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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“The Office for National Statistics figures show that from 2005 to 2009, average investment in the electricity sector was around £5 billion a year. That was far too low for the country’s needs. We had to work tirelessly to turn it around, and we have. Since 2010 investment has continued to rise. On average in this Parliament it has risen by almost £8 billion a year. In 2012 investment exceeded £10 billion—the highest figure on record—and we have a pipeline worth £187 billion, including the first nuclear power station in a generation. There have been record levels of investment in renewables. Bloomberg estimates that average annual investment in renewables has more than doubled in this Parliament, compared with the previous one. Last year electricity generated by onshore wind rose by 36%. Offshore wind is up 45%. Solar is up by almost 70%.”
“Lady tries very hard to paint her party out of the picture and to blame others for the problems we face, but after 13 years of Labour rule, it was not just a wrecked economy that the coalition inherited four years ago. We inherited an energy infrastructure future with a huge multibillion-pound black hole at its heart, the result of years of underinvestment, dithering and delay, and we inherited a retail energy market which, over 13 years of a Labour Government, had been stripped of proper competition and had become hugely complex and confusing for consumers, with prices rocketing and no avenue of escape from the clutches of the big six. In both these areas—in investment in infrastructure and in reforming the markets—this coalition Government have had to clear up the mess that Labour left behind. Look at the investment figures.”
“It is a shambles, and it is back to the 1970s. Given that it clearly will not work for consumers, might it work for businesses? Typically, large non-domestic customers have bespoke sophisticated fixed-term contracts which pass through each element of third-party costs. How would the price freeze work for them? What would happen to a contract whose term ended during the freeze? Alternatively, will comrades on the Opposition Benches decree that contracts need to be renegotiated ahead of a freeze? Will the comrades stop at energy price freezes? Are there plans to freeze rail fares or water charges? In the past six years butter and margarine prices have gone up faster than energy prices. What is the plan for butter and margarine prices? The right hon.”
“Instead, would Labour legislate to force companies to pass on each and every cut in wholesale prices, and how would that work? It is a reasonable question. Would Labour legislate to force price cuts during the freeze, or would companies be able to hold on? If a company has bought its gas 18 months ahead, paying a higher price on the wholesale markets, would Labour still force it to cut or freeze its prices, bankrupting it? The Opposition want to intervene in the markets to control prices and second-guess global price changes, so they must have the answers to these questions. Would smaller suppliers be exempt from the price freeze? How would the price freeze be applied to new entrants? Alternatively, is Labour happy to see a return to the big six, with just a smaller number of suppliers? This is a gimmick, not a policy.”
“Are they proposing to freeze all current tariffs in their existing state, in real cash terms? Would people be able to switch back from a higher but longer fixed-rate tariff to a lower, variable-rate tariff before that variable rate became fixed by law? If a cut-price deal was set to end during the freeze, would suppliers be forced to continue it until the freeze ends, penalising firms who try to help their customers? We know the problem for smaller competitors if wholesale prices rise. They tell us that they would go bust under Labour’s energy price freeze. But what if wholesale prices fall during the freeze? Is Labour proposing to prevent firms from passing on that price fall? [ Interruption. ] I am delighted that the right hon. Lady said that, because it is clear that Labour will not prevent bills being cut.”
“The right hon. Lady is absolutely right in that, as the recession took place there was a period when wholesale gas prices plummeted, because the economy was in such a mess that the demand for energy was reduced. However, she ought to be careful about going too far on this issue. Whatever the price rises are, there is a problem for consumers. We know that incomes have fallen as we have emerged from Labour’s great recession, and the fact that price rises have been slowing will be of little comfort. I can, therefore, understand why a promise of a blanket, Government-imposed energy price freeze might seem popular, but as I will demonstrate, it is not a price freeze but a con. At no point have the Opposition explained how their proposal would actually work, so let us try to get to the bottom of their thinking with a few questions.”
“My hon. Friend is right. Although we have managed to reduce the subsidies to solar and onshore wind, we are seeing a boom in renewable electricity investment.”
“As the competition authorities take forward their work in the proper manner, we will continue to act to ensure that we have a real evidence base on how to continue to mend the markets that Labour ran into the ground. That work will take around 18 months to complete, but as I said at the start, because of Government action, the energy companies are now saying that there should be no further rises in bills over the next year unless circumstances change drastically. Some have gone further, and I welcome that.”
“I am prepared to give credit to all parties, which is something the Opposition rarely do. I am pleased that they voted for our Energy Act 2013 and now support the market investigation reference, but it was the Conservatives and Liberal Democrats, in opposition, who had to push time and again to get the Labour Government to act on things such as feed-in tariffs, so we will not take any lectures on that. We are acting to bring far greater openness to the retail markets so that the energy suppliers can be held to account for their prices, and we are acting to increase liquidity in the wholesale markets, further boosting competition. All these actions maintain the pressure that bears down on prices.”
“Were the Government to fix prices by law, as the Opposition propose, without any idea of the consequences, we would risk undoing all the progress we have made for consumers and business, risking the investment we need to keep the lights on into the next decade for consumers, undermining the independent suppliers and forcing consumers back into the hands of the big six. Let us continue to expose Labour’s energy gimmick to the oxygen of debate between now and the next election. The Sun may well re-run the Kinnock front page from 1992.”
“My hon. Friend is right. The independents’ share of the retail market has gone from 1% in 2010 to 5% under this Government. We have seen people switching from the big six to the small independents. Just last month 40% of those switching went to the smaller independent suppliers. Their customer base has been growing, but it is because we are not complacent, unlike the previous Government, that we have asked Ofgem to make their competition assessment, and we are supporting its proposal for a market investigation reference.”
“Energy companies such as npower, E.ON and EDF have also argued that a market investigation reference would be the best way to restore consumer trust and decide what changes are needed on the basis of the evidence. On the basis of the evidence provided by the regulators published today, this is the right course of action to take. It is not a quick fix, but it is the right way to restore people’s trust that the energy markets are working for their benefit. It is the right way to create long-term certainty for investment. The Government strongly support the process. I urge the whole House to join us in that.”
“While the competition authorities take forward that work, the Government will continue to support families, individuals and businesses, and will bring forward policy packages throughout the year to put consumers in control of their energy bills, help the fuel poor, and further support competition. That will include: halving switching times; customers off dead tariffs; the first fuel poverty strategy in more than a decade; smart meters installed; help for those on prepayment meters; boosting the green deal; criminalising market manipulation; and boosting independent suppliers. That is a course of action that consumer and business groups such as the Federation of Small Businesses, Which?, Consumer Futures, and Citizen’s Advice have called for.”
“Tackling those issues through independent competition authorities provides companies and investors with the confidence that the process will be evidence-based, fair and just, and free from political interference. Today Ofgem has published the legally required consultation on its proposed market investigation reference, which will run until 23 May, and it will make a final decision on referral by the summer. If a reference is made, the Competition and Markets Authority must complete its work within 18 months, which means we can expect its report and recommendations before the end of 2015.”
“In the light of that assessment, Ofgem is now proposing a tough but sensible course of action: a full market investigation reference. That would be undertaken by the new Competition and Markets Authority, which has the robust powers required to investigate the market and take the action needed to strengthen competition. As the Minister responsible for the decision to create that powerful new competition body, I am particularly pleased that Ofgem is proposing to make energy markets its first major task. A market investigation reference is a course of action that should not be lightly undertaken, particularly when the energy market is going through radical changes to introduce new low-carbon generation while ensuring security of supply.”
“It is not just the electricity markets that we need to address. On average, people spend £150 more per year on their gas bills than on their electricity. The gas market does not have a vertically integrated structure. Britain’s gas wholesale market is one of the most liquid in Europe, with large volumes of gas bought and sold openly between suppliers and producers. The assessment shares my concern that parts of the gas market, particularly the domestic gas supply market, may not be delivering for consumers. Latest analysis suggests that profit margins for gas supply are around three times higher than that of electricity, with some companies making five times the profit supplying gas, compared with the profit margin on electricity.”
“Although the assessment notes that there has been real progress in improving competition in recent years—especially in the growth of the number of independent suppliers—the big six are still dominant with a 95% share of the domestic energy supply market. In the electricity markets, the big six operate a model of vertical integration that is not transparent, and forward markets that are not currently liquid, as I have argued from this Dispatch Box. Although Ofgem’s new market maker reforms may assist that, the assessment rightly wants to dig deeper. However, as the assessment today shows, it may be that vertical integration is in the consumer’s best interests and can ultimately save people money. The assessment cautions against rushing to judgment or to solutions, as some have sought to do.”
“Secondly, evidence that the markets retain the geographical pattern that existed before privatisation, and can mean higher prices for customers who do not switch from their home supplier. Thirdly, evidence of possible tacit co-ordination between energy companies, which includes a strong alignment of pricing announcements in timing and extent. Fourthly, barriers to entry and expansion for new companies that make it difficult for them to challenge the big six. Finally, evidence that the big six have seen increasing profits that do not appear to reflect increasing efficiency, which is indicative of a possible lack of competition.”
“Despite all these reforms, however, the Government are determined to do more. That is why in October last year we announced that Ofgem, working closely with the Office of Fair Trading and the Competition and Markets Authority, would undertake annual reviews of the state of competition in the energy markets. That first annual assessment, and its recommendations, back our decision to turn to the independent competition authorities. This expert review has found five areas in Britain’s energy markets of real concern that need further investigation. First, a low level of trust and lack of engagement in the energy market by consumers, which is not compatible with healthy competition.”
“The best-buy energy tables are now dominated by the independent suppliers. Tariffs are simpler, bill formats clearer, and the process for switching suppliers is being speeded up. According to the latest statistics, compiled by ElectraLink and Energy UK, almost 3.5 million people switched electricity suppliers last year, and independent suppliers gained more than 700,000 new customers—about 20% of switchers. In January and February this year, almost 500,000 people switched suppliers, with independents gaining more than 200,000 new customers—more than 40% of switchers. The wholesale markets are also being opened up, with liquidity in the day-ahead market transformed. The forward markets are set to follow suit under Ofgem’s market maker reforms to be introduced from next week, so the energy markets have improved since 2010.”
“The supplier base had shrunk from 15 majors in 2000 to just six in 2010—Labour’s big six. Many people found it difficult to switch. The profusion of more than 350 complex tariffs and complicated bills, for example, made it difficult for people to work out how to get on the right tariff for their circumstances. The wholesale market was also dominated by the big six as they either supplied themselves or opted for over-the-counter deals with no transparency. The coalition Government, working with the regulator Ofgem, have set about the long task of improving the energy markets to make them work for consumers. We have opened up the markets to new suppliers and generators. Labour’s big six now face 18 new retail competitors whose market share has more than doubled since 2010.”
“With permission, Mr Deputy Speaker, I would like to make a statement on competition in the energy markets. Today Ofgem, the Office of Fair Trading and the Competition and Markets Authority have published the first annual assessment of competition in the energy markets, and I have made copies available to the House. Efficient, open markets made up of diverse businesses competing for trade are the best way to ensure that consumers get the best deal on price and service. Strong and independent regulation of competition helps consumers too, because constant political interference for short-term gain can add to long-term risk and costs. When the coalition Government took power, we inherited energy markets that were not working in the best interests of the people of Britain.”
“Lady needs to reflect on all her policies. I am delighted that she has, at long last, changed her mind and agreed to the market investigation reference. That is good to hear, but the Government have been acting to help people with their bills through the warm home discount for the 2 million lowest income households, through the average £50 we took off bills before December, and through our work on energy efficiency and switching. We have been extremely active and will continue to be active during the review, as will Ofgem. The Government are in favour of better prices through more competition to deliver secure green energy.”
“We expect all of that to happen and the assessment to get going before summer. The right hon. Lady asked about the price freeze. The problem with Labour’s blanket price freeze is that it is a pro-big six policy. Labour created the big six and it is supporting the big six. Of course SSE is able to have an energy price freeze—it is a big company. Big companies have the balance sheets that enable them to buy 18 months ahead. We have never said that the big six could not have a price freeze. It is the smaller competitors who oppose the price freeze. When the Leader of the Opposition made his announcement to the Labour conference, it was the small companies that were complaining, saying that it would put them out of business. That is the true Labour party: putting the smaller competitors out of business. The right hon.”
“I know she was not on top of reforms in the wholesale market, but Ofgem has taken that action and is now proposing the referral. In the spirit of welcoming the statement, she should also welcome the action Ofgem has taken. Labour set up Ofgem and when the Leader of the Opposition was doing my job he reformed it to make it more effective, so it is ironic for the right hon. Lady and the Opposition to criticise their creation that they reformed. The right hon. Lady asked one or two specific questions. She asked me whether small business would be covered in the reference. Yes, it will. That is, of course, the independent competition authority’s business, but we believe that it will be and that it should be. On the timetable, as I set out in my statement, we expect the consultation to finish by 23 May. Ofgem will then make its final decision.”
“One of the reasons we asked Ofgem and the competition authorities to do this work is because we were impatient that not more was happening in the markets. What is interesting about the referral is that the Leader of the Opposition could have done it when he was doing my job, but he refused to take this measure. He refused to do so when he had the power, so I have to say to her that Labour does not really have a leg to stand on. Labour created the big six; we are taking action to create competition. I am surprised that the right hon. Lady continues to bash Ofgem, the independent regulator. It has taken action in the past few years, particularly under this Government, to improve competition. I thought Labour supported the retail market review and the wholesale market reforms of the market maker obligation.”
“First, I welcome the right hon. Lady’s welcome for today’s announcement. That is very important for people outside this House to see: not just consumers and small businesses who will be the beneficiaries of this action, but investors and the industry. Cross-party agreement on the way forward to promote competition in energy markets is very important for investment, so I strongly welcome her welcome. Political agreement is a good step forward for energy markets. I disagree, I am afraid, with some of the right hon. Lady’s other comments. Of course I agree that there are serious problems. One of the reasons why the Government have been reforming energy markets from day one is that we thought there were problems.”
“My hon. Friend is absolutely right, and that is one of the problems that many have with the official Opposition’s policy. Governments do not control wholesale prices. We have seen large increases in wholesale gas prices over a long period, primarily driven by the increase in energy demand from countries that are growing such as China and India. My hon. Friend is absolutely right to say that we cannot control that, but we can do everything in our power to help people, whether by promoting competition or helping people to save energy through energy efficiency.”
“First, for the avoidance of doubt, it will be Ofgem that makes the referral to the Competition and Markets Authority, not me. However, I want to make it clear to the House that we have been acting on competition issues in energy markets from day one in 2010 and will continue to do so. Where evidence is brought to our attention or Ofgem’s that more can be done, we will do it. As I said in my statement, consumers can look forward to our work with the industry to drive forward faster switching times, for example. We want to halve switching times, so that competition works for people and they can get the best deals in the market. We are not going to do nothing during the review; we are going to be very active. However, the review is critical to doing a deep dive and getting a deep analysis of what is going on.”
“My hon. Friend is absolutely right. We are rather more ambitious than the official Opposition: we want to see low energy prices through competition, not just to freeze them. He is right that reducing the number of tariffs is important—the Labour party refused to do that in government—and the retail market review by Ofgem, which the Labour party wants to abolish, has led to a reduced number of tariffs. As for switching times, which he has focused the House’s attention on, we have already been working with the industry through Energy UK, which has a body working with all other parts of a chain of companies involved in switching customers. We will report later this year on the progress we believe can be made and how it can be made. It is complicated, but we are determined to deliver it.”
“It is always nice to have charm in the House. I have to tell the hon. Gentleman that Labour’s proposals include introducing a pool. The problem is that the day-ahead market, which is like the pool, has grown dramatically under this Government. That is one of the reasons why I said that Labour’s policies are absolutely flawed: because the Opposition have not looked at what is actually happening. Indeed, I asked the right hon. Member for Don Valley (Caroline Flint) in that debate whether she had read the report and it was clear that she had not. That is one of the reasons why we think Labour’s policy proposals are flawed.”
“My right hon. Friend is absolutely right. The Labour party created the big six, and now it seems to be worried about the fact that we are trying to take action. Its policy would entrench the big six, and would undermine the competition that we have delivered. The Labour party set up Ofgem, and now it wants to abolish it. People listening to the Labour party and looking at its record must be astonished that it has the gall even to pretend that it has a sensible energy policy.”
“I think that recommendations made by the Select Committee to Ofgem are matters for Ofgem. In the Energy Act 2013, we set out a new approach for my Department, working with Ofgem, and provided for the introduction of a strategy and policy statement. We have made the reforms that we believe are needed to ensure that Ofgem works well with the Government in promoting competition. I am delighted to note that, although the Labour party still seems to want to abolish Ofgem, it supports its proposal for a market investigation reference.”
“I am pleased that the competition assessment is focusing on vertical integration, because I think that it needs to be looked at. Ofgem proposed the introduction of a market making obligation because it wanted to tackle some of its concerns about vertical integration. However, the consultation document states: “We recognise that there are benefits to vertical integration in terms of cost efficiency…and in terms of supporting investment to maintain security of supply. However there are also costs in terms of barriers to entry.” The report is balanced, and, unlike the Labour party, has not rushed into making a judgment. Everything cannot be the fault of vertical integration. The gas market is not vertically integrated, but I believe that there are serious problems related to competition in the domestic gas supply market.”
“The investigation will not deal with that, because it involves policy on the generation mix. A mixed, diverse source of low-carbon energy is the best way in which to protect the consumer. There are Members of Parliament and, no doubt, many people outside who know the future—who have a crystal ball and know what the various technology costs will be in the 2020s. Perhaps SSE has a crystal ball; perhaps the hon. Gentleman has a crystal ball, but I do not. I have created a framework in which there is competition between technologies, and I believe that that is the right way in which to proceed.”
“It is always nice to be able to agree with my hon. Friend on the odd occasion— [Interruption.] Not necessarily on everything he said—the right hon. Member for Don Valley (Caroline Flint) is very worried about that—but on his point about the Labour party and competition, I do agree.”
“That is why we are looking at simpler bills, fewer tariffs, collective switching and faster switching times. We are relentless in trying to get those switching rates back up again, and the recent evidence suggests we are on the right track.”
“I am glad the hon. Gentleman has raised that point. Switching rates have fallen in this country primarily because of the end of doorstep selling. That method of trying to persuade people to switch was one of the reasons why switching numbers increased in the early days after privatisation. However, all Members in their constituencies will have experienced cases of doorstep mis-selling, and it was the many problems that that caused that led many people in this House and the regulator to say that it was not an acceptable way of driving competition. Doorstep selling has gone out of the picture and that has been the main cause of the reduction in switching. We have therefore had to address that and look at new, innovative ways to try to get the rate of switching going back in the right direction.”
“I strongly agree with my hon. Friend and I am genuinely pleased at the way in which the discussion has gone among the parties in the House. It is important that we allow the independent competition authorities the time to get to the bottom of the matter. Let the professional experts deal with it, and let the political parties listen to them and follow their advice.”
“I certainly do not recognise that figure, and the hon. Gentleman needs to look at what has been driving up bills: it has been the price of wholesale gas. Whether it is that trend in the past decade or the events in Ukraine and Crimea, people should worry about relying on just importing gas from abroad. We need to diversify, so we need to invest in renewables, nuclear, carbon capture and storage, and energy efficiency. We need a diverse approach. That is the best way to ensure that we get prices down and keep the market competitive.”
“I am grateful for the hon. Lady’s question, but I have been accused by the Opposition of saying—in the same debate, I believe—that Ofgem is fit for purpose and that Ofgem is not fit for purpose. I believe she was quoting her Front-Bench colleague, the right hon. Member for Don Valley (Caroline Flint). I will let the hon. Lady try again next time.”
“On that last point, one is illegal and one is not, but I think we can all agree that they both need to be investigated by the independent competition authorities. It is interesting that Labour is complaining—at least, some Labour Members are complaining—that we did not make this referral before, given that Labour’s leader, when Secretary of State, refused to make the market investigation reference. Let us remember that in the previous Parliament electricity bills and gas bills increased faster on average each year than they have done under this Government. He had all the reason to make that reference to try to improve competition, but he flunked it when he had the chance.”
“If the hon. Gentleman reads the assessment, he will see that the competition authorities have focused on that last point. On the market investigation reference, I have to remind him, again, that it was the leader of his party who flunked that opportunity. I also have to tell the hon. Gentleman that he should read the record, because Labour’s spokesperson in this area, the right hon. Member for Don Valley, was saying just a few weeks ago that a market investigation reference was not a good idea, that to make such a reference would be to kick things into the long grass and that it should not happen. I am glad that Labour has changed its position.”
“I completely disagree with the hon. Gentleman; this coalition Government have been acting from day one. We inherited Labour’s big six. We have deregulated, and we now have 18 independent new suppliers taking on the big six. The best buy tables show that people can save hundreds of pounds by switching from Labour’s big six to the new competition that has come about under this Government. We have been making lots of efforts, but because we are impatient and frustrated and we want to do more, we set up this annual competition assessment and we welcome its proposals today.”
“I like the hon. Gentleman, despite his question. It is not a Conservative mantra—it is a Liberal Democrat mantra, a coalition mantra and a consumer mantra. Let us remember that the people who have been calling for this reference include Which?, Citizens Advice, Consumer Futures and the Federation of Small Businesses, and we are delivering on that today.”
“The hon. Gentleman can do that by backing this reference by the competition authorities, which will ask all those questions. I say to him and his constituents that if they are worried now, they should look at the best buy tables and use the competition that is there now. I hope that, as a result of this reference, we will supercharge that competition. There is choice now, because this Government have brought it in.”
“Even though the Act may have taken a year to get through this House, I am afraid that the hon. Gentleman did not manage to read it. We had measures supporting Ofgem from both its retail market review and its wholesale market review. There was also the overall reform of the electricity market to ensure that we had competitive markets for the future. I am afraid that the hon. Gentleman is wrong.”
“We will shortly be consulting on changes to the energy company obligation. We are aware of a number of ECO-funded solid wall insulation projects that are not going forward, but we have been encouraged by the large number of households that have already benefited from ECO measures, which is now estimated at nearly 450,000 properties at the end of December 2013. Moreover, thanks to the package of changes that I announced on 2 December 2013, which included the proposed ECO changes, consumers across the UK are set to see their energy bills reduced this year by an average of £50.”
“I am sure that the hon. Lady welcomes the many ECO measures in her constituency. The ECO measures that we announced in December prolong the programme for two more years and have a particular focus on fuel poverty, which I would hope that she welcomes. We will announce quite soon our proposals on incentives for people who want to invest in green deal measures, through which I am sure she will see real benefits for solid wall.”
“My hon. Friend is absolutely right. As a result of our changes, we believe that more ECO measures will help more households. The fact that we have managed to ensure that the affordable warmth and carbon-saving community obligation aspects of the ECO will be extended at the existing rate for two more years is extremely good news for our efforts on fuel poverty.”