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Energy Bill

Volume 508: debated on Thursday 8 April 2010

Consideration of Lords amendments

Clause 10

Schemes for reducing fuel poverty: supplementary

With this it will be convenient to discuss Lords amendments 2 to 9.

In its eighth report of the current Session, the Delegated Powers and Regulatory Reform Committee recommended several changes to the Bill in connection with the procedures whereby secondary legislation is made in part 2, which deals with social price support, and part 4, which sets out the general provisions of the Bill.

In respect of part 2, the Committee expressed concern about the breadth of the powers in clause 10(6), which enabled the regulations establishing a social price support scheme to include provision allowing the Secretary of State to disapply or modify the requirements of the scheme. It also recommended that the level of parliamentary scrutiny be increased in relation to changes in the definition of fuel poverty. In respect of part 4, the Committee recommended the removal of the discretion in clause 31(4) that the Secretary of State has, in certain cases, to choose the parliamentary procedure to which a statutory instrument is subject. We tabled amendments in the other place to address all the Committee’s concerns.

Lords amendments 1 and 2 will constrain the circumstances in which the power in clause 10(6) may be used to disapply or modify any requirement of a social price support scheme. That will be done by requiring the circumstances in which the Secretary of State can use the power to be detailed in the scheme regulations made under clause 9. Regulations made under the clause are subject to the affirmative procedure. Lords amendment 3 requires the Secretary of State to inform Parliament of any changes made under clause 10(6) by laying a memorandum before Parliament detailing any such modifications.

We have also addressed the Committee’s recommendation that any regulations seeking to change the definition of fuel poverty, or its extent, for the purposes of the Bill should be subject to the affirmative procedure. Lords amendments 5 and 6 replicate the definition in the Warm Homes and Energy Conservation Act 2000.

Lords amendments 7 and 8 make any regulations that seek to change the definition of fuel poverty or its extent in the Bill subject to the affirmative procedure, as recommended by the Committee. Lords amendment 4 ensures that any such regulations are subject to consultation in the same way as the schemes for reducing fuel poverty.

Lords amendment 9 removes the discretion in clause 31(4) for the Secretary of State, in certain circumstances, to choose the parliamentary procedure to which a statutory instrument is subject. We now consider that we no longer require that discretion, and are therefore content to accept the Committee’s recommendation.

I hope that the House will feel able to agree to the Lords amendments.

Let me begin by paying tribute to the Minister. There are many aspects of the Bill that we have not managed to get quite into the shape that we would have wished. However, she has constantly been courteous, thoughtful and constructive in all the exchanges and dealings that we have had with her, and she has genuinely tried to find common ground on some of the issues. That has not been possible in all areas, but I thank her for the approach that she has taken. With the hon. Member for Harrogate and Knaresborough (Mr. Willis) here too, I would like to pay tribute to the way in which he discussed the issues in Committee and to the thoughtful approach that he took to all our dealings.

The Lords amendments that we are discussing are relatively minor, although we must of course be cautious about any change in the definition of fuel poverty. There is an anxiety out there that what is being done might be an attempt to change the definition by stealth and to wriggle out of some of the commitments that have been made, with a recognition that the Government are way off track in trying to meet their legally binding commitments on tackling fuel poverty. There is an obligation on the Government to end fuel poverty for all vulnerable households by 2010 and to take all households out of fuel poverty by November 2016. We are clearly well off track for the 2010 target, which is a very challenging target indeed. I hope that the Government do not intend, through the measures that we are discussing, to try to find a way of changing the definition of fuel poverty so that they can meet those targets by stealth. I hope that the Minister will be able to give us some comfort on those concerns when she responds to this short debate.

I hope that the Minister can also clarify a little more what the techniques that we are debating can be used for, and therefore explain how broad their application might be. We want to understand the full implications of the changes that are being suggested. The first measure relates to fuel poverty, as we have said, but would other measures relating to fuel poverty similarly be covered? For example, we would like to see measures to require energy companies to say exactly how much a consumer would save if they were on a cheaper tariff. We would also like measures to say how we would make consumers aware of those cheaper tariffs and how they could switch. Could that be done through the orders that the Minister is putting forward today? We would also be keen to see measures to speed up the roll-out of smart meters and to say that this should be done not by 2020, which we think is a profoundly unambitious approach, but instead 2016. Could the measures that the Minister has outlined be used as a way to drive that work forward with greater speed and determination?

It is important that we should see the measures that we are discussing against the background of the Bill and the context in which they were discussed in the Lords. That relates in particular to what the Minister sees as the Government’s strategic role under the Bill and, therefore, the amendments that we are discussing. On carbon capture and storage, there is a strategic case for the Government requiring oversize pipelines to be put in place, so that we can develop clusters of CCS development around the country. We would be grateful if she could clarify what the Government’s views are on such a strategic overview.

It would also be interesting to hear the Minister’s views on the Government’s strategic approach to the development of an offshore grid and what they should be doing to secure it. We are well aware that there is a disagreement between the Government and ourselves about whether that should be mandated, with a requirement to put in place high-voltage DC cabling down the coast, in respect of which we see the Government as having a strategic role, and we are keen to ensure that they similarly have a strategic vision for what they would like to see done in this area.

The proposals that we are discussing are modest changes that are being made for clear legal reasons. It is a shame, as we on the Conservative Benches would all recognise, that the changes made in the Lords have gone nothing like as far as we would have wished. We are very disappointed indeed that the Government did not use the opportunity in the Lords to go further and make this a more fundamentally ambitious and important Bill. It should have included measures on energy efficiency and rolling out a green deal, so that people could have energy efficiency devices installed in their homes in a way that enabled them to enjoy the benefits of that work before they started paying for the costs. The Bill should also have included measures on an emissions performance standard that would require all newly built electricity generation to cut emissions. It should have included measures to reform the climate change levy, so that it became a genuine charge on carbon, rather than another tax on business—an issue that has been so relevant in the discussions more generally this week. The Bill should also have looked at ways of introducing real incentives, so that communities that host wind farms can benefit financially from those schemes.

The Bill does important things, but it could have been improved and it could have done a great deal more. We welcome some of the concessions that the Minister has made, most importantly in being prepared to extend the roll-out of the carbon capture and storage schemes that can benefit from the new levy to include those developed using gas and biomass, which is an important achievement. However, as with so many other aspects of legislation, the Bill represents unfinished business. It is one of a number of Energy Bills that we have seen in the past 13 years, but it still does not measure up to the scale of the challenge that lies before us or the enormous energy security issues that we face. That means, I am afraid, that there will have to be another Energy Bill soon after the election, when we will have a Conservative Government with the drive, the resolve and the commitment to address those issues and take them forward.

May I echo the comments made by the hon. Member for Wealden (Charles Hendry) about the Minister and her colleagues? It is a while since I sat on a Standing Committee, but they were incredibly generous in their approach throughout, as was the Minister herself. I therefore agree with the hon. Gentleman, who was also incredibly courteous and well informed in presenting his points on behalf of the Conservative Opposition.

The sadness for me is that the Bill was introduced probably three or four years too late. What it needed was the new Department—I have to compliment the Prime Minister on one thing: setting the Department up—which has been effective in looking at some of the core issues facing our society. I compliment both the Secretary of State and the Minister on bringing those issues forward. Our party has had a number of major concerns during the passage of the Bill, some of which were, to be fair, addressed in part in the House of Lords—I am thinking particularly of the determination of what fuel poverty is. Let us remember that we had a discussion in Committee about that definition. The Minister was quite adamant that we could go no further, but since then there has been some movement on the issue in the House of Lords, for which we thank the Minister.

However, the difficultly is that an incoming Government, of whatever persuasion, will immediately have to return to the issue, because if they do not, we will not be able to move forward in what I see as three phases. The first issue is carbon capture and storage. Quite frankly, a huge amount of Government effort will be required to make it come to pass. We have had some movement on piping and some thought has gone into the issue of clusters, but that will need to be put into legislation, otherwise, frankly, it will not work.

One area that is missing—we genuinely hoped that the Minister would bring it back in the House of Lords—is this. When will the relationship appear between the installation of the carbon capture demonstrators and what will happen to the disposal of carbon dioxide in the North sea? That relationship—a relationship with those who currently have licences to operate in the North sea and who have an obligation to preserve the aquifers in a state in which they can be used—needs to be created, because once that goes and the whole thing collapses, then we will be in a totally different ballgame. We ought to be able to use this moment as a huge business opportunity and fill the aquifers in the North sea with carbon dioxide from a whole range of countries—particularly those in Europe, but also those further afield—using compression techniques.

The only other point that I wish to make is about this whole business of feed-in tariffs. What concerns me is this. Just this weekend I came back from my small farm on the west coast of Ireland. I was contemplating the discussions that we had with the Minister about those sources of energy other than gas that people use for their main heating. As I filled up my tank in Ireland, just as I fill it up in north Yorkshire, it struck me that the cost of delivering liquid gas at the moment is astronomical. When it comes to fuel poverty, the need to get people to think of ways in which they can generate their own heat and electricity and feed it back into the grid is crucial, but we also need to consider how to broaden the use of fuel poverty to include those areas that do not have access to natural gas.

The Bill is certainly worth putting on the statute book before this Parliament is dissolved, and I hope that when an incoming Government return to this matter, they will treat it with the same compassion and sense of importance that the Minister has shown, and that we can move on to the next stage as quickly as possible.

I thank the hon. Members for Wealden (Charles Hendry) and for Harrogate and Knaresborough (Mr. Willis) for their very kind remarks. I appreciate very much what they have said and may I return the compliment? All of us who have worked on the Bill and in our wider debates in this place have done so with a very proper concern for the environment, for the security of our energy supplies, and for the people who have to pay for the fuel that they use and the fuel poverty that some of them experience. I am pleased to have been the Minister in charge of this important Bill. It has been debated seriously by Members on both sides of the House, for which I am grateful.

The hon. Member for Wealden took his opportunity, as he was entitled to do, to indicate many other things that he wished could have been included in the Bill. However, except for the matters of which he spoke where the Government conceded and made some improvements, the Government resisted those. The Bill was focused on achieving two things: first, carbon capture and storage and how it might be financially supported and organised in this country, and, secondly, the introduction of social price support mechanisms.

These small amendments are procedural and relate to the social price support mechanisms, so they do not allow us to widen the Bill’s scope and bring in any of the new kinds of provisions that the hon. Gentleman would like. He spoke about the green deal that the Conservative party has put forward, but he knows well that the Government have proposed something that is bigger, wider and more costly than that, and which is embodied in our home energy management policy under the warm homes, greener homes strategy.

With regard to the strategy for carbon capture and storage and clusters, we very much agree with all parts of the House that clusters are to be considered and possibly encouraged. We want the best strategic position to be adopted for carbon capture and storage, and we agree with the hon. Member for Harrogate and Knaresborough on the potential for CCS. We believe that the discussions between those in control of North sea aquifers, the Government and the private companies that are developing CCS with Government support, are vital. As we have said, and as the Bill provides, we need to demonstrate that we can not only capture the gas, but transport it safely and store it safely for as long as is necessary.

The hon. Gentleman spoke about the cost of fuel such as liquid gas for home heating. We are sensitive to this point and we are looking for ways to enable people to reduce their bills and have more secure supplies at lower cost through such means as air source heat pumps, which would enable people to obtain heat through a completely new technology. That is now well tested and we think that it can be a really good substitute for those who are off the gas grid. There are also ground source heat pumps. As the hon. Gentleman knows, the Government have incentivised through the feed-in tariffs the provision of systems such as solar photovoltnic, where substantial payments can be made to those who generate their own electricity. Next year, we will introduce the heat incentive scheme, which should be of particular benefit to the kind of homes that he describes off the gas grid, where the incentives would particularly benefit those who move from sources such as LPG. I hope that we can promise the hon. Gentleman that much good will come forward when we are returned to government.

I can tell the hon. Member for Wealden that we have no plans for amending the definition of fuel poverty in the Warm Homes and Energy Conservation Act 2000. Indeed, the Act allows for such an amendment to be made by negative resolution. This Bill does not cut across that. What we do in this Bill and the amendments that I have described is simply a matter for this Bill and the definition there. When providing for a social price support mechanism, we do not want it to be available only to those who by definition would come out of fuel poverty. Of course, some will, but some will be helped to do a little better and some may be prevented from going into fuel poverty. That is the intention of the price support mechanism and these small amendments make all of that possible.

It has been an immense pleasure to be a Minister in the new Department of Energy and Climate Change. I believe that the whole House feels that setting up that Department was a correct decision, as the hon. Member for Harrogate and Knaresborough reiterated today. For those of us who have worked in the Department, I can say that it has been a whirlwind of a Department, which has enabled the country to begin that absolute change in the way in which we generate and use our energy, and at the same time tackle the threat of dangerous climate change.

Lords amendment 1 agreed to.

Lords amendments 2 to 9 agreed to.