Skip to main content

Topical Questions

Volume 520: debated on Thursday 16 December 2010

Since the last departmental questions, we have helped to secure an agreement at the United Nations climate change conference in Cancun. We have published the Energy Bill, which includes measures to boost investment in low-carbon electricity generation, to improve energy security, and to give companies better access to upstream oil and gas. The Bill also sets out the infrastructure of how the green deal energy efficiency programme will work, with particular reference to those in fuel poverty.

Given that Labour Members blame us for everything, including the weather, may I ask my right hon. Friend, in his capacity as climate change Minister, if he can do anything to ensure that we have a white Christmas in Harlow?

There are limits to my powers. I think that the most popular legislation that this House could ever bring forward would be a short Bill requiring it to rain only between the hours of 2 o’clock and 4 o’clock in the morning. Sadly, the technological capability to deliver quite such meteorological results is not yet with us.

Order. There is huge interest, as colleagues can see, and I want to try to accommodate it, but we must have brief questions and brief answers.

Given the list that the Secretary of State just read out, one would think that he sees himself as Action Man, but we heard this week that he describes himself as Tesco Man. Last time I questioned the Government about green investment, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), reassured the House that plans for the green investment bank would be unveiled in the spring. Yesterday, I read that the Secretary of State has lost out to the Treasury and that this much-vaunted green investment bank is to be a fund with nowhere near enough resources to generate the £200 billion necessary for investment in green technologies. The question is whether the country has lost out. Given the impact on British business, job creation and the climate, a properly functioning bank cannot wait, and this confusion is very unhelpful to British business. Will he tell the House what is happening?

I am grateful to the hon. Lady for her question. I can assure her that this matter is still under review by Ministers on the time scale that we were anticipating. Much as I like and respect The Guardian, having worked for it for 10 years, I have to say that its report gave only a partial view of what I said. I said, among other things, that ducks quack and banks borrow and lend. The Chancellor of the Exchequer was the person who put forward the idea of the green investment bank when he was in opposition, and he knows very well what a bank is. I am absolutely convinced, therefore, that we will have an institution that does exactly what it says on the tin.

We still do not have certainty. We hear that the matter is “under review” but we believed that it was a Government commitment. I am proud to be the first Labour/Co-op shadow Secretary of State for climate change, and the Secretary of State has described himself as very happy to be the Tesco of the energy industry. Yet without the green investment bank, whichever model we choose, we will not see the benefits that we want to see. The Minister of State, the hon. Member for Bexhill and Battle, spoke earlier of the importance of community energy and smaller suppliers; we want energy to benefit all. We want to see this bank up and running, and the Secretary of State will have support from the Opposition if it gets going. Will he consider joining me, as the advocate of co-operative climate change, in working for the benefit of all, with the green dividend and green investment shared fairly through an up-and-running bank?

I agree that we have to look very carefully at the sources of finance for green investment. There are undoubted obstacles in the way of some of the technologies that are furthest away from the market, in particular, and that makes the very important case for the green investment bank. That—not the concept—is what is under review at the moment. The commitment to a green investment bank is clearly in the Government’s coalition agreement, and it was an idea of the Chancellor of the Exchequer. Some of the reports suggesting that the Chancellor would want to murder his own baby seem a little far-fetched.

T7. Following on from that question, will the green investment bank include the proceeds of asset sales, as the Chancellor announced recently? Given the importance of green investment to the Tees valley, will the Secretary of State consider putting the administrative centre of the bank in the Tees valley? (30995)

I am grateful to my hon. Friend for his question about the siting of the bank, but that is a little premature given where we are at the moment. I am afraid that quite a long list of hon. Friends and others are advocating the benefits of that to their constituencies.

Capital endowment of £1 billion for a green investment bank was allocated in the comprehensive spending review in 2013-14. I have made it clear that we are continuing to look for asset sales. In our Department, we are looking for asset sales from URENCO, for example, but there are other asset sales across Government that could also be used. We will attempt to use that process to ensure that the institution has the proper endowment of capital necessary for its task.

T2. The green deal is based on loans, which many of my constituents cannot afford, and it places the responsibility for tackling fuel poverty in the hands of the energy companies that have created a national rise in fuel bills of 139% since 2003. Will the Secretary of State explain how the green deal will help the poorest and most vulnerable in my constituency? (30989)

I am happy to answer the hon. Lady, because her question is based on a misunderstanding of the green deal. There is no requirement for anybody to take out personal finance to fund the green deal. The whole point is that finance will be provided for the householder. The company that provides the finance will recoup its return from the householder’s savings on their energy bills. In addition, we will reshape the carbon emissions reduction target and community energy saving programme obligations on energy suppliers into an eco-obligation, one of the key objectives of which will be to provide additional support to those in fuel poverty. Such people will therefore be able to go ahead with the green deal, even if the anticipated savings on their bills are not adequate to pay for the installation.

The coalition agreement anticipated that we might extend green deal finance to microgeneration. We are working on the assumption that green deal finance will be available for insulation measures, because we have secured outstanding incentives for microgeneration through the feed-in tariffs, as was confirmed in the comprehensive spending review. Green deal providers will offer microgeneration proposals precisely because the incentives are so good.

T3. Like the hon. Member for Suffolk Coastal (Dr Coffey), who is no longer in her place, many of my constituents who live in rural areas rely on heating oil, the price of which has more than doubled in the past two months. Companies are now refusing to deliver less than 1,000 litres, which is having a massive impact on families and on schools, colleges and hospitals. What will the Minister do now to deal with that exploitation? (30990)

I would be very grateful if the hon. Lady could give me more details, because we have also heard that some companies are asking people to take lower amounts so that the delivery lorries can get to more homes and more people before Christmas. That is obviously the sensible approach. I would be very concerned if companies were artificially raising the amounts that they expected people to buy at this time.

As we speak, severe weather is sweeping through the north of the country and heading south. Referring back to the Secretary of State’s remarks about Ofgem, will he stress in all his dealings with that body that for those living in the coldest parts of the country, such as the highlands of Scotland, a fair set of tariffs must be applied that are relevant to their circumstances? There is a real feeling of social injustice, which I believe is entirely justified.

I am grateful to my right hon. Friend for that question. As he knows, Ofgem is reviewing competitiveness in the market and the scale of the margins. In addition, a discount scheme is in place for those in fuel poverty, and we will underpin that. The Government are committed to preserving winter fuel payments, and to ensuring that cold weather payment schemes continue. Whatever the weather brings for us over the next few weeks, I hope that we will be in a position to help those who are most hard-pressed. I return to the fundamental point, which is that we have this problem every winter, again and again, and it is time that we dealt with its root causes through energy efficiency measures for those in rural poverty, rather than attempting constantly to put sticking-plasters on it.

T4. Today the Secretary of State told the House that energy bills in private rented housing can be as much as six times higher than in modern social housing. Why do the Government not use the Energy Bill to require all private landlords to comply with minimum energy efficiency standards, and not just when a tenant requests it? (30992)

The Bill will allow us to move forward on F and G-rated homes, for example, if there is not a sufficient improvement in the private rental sector. There is clear provision for us to regulate to deal with the problem.

Referring again to Ofgem, in the past month crude oil prices have risen by 17% but consumers are paying 70% more. Is it not time that the Government took on the oil companies to ensure that my constituents get a fair deal on oil prices? Many of them have no choice but to have oil.

There are two aspects to the matter. Clearly it is seasonal, with demand going up at this time of year, which inevitably pushes prices up, as with turkeys, Christmas trees and so on. However, there is a fundamental problem in the oil market, because people are not getting deliveries when they need them, even when they order well ahead. We are therefore asking colleagues to give evidence to the Office of Fair Trading so that it can see whether there is evidence of collusion or inappropriate practices.

T5. Recent satellite photographic evidence shows that thousands of homes in my constituency are still not properly insulated and are pouring heat into the atmosphere. Given that the Government’s plan A for the economy is clearly already failing, would it not be sensible to have a national crash programme of home insulation as part of the Cabinet Secretary’s plan B? (30993)

The hon. Gentleman may have read recently about the crash programme to do exactly that in Australia. It resulted in large numbers of builders who were not properly trained putting nails through wires in people’s lofts and setting fire to houses. People died, and it was all over the front pages of the Australian tabloids. The result was that energy efficiency got the most appalling name. I intend that the green deal programme will avoid all those pitfalls and deal with the problem genuinely and thoroughly.

Will the Secretary of State join me in welcoming the news of National Grid’s announcement yesterday that it will consult residents in the levels and moors in Somerset, Suffolk’s Stour valley and other parts of the country on undergrounding electricity power cables rather than using pylons? Will he congratulate residents on their peaceful and persistent campaign, which will ensure that residents in rural areas benefit from the technology that is taken for granted in urban areas, where undergrounding is standard practice?

I do indeed congratulate National Grid on undertaking a public consultation on whether the cost of undergrounding is acceptable to the public. I also welcome the research being carried out by the Institution of Engineering and Technology, because people in areas affected by new pylons need to be absolutely convinced of the relative pricing of overgrounding and undergrounding.

T6. My constituents have faced an incredibly difficult winter, and they want to know what action the Government will take now, not in the future, to make energy companies bring down their prices. (30994)

The action that Ofgem is taking is now, not in the future. It is reviewing the matter and making it very clear to the energy companies that margins that are not justified by the economics will incur its wrath, the use of its powers and potentially a competition inquiry. I merely refer to my earlier answer about all the action that the Government are undertaking to try to ensure that people are protected in these difficult times through cold weather payments, winter fuel payments and the voluntary discount scheme. We want to ensure that the people are who most adversely affected are protected.

Palm oil plantations are now seen as a new cash crop in various parts of the world, but they cause mass deforestation and a huge loss of wildlife habitats. What can the Secretary of State do to ensure that we have a global deal on palm oil plantation that is sustainable for wildlife and the world’s natural resources?

One of the real steps forward at Cancun was progress on rainforests and forestry in general. Within the package of measures that was agreed was clear text making it absolutely crystal clear that preserving biodiversity and preventing perverse consequences of supporting palm oil plantations would be a key part of rainforest protection and funding.

On energy security, will Ministers examine critically the supply obligation that we place on companies, given that the tendency to buy short term rather than long term, and sometimes on the spot market, means that there can be no absolute guarantee that the supply will be in place in critical and extreme times for the world?

That is an element of the Energy Bill. We will increase the supplier obligation to ensure that suppliers can meet demand at times of greatest demand. I have also spoken with other Governments—Qatar this week and Norway more recently—about how to secure more long-term contracts to provide greater security of supply and greater price predictability.

I am very concerned about what I have heard in the Chamber this morning. Hon. Members have said that there is a shortage in the supply of oil, that their constituents are going cold, and that schools and hospitals are losing out. We obviously have an oil supply crisis. The Minister of State, the hon. Member for Wealden (Charles Hendry), says that he wants suppliers to ration their oil, but will the Secretary of State take personal command of this situation, call in the oil supply companies and sort this out?

I have complete confidence in the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), who has responsibility for energy. He has been absolutely hands on in dealing with that matter and has kept me informed. I believe that the measures he is taking are absolutely appropriate, but we are watching the situation day by day to ensure that the heating oil supplies are there.

In the light of the role that the World Bank could play in establishing and managing the new green climate fund, which was set up following the Cancun agreements, will the Secretary of State comment on the current level of fossil fuel lending undertaken by the World Bank group, and will he support a major shift to lending for renewables instead?

The Government have repeatedly said, and I entirely agree, that the lending practices of the World Bank and other institutions must reflect the overwhelming need that we have as a globe to move towards a low-carbon economy. It is certainly dispiriting to find that that need was not reflected in some of the loans that were approved recently by the World Bank.