we go to revocation of a licence, but it is a process that could result in revocation after the matter has been properly investigated. I am glad that I have had a chance to explain that to her. So far today the right hon. Lady has not been able to come up with one circumstance in which her proposal would be used.”
“I have engaged extensively with my EU counterparts on the European Commission's proposals for a 2030 climate and energy framework. This has included discussions at the Energy and Environment Councils in March, May and June this year; many meetings of the green growth group of like-minded EU Ministers, which I established in February last year; and various visits to individual member states for extensive bilateral engagement. Throughout these discussions, I have stressed the need for early political agreement on an ambitious and cost-effective 2030 framework. This is important to unlock low-carbon investment and to put the EU in a stronger position for the global climate negotiations in 2015.”
“I do not think there is a dichotomy of policy. One of the key issues in the 2030 package that we are negotiating is reform of the EU emissions trading system to send a carbon signal that everyone had expected under the 2008 deal, which has failed to come through. It is right to proceed with this reform. I am proud that Britain is leading in Europe on the ambitious climate change package that is vital to tackle climate change.”
“I am looking forward to dinner on Friday night. I did not realise it was in my diary, so I had better confess it to my wife. The renewables target for 2020 was a very sensible one; it was needed to bring an immature industry forward, but I do not think it is needed for 2030. What is most important for 2030 is having an ambitious greenhouse gas reduction target. That is what we need to tackle climate change, and we need to do it in a technology-neutral way, which enables carbon capture and storage, energy efficiency and all low-carbon technologies to come through. I think that is the greenest approach.”
“The Government are strongly committed to improving competition. Since 2010, 12 new companies have entered the market, meaning that there are now 19 independent domestic suppliers competing with the big six. Latest figures show that half the households that switch are moving to independent suppliers and we are set to halve the time it takes to switch. Ofgem’s retail market reforms have delivered a simpler, clearer market, and its market maker obligation is improving wholesale market access for smaller suppliers. Last year, we asked the competition authorities to make an annual assessment of competition in energy markets. Consequently, Ofgem has consulted on a market investigation reference, which we strongly support.”
“I am grateful to the right hon. Lady for her question, but let me just correct her. The market share of the independents is now nearly 6% compared with less than 1% in 2010. That extraordinary growth in such a short period shows the value of competition, with 1 million people switching to independent suppliers over the past year. However, she makes an important point about wholesale energy prices, and we discussed that at length yesterday. We have taken action both through competition and through supporting the competition inquiry, which has real teeth. That stands in stark contrast to the previous Government. When the Leader of the Opposition was doing my job, he failed to take any action, even though wholesale energy prices fell much faster than they are doing now.”