HC Deb 26 February 2004 vol 418 cc407-9
9. Julie Morgan (Cardiff, North) (Lab)

What investigation she has conducted into the differences in the price of electricity among the countries and regions of Great Britain. [156261]

The Minister for Energy, E-Commerce and Postal Services(Mr. Stephen Timms)

The most important reasons for variations in retail electricity prices are differences in local transmission and distribution charges and differing customer willingness to switch to competing suppliers.

Julie Morgan

Will the Minister confirm that south Wales domestic electricity prices are the highest in Britain? Will he look further into the problem and try to do something about it?

Mr. Timms

My hon. Friend is certainly right that the cost of electricity for domestic customers in Cardiff and south Wales is relatively high by comparison with other areas. According to energywatch, however, a typical domestic customer in south Wales could cut the electricity bill by 10 per cent. by switching from the former local monopoly supplier. Fewer customers appear to have done that in south Wales than elsewhere. Energywatch does publish easy-to-use price comparisons and it might be helpful if my hon. Friend pointed out the benefits of shopping around, which can be significant.

Bob Spink (Castle Point) (Con)

So what are the Government doing to increase the transparency of the pricing of electricity, to encourage customers to make that move?

Mr. Timms

That is an important area and, as I said, energywatch is doing valuable work in producing easy to-use and simple price comparisons so that people can easily make the requisite comparisons.

Helen Jackson (Sheffield, Hillsborough) (Lab)

Does my hon. Friend acknowledge that high electricity prices, together with steep rises in the price of scrap steel, are having a serious impact on the UK steel industry—which probably has the highest fixed energy costs of all industries, which it cannot reduce? What action will the Government take to control energy prices in that crucial industrial sector? If none is taken, the steel industry will seriously suffer.

Mr. Timms

My hon. Friend makes an important point. We keep a close watch on energy prices because of their impact on UK competitiveness. Current changes in gas pricing, for example, will affect not only the UK but other countries throughout Europe. The competitive market for energy provides the best assurance of the lowest-possible prices but we shall continue carefully to examine the implications of energy costs for UK companies.

Mr. Julian Brazier (Canterbury) (Con)

In view of the blast against privatization, that we have just heard from Minister for Trade and Investment, will the energy Minister confirm that since privatisation, large British organisations have enjoyed the second-lowest electricity prices in the European Union and that all other organisations enjoy the lowest?

Mr. Timms

There are significant benefits from the structure of the UK energy generating industry and the Government are firmly committed to ensuring that competitiveness is retained.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab)

My hon. Friend will agree that the cheapest electricity on the wires is from coal, which is much more flexible than other sources. The UK coal industry is facing a crisis, with Hatfield colliery facing immediate closure—and Hatfield leads into the country's largest coal reserves. Will my hon. Friend review the situation in respect of that colliery, so that coal reserves on the east coast are not lost?

Mr. Timms

We have a substantial programme of coal investment, involving aid totalling £60 million— including £15 million earmarked for Hatfield colliery. We all hope that a private sector financing package will present itself before the end of March, to take forward the development of the new seam at Hatfield and take advantage of the £15 million grant offer.