David Cameron: you crowed about your ‘involvement’ with getting customers cheapest energy prices at PMQs this afternoon. Here’s the reality. Leaving aside for a moment the fact that what you proposed (‘Energy Companies will GIVE customers the lowest tariff’) has not happened, and indeed, as I have observed before would be almost a technical impossibility to execute, we now know the following:
- Following your intervention DECC went away and hurriedly worked out how to have a consultation on your proposal, and how to put it in the Energy Bill. They had not previously intended to do so, and were anticipating hearing what OFGEM might propose on the subject.
- They concluded that your proposal would not work, and instead opted to consult on proposals remarkably similar (sorry, I’m being kind: almost identical) with those published by OFGEM two days after your original intervention. (See p8 of Ofgem consultation here)
- The OFGEM proposals, to reduce tariff numbers to four, are easily implementable by Ofgem, without further legislation as they said to Energy and Climate change Select Committee just recently (see ECCC oral evidence 30th October)
- If Ofgem’s proposals were implemented, they would come into place in the summer of 2013.
- Because of continuing delays to the Energy Bill, it is now certain to be a ‘carryover bill’, as the Secretary of State confirmed to DECC select committee yesterday. This means that the Bill along with any amendments to the legislation considered necessary by the new ‘consultation’ will not reach the statute books until the spring of 2014 at the earliest. Secondary legislation then has to enact clauses in the Bill, which may include clauses now being written following the new consultation.
What this all means, Mr Cameron is this. If you had not intervened, had waited two days for OFGEM to report, and then had enquired about how their proposed mechanisms might work, you would be looking at a new tariff regime coming into place next summer. As it is, an identical new tariff regime will now not come into place until a year later. Still pleased with yourself?
What you can do, still, is suggest that, after all if the new tariff regime is to be as OFGEM suggests, then legislation is not needed, and they can go ahead and use their powers to make the change. As political expediency on this occasion appears to rank higher in your priorities than good policy-making, I’m pretty sure that won’t happen. But please stop saying you’re proud of what you’ve done when all you have achieved is to waste a year of energy customers’ time and money.