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Oral Answers to Questions

Volume 528: debated on Thursday 19 May 2011

Energy and Climate Change

The Secretary of State was asked—

Green Deal

The Energy Bill, which was introduced to the House of Lords on 8 December 2010, contains the primary legislation of the new green deal proposal. Secondary legislation will allow the Government to implement and administer the requirements of the primary legislation and we intend to lay the secondary legislation before Parliament in March 2012 so that it will be in place to underpin the delivery of the green deal for October 2012. The timetable is naturally subject to the time taken for parliamentary scrutiny.

I thank the Secretary of State for his comments. What opportunities will the green deal provide for smaller, innovative and high-tech companies, and how many jobs will be available in that sector as a result of the green deal?

The green deal will, I think, be a real game changer. It will provide a framework that will enable billions of pounds of investment in retrofitting our homes and businesses across the country. Everywhere we have homes—that obviously means every part of the country—there will be new business opportunities. It is important to develop the supply chains in the energy saving industries, such as for solid wall insulation, and innovative products, as well as to reduce our dependence on imported energy. We are determined to ensure that small businesses can participate in the benefits that the green deal will bring.

The Secretary of State will know that his Labour predecessors, of which I was one, developed a similar ambitious programme for domestic energy efficiency, but because of the complexity of financing such deals, we believed that pilot projects were necessary and set them up, involving 500 homes. What has he learned from those pilots?

I pay tribute to the work done under the previous Government. The fundamental principles of the green deal are cross-party and I welcome that because it provides comfort to investors that they know there will not be a sudden change in the framework. I welcome the Opposition’s input on this.

On finance, we have had many discussions and looked at the results of pilots, including the British Gas pilot. The business model that we are proposing is particularly interesting because the key thing is that if some of the bigger players can get the cost of a substantial number of green deals off their own balance sheets they will be able to securitise flows in the bond market, which will provide a regular flow of cheap finance for all the green deal providers.

Consumer confidence will be vital for the green deal. In developing secondary legislation, we will support this by ensuring consumer protection and redress mechanisms are in place. For example, our licensing arrangements will require providers to work to a green deal code, which will require they use only accredited assessors and installers.

I thank the Secretary of State for that answer. I recently met the National Federation of Roofing Contractors to discuss my Apprenticeships and Skills (Public Procurement Contracts) Bill and people raised concerns about potential loopholes in the green deal, ensuring the right measures are selected for installation, ensuring the quality of installations, and accountability for the work. Will the Secretary of State explain what he is doing to close the loopholes in order to ensure consumer confidence?

My officials are in contact with a wide range of interests and I am happy to meet, and to ensure that my officials meet, the people the hon. Lady has mentioned. We obviously want to ensure that there are no loopholes and we have done a lot. The licensing arrangement and the green deal code, as I have mentioned, will be important. The Consumer Credit Act 1974 will extend to the green deal, and the golden rule that forms part of the green deal ensures that the expected savings will always at least match the costs. The Energy Bill includes strong requirements to disclose the presence of a future charge to bill payers and the accreditation process will also allow guarantees for the work carried out, for example. We will establish an independent advice line that will also support customers seeking redress. The hon. Lady should remember that all that is in addition to the normal protections for consumers through, for example, the Consumer Protection from Unfair Trading Regulations 2008 and the Unfair Terms in Consumer Contracts Regulations 1999.

My right hon. Friend will be aware that a number of places in the country, including Cornwall, are particularly ambitious to forge ahead with the green deal. Other than the constraints on the capacity of assessors and fitters, will any other impediments be faced by those parts of the country that particularly want to embrace this great opportunity?

I am grateful for my hon. Friend’s question. We are working through literally every possible impediment, as we are in other areas of the economy in which my Department particularly wants to see a transition to a low-carbon economy, to understand best what the impediments might be and to remove them. I am absolutely confident that when it comes to the launch of the green deal in October 2012 there will be enormous opportunities for Cornwall. The only constraint is going to be making sure that there are enough people who are trained properly to accredit, assess and install the green deal. I am confident that the finance will be available and it is important that we make as much progress as we can.

Consumer confidence is vital to ensuring that the green deal is a success. We know that Ministers were discussing possible incentives at around the time of the Budget to encourage green deal take-up and the Chancellor alluded to that in his Budget speech, but no concrete announcements have yet been made. Will the Secretary of State give us any further details today about how home owners and tenants will be incentivised in order for the green deal to meet the Government’s ambitions?

Under the terms of the energy company obligation in the Energy Bill, there is capacity for the companies that are subject to the ECO to bring forward incentives. The Chancellor has, as the hon. Lady pointed out, rightly made a commitment to consider incentivisation. She will also be aware that we made announcements on the Energy Bill’s Second Reading to bring forward some quite important incentives for the private rental sector, particularly for F and G-rated properties. All those measures will get the scheme off to a flying start.

My hard-pressed constituents in Harlow will strongly welcome the green deal, but how will consumers be informed how to apply for it and how it will work?

I think we will have a lot of interest from consumers precisely because of the important golden rule that this will benefit consumers—that the energy savings as a result of the green deal will outstrip the assessed costs of the installation. I think there will be a lot of buzz around the green deal. A lot of potential suppliers, such as B&Q, are very interested. As people move house and go to B&Q and look at what they might do for their kitchen or bathroom, they might also, at that point, have the opportunity to sign up for a green deal. I think it will spread very quickly through word of mouth, and that is why it is so important to get consumer confidence.

Energy Company Obligation

3. How much funding he expects to be made available to households in fuel poverty through the energy company obligation in its first year of operation. (56253)

The ECO is being designed specifically to tackle fuel poverty and hard-to-treat homes. Although it is too early to set exact numbers for the scheme ahead of our consultation on the ECO in autumn I fully expect a far greater level of resource to be brought to bear on the fuel-poor than was previously the case under the carbon emissions reduction target or Warm Front.

I thank the Minister for his reply. Parts of Blaenau Gwent are 1,200 feet above sea level and it gets cold in winter. Given the established relationship between excess winter deaths and low indoor temperature, and given that the UK has a higher rate of such deaths than Scandinavian countries, will he ensure that the ECO prioritises a reduction in excess winter deaths?

The hon. Gentleman raises a very important point. As I also sit on the Cabinet Office’s Public Health Sub-Committee, I am very aware of the issue he raises. That is why we are absolutely clear that the ECO must be focused on the fuel-poor and hard-to-treat homes and why we must have an impact on exactly the statistic that he mentions in relation to his constituency.

We have just heard twice from the Minister that the ECO will be used specifically to tackle hard-to-treat homes and fuel poverty, but unfortunately this week we have heard worrying rumours that the ECO will not be used exclusively to tackle fuel poverty and hard-to-treat homes. Consumer Focus recently estimated that to tackle just over a third of non-cavity-wall homes in the UK would require an ECO investment of more than £7 billion. That underlines the scale of the challenge that the ECO needs to meet. Will the Minister guarantee today that the ECO will be used only to tackle fuel poverty and hard-to-treat homes and not to subsidise banks providing green deal finance?

I do not think I could be clearer than to say that the focus of this new measure, unlike the CERT programme brought in by the previous Government, which we had to reform considerably when we came to office, will be on fuel poverty and hard-to-treat homes. We are absolutely clear about that and the measure is going to be much more effective than any measure that the Labour party introduced.

Renewable Heat Incentive

4. What contribution he expects the renewable heat incentive to make to the Government’s targets for greenhouse gas emission reductions. (56254)

We expect installations in industrial and commercial buildings to achieve cumulative carbon dioxide savings of 44 million tonnes of CO2 by 2020. It is harder to forecast reductions for the domestic sector, but we hope to achieve a cumulative reduction of at least 2.5 million tonnes by 2020 also.

I thank the Minister for his response, but I have one concern about the renewable heat incentive. We are proposing to introduce the premium payment scheme in July, which will run for 15 months until it is replaced by the green deal and the RHI tariff next October. Will he reassure people who are considering taking out the RHI premium payment scheme that they will automatically qualify for the RHI tariff when it is introduced next October?

I am extremely grateful to my hon. Friend for raising this important point, not least because we hope that more than 25,000 people will take advantage of the premium payments. Providing that they comply with the terms of the payment, they will certainly be able to qualify for the RHI tariff.

The Minister will be aware that there is a sort of hiatus in the industry at the moment among consumers, as the previous question from the hon. Member for City of Chester (Stephen Mosley) indicated, because they do not know what the tariff will be and we do not have an absolute commitment that its introduction will coincide with that of the green deal next October. Can he confirm that the tariff will definitely come in and, in the interim, at least let us have details of what it will be in order to restore confidence, the lack of which is currently holding the whole scheme back?

I can certainly assure the hon. Gentleman that the tariffs will kick in alongside the green deal in autumn next year and that we will publish the rates of the tariffs this September. Premium payments are a really good way of ensuring that we dovetail strong consumer safeguards while priming new technologies.

Green Deal

5. What steps he plans to take to ensure that householders who participate in the green deal scheme have access to an appropriate redress scheme in respect of any inadequate work carried out. (56255)

I refer the hon. Gentleman to the answer I gave the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) some moments ago.

I thank the Secretary of State for his response. Without proper consumer protections, the green deal will become a white elephant, so can he further outline how the Government will stop the scheme becoming a cowboys’ charter, with unscrupulous suppliers preying on the most vulnerable in society?

Mr Speaker, I think I tested your patience with the length of my previous answer to a similar question, so I will not go through the list again, but we have put in place a substantial set of measures that will allow redress, including an advice line and all the normal protections, such as the ability to go through the small claims court and to the energy ombudsman. All of those are available to consumers. I agree with the hon. Gentleman on one key point: consumer confidence in this scheme will be absolutely crucial. We do not want any repeat of the sorts of examples there were when the Labour Government in Australia introduced a similar scheme, which was indeed a cowboys’ charter.

What discussions has my right hon. Friend had with the Office of Fair Trading, which will regulate green deal providers, to ensure that credit is only offered responsibly?

The credit will be regulated under the Consumer Credit Act, but the provisions are very clear. I do not think that my officials have had direct contact with the OFT, but it of course has an important monitoring role to ensure that those rules are observed.

Why, oh why, can the Government not learn from past success, such as what happened in Huddersfield and Kirklees with Warm Zone, which was a highly successful scheme? Why can we not take the best elements of that and put them into the current legislation to get the best possible option?

We are absolutely determined to ensure that, where a local authority wants to lead from the front with neighbourhood schemes of the sort the hon. Gentleman has mentioned, they are enabled, quite rightly, to go ahead. They will have access to the finance available under the green deal and I very much hope that go-ahead local authorities, whether in his constituency, in Cornwall or anywhere else in the country, will lead this exercise, because there are enormous opportunities. That is good for residents, for energy saving across the country as a whole and for local jobs.

Green Deal and Renewable Heat Incentive

6. What assessment he has made of the likely effect on investment in green jobs and technologies of the green deal and renewable heat incentive schemes. (56256)

We estimate that the green deal could drive up to £20 billion of investment by 2020 and support more than 125,000 jobs across the supply chain. In addition, by 2020 the renewable heat incentive scheme should lead to up to £7.5 billion of new capital investment in heat technologies and potentially support 150,000 manufacturing, supply chain and installer jobs, not least in Worcester Bosch in my hon. Friend’s constituency.

Following the welcome decision of the regional growth fund to approve investments of almost £18 million in the Worcester technology park project, the one remaining hurdle for the creation of thousands of new green jobs in Worcester is the approval of the board of Bosch. What message would the Minister send to that board and to other overseas investors about Britain’s commitment to green growth and jobs?

My hon. Friend is a real champion of green growth, and I can tell him unequivocally that, although we have set an ambitious carbon budget, under this coalition decarbonisation must not mean deindustrialisation—far from it. We are committed to creating a framework for more advanced manufacturing jobs to power green growth and to make Britain once again a workshop of the world.

Why in the past year has Britain slipped from third in the world to 13th in terms of investment in green industry?

I am afraid that it will be very difficult to shake a legacy of 13 years of Labour government, and the hon. Gentleman will know that we slipped massively down the table of world manufacturing during his party’s time in government. We are having to put this country on a different trajectory, and that means a slight hiatus while we change course, but when we have changed course and our new measures are in place we will be primed for success and will turn around the miserable failure of the Labour years.

Carbon Capture and Storage

CCS has the potential to play a very significant role in our future energy mix. The Government are committed to public sector investment in CCS technology for four power stations, including both coal and gas. We aim to reach agreement on the first project and to launch the competition for projects 2 to 4 later this year. We will also publish a CCS road map this autumn.

I thank the Minister for that answer, but is he completely confident that the introduction of a carbon floor price will not result in the collapse of future investment in carbon capture and storage?

The hon. Lady raises an extremely important issue. We are actively discussing that with the companies involved in project 1, and we believe that we can find a way through it to ensure that those plants have a long-term viable future, but I hope she agrees that we are right to be making the future price of carbon clear.

As the former managing director of a risk rating agency, the Secretary of State must be well aware of the corrosive effect of uncertainty on any business, yet he refuses to give green energy the clarity it needs on carbon capture and storage. After the photovoltaic fiasco, the “carbon four” coup and the building regulation bombshell, has he lost all credibility among the green industries?

That is a quite extraordinary question. The Secretary of State has shown real leadership on those issues. In the course of a year, £1 billion not previously available has been made available for carbon capture; we have set up an office of carbon capture and storage to drive forward that work; we have set up a development forum with the industry; we have put in place a regulator framework; and we are putting in place a road map in order to know what needs to happen. In place of the rhetoric and ambition under the previous Government, we are delivering action.

Eco Island Initiative

I recently visited my hon. Friend’s constituency and met several businesses and individuals involved in the Isle of Wight eco island initiative. I applaud the initiative, which is showing real leadership in bringing the local community and businesses together, in reducing carbon emissions and in helping to build a prosperous low-carbon economy.

Will the Secretary of State join me in congratulating David Green on the way in which he is moving the eco island initiative forward, and will my right hon. Friend visit the island again to see for himself not only the eco island project, but other green technology companies?

I am grateful to my hon. Friend for that question. As he knows, I can see the island from my constituency, and I suspect that another visit is not going to be that far off, but I certainly do join him in congratulating David Green. The Department of Energy and Climate Change has been very pleased to support carbon reduction on the Isle of Wight with a £500,000 grant, for example, through the low-carbon communities challenge, which has been used to install renewable measures in a number of properties in the village of Chale Green. I am very impressed by the way in which the whole initiative is beginning to take off and to have a real local impact.

Electric Vehicles

9. What recent discussions he has had with the Chancellor of the Exchequer on any fiscal incentives to support achievement of the Committee on Climate Change’s target number of electric vehicles in 2020. (56260)

Fiscal incentives are a matter for the Treasury, but DECC has a strong interest in encouraging the take-up of electric vehicles. We work closely with the Department for Transport, which has lead responsibility for the policy, but we regularly meet companies leading the development and deployment of cutting-edge low-carbon vehicle technologies.

Electric cars will play an important part in reducing carbon emissions, they are an important part of green growth, and they can reduce the costs of motoring for our constituents. The Committee on Climate Change has called for 1.7 million electric cars by 2020—quite a lot fewer than Japan and Israel. How does my hon. Friend see us meeting that target?

My hon. Friend is a powerful advocate for this agenda and speaks with considerable authority. He will know that in the last comprehensive spending review we announced over £400 million of measures to promote the take-up of ultra low-carbon vehicles, in addition to exempting them from road tax, company car tax and the congestion charge, and now we have a consumer grant of up to £5,000 per vehicle and a £30 million investment in infrastructure. Then, on top of that, later this summer, in line with the coalition agreement commitment to mandate a national recharging network, we will be publishing a strategy for promoting the roll-out of charging infrastructure.

I will resist the temptation to ask whether it is easier to stay within the speed limit in an electric car. Instead, I will ask what is the best way to make electric cars more efficient in their use of energy given that the electricity still has to be generated and that we still rely on burning fossil fuels for much of our energy.

Ultimately, it will be the decarbonisation of the energy sector that will ensure that electric cars become genuinely low or zero-carbon vehicles. With the publication of the fourth carbon budget, we now have the long-term trajectory in place to ensure that we reach our ambitious decarbonisation goals.

Independent Fuel Poverty Review

My right hon. Friend the Secretary of State has asked Professor Hills of the London School of Economics to lead the independent fuel poverty review and to provide interim findings by this autumn and a final report by early 2012 at the latest.

I thank the Minister for that reply. I understand that the author of the report has been asked to demonstrate how fuel poverty can be removed entirely within 15 years. Many constituents of mine live in homes that are off mains gas and are hard to heat. Will the green deal have enough capacity to meet that target and eliminate this scourge of rural areas?

Absolutely. The rural fuel-poor, who for many years have been overlooked by fuel poverty policies, and who suffer particularly from high heating-oil prices and from hard-to-heat homes, will particularly benefit from the green deal and from the renewable heat incentive. Under the coalition, it is a double win for the rural fuel-poor.

As the promoter of the Warm Homes and Energy Conservation Act 2000, my hon. Friend will understand my disappointment that fuel poverty has not been eliminated. Will he take the opportunity, through the Committee and Report stage of the Energy Bill and through the green deal, to ensure that a clear delivery plan is enshrined in legislation to eliminate fuel poverty?

That piece of landmark legislation, which my hon. Friend got on to the statute book having had long experience in these matters, will be an important part of our strategy for delivering a green deal programme that will bear down on and eventually eliminate fuel poverty. I can assure him that unlike the Labour Government, who allowed the Home Energy Conservation Act 1995 to languish on the statute book and be frittered away, we will ensure that the legislation is used effectively and that there is far greater co-ordination and collaboration between local government and us at the centre.

When the Warm Front scheme is closed down, it will be the first time in 30 years that there has not been a Treasury-funded scheme to tackle fuel poverty, which is a major problem in constituencies such as mine. Will the Minister do all he can to persuade the Treasury to take its fair share of the cost of cutting poverty so that the full funding burden is not regressively applied to energy bills, thus hitting the poorest hardest?

Sadly, we know that in the past Warm Front has not been effective. Let us face it, more than 90 Members from all sides of the House, including Labour Front Benchers, have written to me to complain about it. Were we to carry on relying on Warm Front alone, it would take more than 80 years to treat homes which, under the green deal, we expect to treat by 2030. I have to say to the hon. Lady that there is funding next year, the year after and the year after that for Warm Front, but the real driver for eliminating fuel poverty will be the green deal and the ECO that underpins it.

What action does the Minister propose to take to ensure that the energy company obligation does not put more people into fuel poverty, as a result of the effect that the imposition of the levy will have on their bills, than it takes out? Will he consider rising block tariffs as a method of imposing levies, rather than an imposition on standing charges, which would have a particular effect on those in fuel poverty?

The hon. Gentleman speaks with great authority on this subject and is recognised as an expert, but we have considered block tariffs and do not believe that they are effective. The warm home discount is available, however, which will be worth more than £1 billion to the fuel-poor over the spending period. We expect it to help up to 2 million households a year. His point about levies is well made, and we have paid particular attention to that issue. That is why, unlike under the Labour proposals, the RHI will be funded out of general taxation, which we believe will be more progressive.

Offshore Wind Farms

Offshore wind is currently supported under the renewables obligation, and we have brought forward the banding review to determine future support to realise the full potential of this vital sector. Through electricity market reform, we are working on more enduring support for low-carbon electricity generation and we will publish a White Paper before the summer recess. I chair the Offshore Wind Developers Forum, which is working to identify barriers that need to be addressed.

According to the Government’s figures, by 2020 they expect there to be 14 GW of onshore wind capacity and 13 GW of offshore wind capacity. My constituents and, I suspect, many Members in this House would like there to be far more wind turbines offshore than onshore, because it is windier offshore and offshore wind turbines do not despoil the British countryside.

My hon. Friend has picked up on one of the five or six scenarios that we put forward on how we can meet our 2050 targets. I understand his concerns, but we also have to take account of cost. Offshore wind costs about twice as much as onshore wind. We need to be aware of the interests of consumers, who have to pay the bills.

The Committee on Climate Change has said that the Government should reduce by several gigawatts their target of a 13 GW capacity for offshore wind electricity generation by 2020, precisely because of that expense. Will the Minister assure the House that if that target is abandoned, he will do all he can to ensure that onshore wind farms are not blocked by nimbyism in Tory and Lib Dem-controlled councils?

The hon. Lady raises an issue that is of concern to Members from all parts of the House. There is a realisation about the impact of onshore wind farms. We want there to be more onshore wind farms, but we are determined to ensure that they are built in the most appropriate locations and that there is support for the communities that host them.

My hon. Friend will be aware of the good news that the Danish company, Vestas, has announced its intention to set up a wind turbine factory in my constituency, which will create 2,000 much-needed jobs. However, the project is conditional on a number of factors, including the Government delivering stability in the market, and long-term political and regulatory certainty. What assurances can my hon. Friend give Vestas to help us seal the deal and turn that good news into very good news?

My hon. Friend highlights one of the investment opportunities that is coming through as a result of our approach of wanting a supply chain industry to develop for the offshore wind sector in this country. That news is very encouraging. I reassure Vestas that the area of Sheerness has a dedicated and able work force, an absolute champion in its Member of Parliament, and a supportive Government who want to see this matter move forward.

The Opposition share the Minister’s ambitions on offshore wind, which is no surprise given that it is our policy as well, and on renewables generally. How does he react to the news that renewables investment in the UK plummeted by 70% last year under the coalition Government; that we have dropped from third to 13th in the global rankings for renewables investment; and that a report on the coalition’s green promises shows little or no progress on three quarters of its promises? What now for the greenest Government ever?

The hon. Gentleman will be aware that the funding mechanism of renewables obligation certificates that we inherited has a cliff edge in 2013, and we have tried to give investors certainty beyond that point. It is clear that in the case of many renewable technologies, people have been unable to build structures because the system was to change in 2013. They did not know what the regime was going to be afterwards. That is why we have brought forward the banding review—to give investors long-term certainty and introduce market reform at the same time.

Gas Supply

12. What recent assessment he has made of the security of the UK’s gas supply; and if he will make a statement. (56263)

The statutory security of supply report, published in November, is a joint report of the Department of Energy and Climate Change and Ofgem. It gives a full account of the Government’s latest assessment of the availability of gas to meet the reasonable demands of United Kingdom consumers. It concludes that the outlook for gas supplies is broadly benign but not without risks. The Government keep security of supply under constant review and have proposed measures in the current Energy Bill to further enhance our gas security.

I thank the Minister and accept that the gas supply is a vital part of our future energy needs, but will he reassure me and, more importantly, my constituents that their concerns and their safety will remain paramount considerations in decisions on gas storage sites?

I can absolutely assure my hon. Friend that security and safety are priorities for the Government in developing gas storage facilities. We do need more such facilities; a number are under construction and a number more have been given consent. The planning process will ensure that safety issues are a priority in that work.

Does the Minister accept that the £2 billion robbery of taxation from the North sea oilfields is now threatening the gas supply from that area? Total has told me that it would not have invested in the west of Shetland area if it had known about that tax. The Treasury’s latest proposal to tax every flight that a person takes out into the North sea will further threaten supplies. Will he intervene with the Treasury to stop it robbing North sea oil?

The hon. Gentleman talks about a robbery. I assume that he is going around telling his constituents that he would rather the Chancellor had not reduced fuel duty and cancelled some of Labour’s planned rises. We are determined to ensure that there is ongoing investment, and there is discussion with the Treasury about field allowances. The helicopter issue that he mentions is in a consultation document, which will take its proper course.

National Policy Statements

As my right hon. Friend the Secretary of State said in his statement yesterday, we are carefully considering Dr Weightman’s interim report on the implications for the UK of events at Fukushima. Subject to that, we intend to lay the energy national policy statements before Parliament as soon as possible.

In the extra time that the Minister probably now has available, will he consider giving greater consideration to the local economic benefits of nuclear power stations in the site-specific report, with particular regard to Dungeness and Romney Marsh in my constituency?

My hon. Friend is a doughty champion of the case for Dungeness. We have examined carefully the evidence that has come forward, and we will publish it when the relevant documents are republished very shortly. He will have to be patient for a little longer, but I assure him that we have given every attention to the evidence that has been presented to us.

Yesterday we heard the Secretary of State say that the national policy statements would be published shortly, and the Minister has repeated that today. With the stringent targets in the fourth carbon budget and the previous three, businesses need certainty if we are to meet our carbon reduction targets. Will the Minister be more precise and tell us exactly when the Department is planning to publish—not just “shortly”, but a date?

The hon. Lady will be aware that given the nature of the report provided by Dr Weightman yesterday, it would be wrong to make premature and rushed conclusions. We have to go through the right process. We are in the current situation because the national policy statements that the last Government published contained a massive flaw that required them to be consulted upon again. We have had to go through that process, which has involved extra time and delay. However, we will bring them forward for full parliamentary scrutiny in the next few weeks.

Onshore Wind Energy

Onshore wind energy is one of the most cost-effective renewable energy sources. The Government are committed to the growth of well-sited onshore wind in the UK as part of a diverse energy mix, but we will put greater emphasis on ensuring that investment goes where the resource is strongest and bringing more direct benefits to communities that host wind farms.

The Localism Bill will allow communities in England to take a far greater part in the planning process. What assurance can the Minister give those of us in west Wales that the same opportunities will be open to us?

As my hon. Friend will be aware, that is a matter for the Welsh Assembly Government. I hope that they will look carefully at the detail of the Localism Bill to see our determination to bring real benefit to communities through the planning changes in England, and I hope that they will decide which of the measures in the Bill might be appropriate to bring similar benefits to people in Wales.

Energy Bill (Consumer Protection)

17. What recent representations he has received on the level of consumer protection afforded by provisions of the Energy Bill. (56268)

Robust consumer protection is at the heart of the green deal, and will be enshrined in the Bill’s provisions. Further details will be spelt out in secondary legislation later this autumn.

I listened carefully to what the Minister said earlier about redress being open to individuals through, for example, the county court, but I am pleased to hear that he recognises the importance of good, strong consumer protection set out in regulations. I very much hope that the Government introduce that and provide robust protection for consumers.

The hon. Lady makes some very good points. I am pleased to say that although we will publish the details later in the year, before the Bill is in Committee, I shall place in the House of Commons Library a paper summarising our approach to regulation and send her a copy.

Energy-intensive Industries

18. If his Department will undertake an impact assessment of the effect of energy regulation on the competitiveness of energy-intensive industries. (56269)

The Government intend that UK-based energy-intensive industries will play a full part in, and benefit from, the transition to a low-carbon economy. My Department is working with the Department for Business, Innovation and Skills to develop measures to help to improve energy efficiency and reduce electricity costs for such important companies. As my right hon. Friend the Secretary of State announced on Tuesday, further announcements will be made by the end of the year.

I thank the Minister for that reply, and may I also thank the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), who has responsibility for climate change, for the Government’s decision to support the ceramics sector in Brussels today?

Businesses in my constituency welcome the Department for Business, Innovation and Skills-Department of Energy and Climate Change working party on energy-intensive industries, but will the Minister ensure that it focuses on international competitiveness, because our energy-intensive businesses simply cannot pass on unilateral energy costs in a global marketplace?

I thank the hon. Gentleman for his question, and for the work that he is doing to raise those important issues in the House and in the new parliamentary Committee. Without any doubt, we are profoundly concerned about the risk of carbon leakage. It would be absolutely absurd for British companies to move overseas, taking jobs with them, only for us to continue to import those products and for carbon emissions to go unabated or even worse in other parts of the world. That is why there is such clear, joined-up thinking between DECC, the Treasury and BIS to ensure that we come up with a comprehensive range of measures to support those critical industries.

Tidal Energy

Following a two-year feasibility study, the Government concluded that there was not a strong case for public investment in a Severn tidal power scheme in the immediate term. However, that does not preclude a privately financed scheme coming forward in the meantime, and we are actively talking to developers about their plans for various tidal energy schemes in the Severn.

The Government have decided against the Severn barrage, but it is important that we do not lose the impetus to harness tidal power in the Severn. Will the Minister give more detail on any discussions he has had with the Welsh Assembly Government on alternative plans? How far advanced are they?

I cannot give details of commercially confidential discussions, but we are encouraging developers to come forward with a range of proposals and looking to be as helpful as we can. The primary barrier to the previous proposal was the £34 billion cost, which in the current circumstances just did not seem feasible. However, we are trying to create a constructive framework for other, private proposals, and I would be happy to discuss the matter in more detail with the hon. Lady.

Green Deal

The Energy Bill, which was introduced to the House of Lords on 8 December 2010, contains the primary legislation for the new green deal proposal. Secondary legislation will allow the Government to implement and administer the requirements of the primary legislation. We intend to lay the secondary legislation before Parliament in March 2012, so it will be in place to underpin the delivery of the green deal for October 2012. That timetable is naturally subject to the time taken for parliamentary scrutiny.

If I may clarify the answer I gave to the hon. Member for North West Leicestershire (Andrew Bridgen), I am informed that some DECC officials have indeed spoken to the Office of Fair Trading about the provision of credit for the green deal, and we have an ongoing engagement.

When the green deal is rolled out, will my right hon. Friend ensure that the green deal MOT on domestic properties focuses not only on insulation, but on smart metering and energy-efficient boilers, so that customers in my constituency and around the country get the most energy-efficient and bill-cutting green deal?

I am grateful to my hon. Friend for that question, because very substantial incentives to install renewable heat solutions are available under the renewable heat incentive, alongside the green deal. The green deal itself will deal with insulation, but I confidently expect that many of the providers will offer heat solutions alongside that, which is very important.

I am concerned about the delivery of the green deal, especially in the private rented sector. How does the Secretary of State expect compliance to happen in this sector, which seems to be quite evasive? For example, will he expect local authorities to keep a register of landlords in their area as part of the delivery mechanism?

We have announced that we intend to regulate the private rented sector so that there will be a clear prohibition on letting F and G-rated homes in the future, and that will provide a clear target for the private rented sector to go ahead. All of the normal means of enforcing this will be available through local authorities, but we will bring forward further measures in secondary legislation.

Climate Change Legislation

22. What his policy is on recognising national climate change legislation as a commitment under the United Nations framework convention on climate change. (56274)

Domestic legislation is desirable and demonstrates political commitment at country level. However, the UK Government believe that an international treaty is still the best and most credible way of promoting ambitious mitigation action at a global level.

I thank the Minister for his answer and agree with the point he makes, but does he agree with me that it is important to encourage and recognise national legislative action and that the global legislators’ organisation, GLOBE, should continue to bring legislators together to catalogue and push for greater action at national level in lieu of international agreement?

Absolutely, and in the absence of a global treaty, the work that GLOBE does—and my hon. Friend does very valuable work as vice-president of GLOBE International and president of GLOBE UK—including its recent study of global climate change legislation, is extremely valuable, and we certainly support it and would encourage it to go further.

Topical Questions

My Department works to secure clean, affordable energy supplies and action on climate change. Last week, the Energy Bill received a Second Reading in this House. It contains provisions for the green deal, our flagship piece of legislation, which will deliver energy efficiency to homes and buildings across the land. On Tuesday, we announced the fourth carbon budget, setting an ambitious target for UK emissions reductions. We are now the first country in the world to publicly commit to cutting carbon well into the next decade, and I have today published the summary of conclusions of the Ofgem review.

Given the current drilling by Cuadrilla at Blackpool, is the Secretary of State confident that extracting shale gas in the UK will not lead to the contamination of water supplies?

I am grateful to my hon. Friend for that question. The UK has a robust regime and it is important to recognise that we intend to ensure that shale gas operations are carried out in a safe and environmentally sound manner. Shale gas exploration has been controversial, especially in the United States where regulation has not been well implemented, but here it is subject to a series of regulatory checks, including planning permission, health and safety checks, consultation with the Environment Agency and drilling consent from my Department. The Environment Agency in particular has scrutinised Cuadrilla’s plans thoroughly and does not consider that they pose a significant risk to the environment, including to water resources.

In the last period, lending to small and medium enterprises dropped by 2%, so Project Merlin is not delivering—the Prime Minister has spoken on this. We know the importance of the green investment bank and of the need to get green businesses to grow—that is the subject of cross-party agreement. So why will the green investment bank not lend to small businesses?

The exact remit of the green investment bank has still to be announced and I urge the hon. Lady to wait for that. We have said that it will be built up and able to borrow and lend from April 2015. That will be the most significant point, because at that point it will be able to provide finance for some of the biggest investments in the renewable sector in particular. My Department is acutely aware of the importance of encouraging small businesses and we intend to do so.

Once again, we hear warm words from the Secretary of State but no action. Many small businesses will be out of business by 2015 and we will have lost that opportunity for technological development in the UK backed by the green investment bank.

On a wider point, we have heard rumours in the newspapers about what the green investment bank will be and the Secretary of State has just talked about a future announcement. Will he announce it to the House himself, or will he leave to the Deputy Prime Minister to make a speech in some other place about what will happen with the green investment bank?

I should point out to the hon. Lady that the lead Department on the green investment bank is the Department for Business, Innovation and Skills, so my right hon. Friend the Business Secretary will be making the formal announcements. That will happen in due course.

T2. Will the Secretary of State tell me a bit more about what he is doing to encourage and support the clean-tech industry, including the excellent companies around Cambridge, such as AlertMe, which monitors energy efficiency, Econovate, which is involved in sustainable construction, and Eight19, which is developing novel solar technologies? (56278)

Earlier this year, I visited the SmartLIFE centre in Cambridge and met almost a dozen clean-tech companies from my hon. Friend’s constituency. I was impressed not just by the pioneering technologies that one would expect from a city with Cambridge’s record on innovation, but by how these ideas are being turned into thriving businesses. I understand that the SmartLIFE low-carbon centre is expanding this year to provide the skills and training facilities needed for low-carbon qualifications. It is an exciting development.

T3. Almost one in four households in the north-east is living in fuel poverty, which is the highest proportion in England. The Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) said earlier that the energy company obligation will rightly focus on fuel poverty. However, can the Secretary of State rule out its being used to subsidise banks providing green deal finance? (56279)

There is absolutely no intention, and nor would it be possible, to use the ECO to subsidise banks. I am confident about that because unlike the Warm Front scheme, which Labour championed, the green deal provisions enable residents, having had a survey, not merely to go to the provider that did the survey, but to take that survey and get one or more alternative quotations. The introduction of competition into the process will guarantee that the subsidy goes to where it is needed—towards a reduction in carbon emissions and improvements in energy efficiency—not to providers, be they people in the industry or the banks.

T6. The Middlewich company, Convert2Green, in my constituency, recently won the East Cheshire chamber of commerce environmental company of the year award. It converts used cooking oil, which would otherwise go into drains or landfill, into biodiesel for use in vehicles and elsewhere. The 20p duty differential for biodiesel has helped it to develop its innovative processes. What assessment has the Department made of the contribution of the 20p duty differential to the UK’s renewable energy targets, and what are the Government’s future plans for the differential? (56282)

I join my hon. Friend in congratulating the company involved. The recent quarterly renewable transport fuel obligation report gives clear evidence on the effectiveness of the 20p duty differential for biodiesel derived from used cooking oil in assisting the Government to exceed their greenhouse gas savings target, and in increasing substantially the retrieval of waste cooking oil, which otherwise would literally be poured down the drain or go to landfill. The differential has therefore made a valuable contribution to the Government’s renewable energy targets and waste strategy, and to the growth of the low-carbon economy.

T4. The Government’s announcement of a minimum energy efficiency standard for private rented homes is welcome, but the hundreds of tenants in Nottingham living in cold, damp F and G-rated homes should not have to wait until 2018 for it to be introduced. I heard the Secretary of State’s reply to my hon. Friend the Member for Hyndburn (Graham Jones), but would the legislation not be more effective if a register of landlords was introduced so that they can be informed about the new standard and directed to information about the green deal and other measures that might help them to improve their properties? (56280)

The hon. Lady is right that we are taking action to ensure that the private rented sector enjoys the full benefits of the green deal, but she is wrong to assume that tenants will only learn about this from a council information leaflet or some regulated communication. The most powerful element in driving the green deal forward will be the market, the new competition, the big retailers and the new entrants into the market. That will create a huge wave of interest across the country in all sectors.

T8. I am sure that my right hon. Friend would agree that in making the case for the green new deal, we must bring local communities with us. Onshore wind turbines are controversial in many rural communities. If we are not careful and if local authorities push ahead with wind turbines without considering other options, we run the risk of losing the support of some of our rural communities. Does he agree? (56284)

I am grateful to my hon. Friend for his question. As the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) pointed out earlier, onshore wind is the cheapest source of renewable energy, and we have to take account of affordability. I should also say that there are many local communities the length and breadth of this country that actually want to install onshore wind turbines. It is not always the case that they are unpopular. Indeed, the most attractive and regularly visited tourist feature in my constituency is the Bursledon windmill. It is, admittedly, slightly older than many wind turbines, but it works on exactly the same principle. Bursledon windmill is beautiful, and many of the wind turbines that we are installing are beautiful too.

T5. The Secretary of State will be aware that the Renewable Energy Association has described the proposed tariff changes for solar photovoltaic installations over 50 kW as an “horrendous strategic mistake”. If he goes ahead with the changes, how do the Government intend to support decentralised local community energy generation in future? (56281)

I am afraid that the horrendous strategic failure was made by the last Government, who failed to put any sensible financial controls on the feed-in tariff scheme. There is plenty of scope for new innovative community schemes to take shape. Indeed, I visited one only last week in the constituency of my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), and I look forward to visiting many more. We want a big push forward in decentralised energy schemes. Solar is a great technology, but it has to be affordable. We need proper controls that do not blow the budget, which is what would have happened had we not taken action.

Most of the climate change debate tends to focus on mitigation and decarbonisation, but it is also important to work on adaption, such as how we respond to pressures on water supply. What plans are the Government putting in place at home and abroad to cope with the increasing pressure and also to promote new water filtration technologies, such as that promoted by FilterClear, an innovative company in my constituency that is creating green jobs and British exports, and promoting the more efficient use of water?

The hon. Lady is absolutely right. There are opportunities for green growth and innovation right across the economy, and a lot that we can do in the water sector in particular. However, that is a matter for the Department for Environment, Food and Rural Affairs, which is looking carefully at how we develop the green deal. Indeed, it is possible that we could see a similar programme offered in due course—perhaps a blue deal—to ensure that water-saving measures are funded in the same way. However, she is absolutely spot-on in realising the huge potential that exists.

T7. Has there been any discussion about the geographic spread of carbon capture and storage demonstration projects? The Minister will be aware that there are a number of proposals in Scotland. Is it possible that two or even three of them might be allowed to go ahead? (56283)

The hon. Lady raises an extremely interesting point. Clearly there is an interest in sharing infrastructure, rather than everybody rebuilding their own, for CCS to go forward. We are putting forward seven schemes to the European funding mechanism —the NER300—which is more than any other country in Europe. Some schemes are geographically close to each other and some are further apart. However, they will be chosen on their merit, and there is a lot of work being done to ensure that the infrastructure costs are shared wherever possible.

Ofgem’s retail market review finds that many consumers are not getting nearly as good an energy deal as they could, and that includes too many of the poorest and most vulnerable. We have a diverse and dynamic market. That is a good thing, but it also means complexity, with more than 300 different tariffs available, 50% more than a year ago. Does my right hon. Friend agree with Ofgem’s proposal to simplify things and make it easier for consumers to compare prices and get a better deal?

I am grateful to my hon. Friend, and I am extremely enthusiastic about the thrust of the question. I am delighted that Ofgem is looking at this issue, because as we have known ever since the middle ages—if not before—if a market is to work effectively, we need common weights and measures, so that people can compare prices in the marketplace properly, and that is exactly what tariff simplification would enable them to do.

Fifty per cent more CO2 emissions savings could be made in the transport sector by adopting Greener Journeys’ ONE Billion challenge for a modal shift. Will the Minister look into the efficacy of the scheme and discuss the proposal with his counterpart at the Department for Transport?

I am not familiar with the details of the scheme that the hon. Gentleman has mentioned, but I will certainly look into this and I would be happy to communicate with my colleagues at the Department for Transport.

Can the Secretary of State remind the House how much energy was contributed to the grid by onshore and offshore wind last December—one of the coldest periods of time on record?

I am grateful to my hon. Friend for that question. What he is really asking is: does wind help when it is not blowing? Any Energy Secretary has to deal with the nightmare possibility of six cold, still days in February when the wind is not blowing but we all still need electricity. It is important for him to remember, however, that the energy sector has always had to deal with variable demand. That is why plant is often built to back up other plant. An example of the enormous variation in demand is when we all go and put our kettles on during the advertising break in “Coronation Street”. At that point, we need to bring on massive amounts of electricity generation. That is exactly the same principle, so my hon. Friend’s point is by no means a killer criticism of wind. Wind has a very important contribution to make to the national grid, and we intend to ensure that it continues to do so.

Compliance with environmental legislation places a huge burden on companies such as Rio Tinto Alcan in my constituency. It will wipe out profits in excess of £50 million, come 2013, and it could jeopardise 650 jobs. What measures are the Government putting in place to protect jobs in that type of industry?

The hon. Gentleman is absolutely right to raise this matter. It is crucial that we bring forward proper measures to deal with energy-intensive industries of the sort that he mentions. In fact, we have had contact with Rio Tinto Alcan, along with many other energy-intensive industries, on exactly these issues. As I announced earlier this week, we are committed to working jointly with the Department for Business, Innovation and Skills to bring forward a package of measures to ensure that energy-intensive industries have a thriving future in this country. There are a number of ways in which we can help, including free allocation under the emissions trading scheme or conversion to biomass, which is also an important option.