The Secretary of State was asked—
Green Investment Bank
I regularly discuss the Green investment bank with ministerial colleagues, including the Secretary of State for Business, Innovation and Skills, and am confident that it can play a major role in capitalising private sector investment in renewable energy.
I thank my right hon. Friend for his answer and welcome the Chancellor’s announcement in his autumn statement earlier this week of £200 million in incentives to support the green deal. Will the Green investment bank be able to back up that important investment and provide low-cost loans to support the green deal?
Supporting energy efficiency projects is indeed part of the Green investment bank’s remit, and clearly that includes the green deal. We can certainly envisage a key role in the launch of the private finance, because after all the green deal is private finance, but at the very beginning it will be important that the markets gradually get used to the idea of that new type of instrument, and the Green investment bank could have an important role in facilitating that.
I am glad to hear that the Secretary of State is discussing the issue with colleagues. When will a decision on the location of the Green investment bank be made, and when will it be up and running for business?
The first investment should be made in the spring of next year. The location will be a matter first for the advisory board, whose advice I also anticipate will be available next year. The hon. Gentleman will bear it in mind that the Department for Business, Innovation and Skills is leading on this.
The coalition agreement emphasised anaerobic digestion as a technology to take forward, yet many people who are keen on it find obstacles in their way, including funding. Will the Green investment bank be able to provide funds for those people so that they can take their projects forward?
I thank my hon. Friend for his question. He is right that anaerobic digestion is one of the technologies that we want to encourage. Indeed, it falls broadly within the renewables remit of the Green investment bank, but my understanding of the problems with anaerobic digestion is that they relate principally to planning and objections, rather than funding. Funding is not the key issue with AD.
As we heard on Tuesday, because of the Government’s cuts, which are going too far and too fast, the economy is flatlining, unemployment is rising and the Government will miss their borrowing targets. In his autumn statement the Chancellor lauded the Green investment bank as proof of his green credentials, but on 9 September the Government confirmed in a written answer that the Green investment bank would have full borrowing powers only from April 2015, subject to public sector net debt falling as a percentage of GDP. Will the Secretary of State confirm that the Government’s policy is that we will not have a proper Green investment bank with borrowing powers until 2016 at the earliest?
I thank the right hon. Lady for her question. When the Green investment bank will be able to borrow has been set out clearly from the beginning. She wants to make the point that the borrowing powers of the Green investment bank are delayed, but the reality is that we are the only leading industrial country never to have had an infrastructure bank, despite the common experience of the 1930s and despite 13 years of Labour government. I very much hope that we will meet the net debt-to-GDP target as soon as possible, and when we do the GIB will be able to borrow.
I am sorry, Mr Speaker, but I do not have the answer to the question.
Thank you, Mr Speaker. I was under the impression that the question had been withdrawn, but I am happy to answer my hon. Friend.
We have had a number of discussions with energy companies, most recently the energy summit, in which we discussed consumer pricing.
I thank the Secretary of State for his response. I am concerned about the extent of savings that are offered to the internet savvy and subsidised by offline customers. Given the digital divide, with many of the poorest households and older customers not having internet access, what action is he taking to ensure that everyone pays a reasonable price for their energy?
One of the key issues is that people who do not have online access should be able to get sources of advice that enable them to take advantage of cheaper tariffs. That may be people who are elderly or not necessarily able to get online, and one of the things that we are attempting to do is to encourage charities in the sector and organisations such as Citizens Advice to provide help when it is not forthcoming from family members. They are also a very important way of helping the elderly to move on to cheaper tariffs, however, and I know that a lot of family members do take the time to ensure that elderly members of the family get cheap tariffs.
Energy pricing affects our industrial competitiveness, so although I welcome the Government’s steps in the autumn statement on energy-intensive industries, I note the real concern in the ceramics sector that such steps will do nothing to assist it. Will we see further announcements in the coming weeks for industries such as ceramics, particularly on capital allowances?
One key thing with the energy-intensive industries is that it is crucial to help those that will be most affected because of electricity intensity and their competitive position in terms of trade. We will set out the full details of that in the consultation.
The Minister will be aware that one recommendation of the billing stakeholder group was that energy suppliers should send a tailored communication to customers, detailing in pounds, shillings and pence how much they could save by transferring to that company’s cheapest standard direct debit tariff in time for this winter. Two suppliers, Scottish Power and npower, have complied; four have not. Will the Minister now look at bringing those four into line?
First, I pay tribute to my hon. Friend for his work on the issue, because it is crucial that people are provided with clear and specific advice on what they can do. He is absolutely right to draw attention to the two large energy companies that have already complied, and yes, indeed, we are bringing pressure to bear to ensure that all the others follow.
Will not energy companies benefit from pricing at the expense of companies such as Energy Outlet, in Formby in my constituency, which has lost business due to the cuts in support for solar energy, and that consumers will also lose out due to the change that the Secretary of State has made at short notice?
I simply do not agree with the hon. Gentleman, who argues that consumers will lose out from the measure. If we had not acted quickly to deal with cost overruns in the sector, not only would we not have been able to provide a sustainable future for those who are employed and have businesses in it, but we would have added so substantially to consumer bills that the impact on many other businesses right across the country, through reduced consumer spending, would have been substantial.
Domestic Energy Costs
We expect the warm home discount scheme to help about 2 million low-income and vulnerable households per year. This winter, energy suppliers will be required to provide automatic rebates of £120 on energy bills to more than 600,000 pensioners on the pension credit guarantee. In future, the green deal and the energy company obligation will provide energy efficiency measures at no up-front cost.
The Minister will be aware that the Secretary of State, at the Liberal Democrat conference just a few weeks ago, said:
“None of us should have to save on warmth in a cold winter. Some of the most vulnerable and elderly will shiver—and worse—if we do not help.”
Why then does he believe that the Government should cut winter fuel payments to 12.7 million pensioners?
The hon. Gentleman will be completely aware that that policy was announced by the previous Government, who did not put the money into their budget for it to go forward. We have therefore continued the policy that was put in place, but we have introduced the most rigorous scheme of energy efficiency in our homes—rolling it out in a way not even dreamed of by the previous Administration—to bring lasting help and care to support such people.
Twenty-eight per cent. of households in the west midlands live in fuel poverty, and one of the key issues for them is the quality of the housing stock in which they live. Obviously, the poorer the housing stock, the more difficult it is to heat. What specific support are the Government giving to help those in private rented housing, which is often not invested in by landlords and often very fuel inefficient?
The hon. Gentleman makes a very important point. That is why the green deal has focused very strongly on those in the private rented sector and why we are considering introducing a legal obligation on private landlords to ensure that their homes are brought up to a reasonable standard. This sector has often been overlooked and has been harder hit than many others, and we are determined to make sure that it is now addressed properly.
My hon. Friend rightly draws attention to the warm home discount, which is up by two thirds as a result of the decisions we have made, whereby £120 million will be spent supporting 600,000 poorer pensioners. The energy companies are writing directly to many of their customers—and we, as a Government, are writing to millions of others—to make sure that they are aware of the extra energy efficiency support that they can have.
My hon. Friend raises the important issue of whether people should pay more for the additional units they use or whether the level should drop. Our concern about moving to a rising rate is that children, pensioners or people with disabilities who are at home more and need more warmth could be adversely hit by such a change. Not only the larger properties and the richer families would be affected; it could easily also affect those whom we are most keen to support and help.
Does the green deal Minister remember telling the Energy Bill Committee that he fully expected the energy company obligation to provide a far greater level of support to tackle fuel poverty than either the carbon emissions reduction target or Warm Front? In what way is ECO’s pitifully small £325 million a year for fuel-poor homes a far greater level of resource than the 2010-11 Warm Front spending of £370 million or CERT spending of about £600 million on priority groups?
I am sure that the hon. Lady is aware that this is funding that people can have in addition to the green deal support. It is designed to make sure that there is a comprehensive approach. We have sought to ensure that we have an holistic approach and that we do more on energy efficiency and on assisting poorer households. We are trying to make sure that we do this in the most effective way possible.
Feed-in Tariffs (Stoke-on-Trent)
The Department has received a significant number of telephone inquiries, responses to consultation exercises and other pieces of correspondence relating to the consultation on feed-in tariffs. These are very likely to have included representations from the people of Stoke-on-Trent. However, at this early stage I am afraid that I cannot give the hon. Lady a detailed breakdown.
The Minister did in fact receive a letter from the chief executive and leader of Stoke-on-Trent council telling him that what is at stake with the Government’s review of the feed-in tariff is 100 jobs and 4,000 council homes that will lose their opportunity to reduce heating bills. What is going on in Stoke-on-Trent is echoed all around the country. Given that everybody agrees that the feed-in tariff needs to be reviewed, but in a phased way, does the Minister agree that, at the very least, the existing tariff levels should be honoured for aggregated solar photovoltaic schemes where there are existing contracts?
There is nothing retrospective about the proposals that we are consulting on. The hon. Lady must accept that demand for the scheme is overwhelming compared with the budget that is available, and way beyond that which was anticipated by her own Government. We have to make very difficult decisions in balancing one factor against the other, but at the centre of our decision-making process will be a concern to ensure that this is a viable scheme that keeps the industry alive for the long term and does not support a short-term bubble.
Domestic Energy Bills
I am delighted to say, Mr Speaker, that I do have the answer to this question.
On 23 November, DECC published its updated assessment of the impact of energy and climate change policies on energy prices and bills. The latest estimates show that the average household dual fuel bill is currently 2% higher than it would have been if energy and climate change policies were not introduced. By 2020, these policies will mean that the average household dual fuel bill will be 7% lower than it would have been in the same year in the absence of our policies.
I thank the Secretary of State for that answer. Would he be prepared to work with the Department for Communities and Local Government to see how the benefits of the discount schemes for people on low incomes could be extended to park homes, where the site owner is likely to buy in bulk and then resell, perhaps at quite a high price? To help the very vulnerable people in park homes, could there be a specific campaign to tell park home owners that they are eligible for the green deal?
I am grateful to my hon. Friend for that question. As a long-standing campaigner for people who live in park homes, she knows that they are far too often overlooked in schemes that benefit people who live in substantial and ordinary properties. It is crucial that we have the dialogue that she asks for to ensure that we help those people as far as we can. There are obviously practical issues that we need to address. We will try to get to the bottom of this.
The Minister may not know that Huddersfield has a twinning arrangement with Stoke-on-Trent and that we work very closely together. People in Huddersfield, like the people in Dorset and Stoke-on-Trent, are sick to death of the cost of energy. They want a more visible, muscular effort from this Government to take on the energy companies, many of which are foreign-owned, and make them do their job.
I am sure that Mr Speaker is aware of Yorkshire’s unilateral declaration of independence, which allows twinning arrangements to be entered into between towns in Yorkshire and towns elsewhere in the country.
The hon. Gentleman made a serious point about energy costs. I assure him that we are doing more than was done under the Government whom he supported for 13 years to make this market as competitive as possible. We have just had the Ofgem retail review and its proposals to simplify the tariffs dramatically to make things much easier for consumers. We have introduced a clear limit on the period in which the energy companies have to switch people over. We are doing everything we can to make this a competitive market, at both the retail end and the wholesale end. That is the best guarantee for every consumer in this country, be they in Huddersfield or Stoke-on-Trent, that they will get the best possible deal.
That is an interesting thought and I would certainly be interested to see more from the hon. Gentleman about this issue. I can see practical difficulties, given that warmth comes from so many different sources. For example, people who are off-gas grid and are reliant on heating oil may have substantially different problems from those who are on-gas grid and are able to avail themselves of a number of things. I would certainly be prepared to look at the idea if the hon. Gentleman put something on paper and sent it over.
Feed-in Tariffs (Consultation)
The Department has received a number of representations in response to our proposals to reduce feed-in tariffs for solar PV, including the length of time allocated to our consultation. The consultation closes on Friday 23 December. Detailed information on the representations will be provided in the Government’s response to the consultation in January.
We intend to put the industry back on a sustainable path to growth, far more in line with the projections that were made by the former Secretary of State for Energy and Climate Change who is now the Leader of the Opposition. We need a scheme that supports the industry but does not impose burdens unnecessarily on hard-pressed consumers.
Will my hon. Friend explain why the cut-off date of 12 December for new projects to be accepted at the current feed-in tariff is different from the consultation end date of 23 December? Why the two-week gap?
The reference date of 12 December is what we are consulting on, but the changes that we are proposing would not actually kick in until the beginning of April. We had to choose a date that we thought fair to allow people who had contracts in the pipeline to complete those contracts, but without allowing sufficient time for people to enter the market who were not already engaged in the process, and we chose April.
We all know that the Government’s consultation, which will last half the normal length of time and close after the cuts have already come into effect, is a sham. Because of the Government’s rushed changes to the feed-in tariff, which go too far, too fast, thousands of jobs are at risk. Last night, 4,500 staff at Carillion were warned that their jobs could go, but this morning the Secretary of State told the “Today” programme that he did not recognise that estimate, and that the cuts and job losses that he will cause were just a “sensible course correction”. Does the Minister believe that causing unemployment on that scale is a price worth paying?
It is so interesting how the right hon. Lady comes to the House with such inconsistent messages. One moment she wants to protect the consumer, the next she wants to push high costs on to consumer bills without a thought for the fuel-poor. The fact is that we are doing our best to contain a bubble caused by the ineffective scheme that her Government set up. We will put the industry back on a sustainable footing and do the right thing by the consumers whom she has conveniently forgotten.
Sorry excuses for a disastrous policy. I think it is 60p on an annual bill—in fact, in answer to a parliamentary question last week we were told that it was only 21p on the annual bill from 2010 to 2011. The fact is that the Minister’s cuts will hit families trying to protect themselves from soaring energy bills, put thousands of jobs and businesses in jeopardy and give the lie to the Government’s promise to be the greenest Government ever.
Last week, we read reports in the press about a meeting in the Minister’s Department between officials and the solar industry, in which officials said that the cuts to feed-in tariffs were part of a deliberate policy to kill off the solar industry. Will he come clean today and say that that is not his policy? If not, even at the eleventh hour and despite the damage that has been done, will he change course to enable solar to be put on a real sustainable footing for the future?
I think this ridiculous scaremongering is quite disgraceful. The right hon. Lady wants to talk up the problem and talk down the industry, and this pathetic attempt to smear my officials is frankly repugnant. It is her scheme that we are trying to fix—it was put in place by the last Labour Government. We will fix it and put the industry on a sustainable footing, but we should not take any lessons on budgetary control from the party that left us with a catastrophic deficit and drove this country to the brink of ruin. Shame on you!
Renewable Heat Incentive
8. What assessment he has made of the potential benefits of the renewable heat incentive for rural and remote households. (83969)
The renewable heat premium payment, the initial heat support scheme launched on 1 August, is targeted at off-gas-grid homes, particularly those in rural and remote areas. It is too early to make an accurate assessment of the benefits, but we intend to evaluate them fully next year to feed into developing future support for renewable heat.
The Minister will be aware that 8% of UK households rely on oil for their central heating, many of which are in rural and remote communities, and that many people who use oil central heating are the frail elderly and people on fixed incomes. When he consults on the feed-in tariffs, will he look into the advantages of biofuels as a means of both driving down carbon emissions and supporting lower energy bills in rural communities?
My hon. Friend makes some excellent points. Sustainably sourced biofuels for electricity, including bioliquids, are already supported under the renewables obligation, but they are not currently supported by the feed-in tariffs. We will launch phase 2 of the feed-in tariff comprehensive review, which will consider their potential expansion to new technologies such as bioliquids. I certainly take his points on board.
Does the Minister consider that the renewable heat incentive makes sufficient provision for the encouragement of domestic and small-scale combined heat and power boilers, which are particularly appropriate to off-grid households but may not be fully covered by the provisions of the RHI because they are not necessarily supplied by fully biogas-based sources? Is he willing to investigate that and consider whether the RHI could support such devices to a better extent?
I am very willing to do so indeed. The RHI has not been launched in full for domestic appliances—we are currently trialling it with the RHPP—but I am keen to support micro-CHP in the way that the hon. Gentleman suggests. He is an expert on this area and I would be happy to work with him to see what further support we need to drive forward this exciting technology.
Durban Climate Change Conference
9. What steps he is taking to secure agreement on climate finance in advance of the Durban climate change conference. (83970)
There are three main elements. On fast-start finance to developing countries, I am proud to say that the Government are on track to deliver our £1.5 billion pledge. We want other donors to do the same. On long-term sources of climate finance, we are at the forefront of pushing for new sources of public and private finance and we want others to join us there too. Lastly, we will push for the green climate fund to be operationalised in Durban as part of a balanced outcome to the negotiations.
I thank the Secretary of State for that answer, but recent press reports suggest that countries might not be able to reach an agreement at Durban even on the green climate fund, which had been the only realistic expected outcome prior to the summit. What steps are the UK Government taking to ensure that countries reach an agreement on the structure, operation and finance of the fund?
My officials are working diligently on that. We want as many outcomes at Durban to operationalise the agreements at Cancun as we can get. I do not agree with the hon. Lady that that is the only potential outcome. One of the most important things we can hope to get out of Durban if the talks go well is a commitment from all parties to ensure that we have an overarching legal framework. We can negotiate that and we could also respect the science by ensuring that we peak global emissions by 2020.
I am sure the Secretary of State will agree that financing for climate change measures is absolutely vital and that we have a very short period of time if we are not to feel the adverse affects of climate change. Does he agree with many groups, including the World Bank, the International Monetary Fund and the shipping industry, that a global tax on shipping is one way in which we could achieve a fair and sustainable way of financing climate change measures?
I certainly believe that a levy—a bunker fuels duty or whatever—is one potential way of raising the finance necessary. That was a recommendation in the report of the advisory group on finance, which was set up by the UN Secretary-General and in which I was honoured to participate. That is one of the most likely ways forward in breaking the back of that particular problem.
The green deal is a coalition agreement and a priority for this Government. We established the legal underpinning for green deal through the Energy Act 2011 and recently launched our consultation on secondary legislation, which will guide the detailed operation of the scheme. I am encouraged by the support we have had in developing this policy and the interest shown by a broad range of organisations in playing a role.
The green deal consultation sets out the Government’s plan to give three times as much subsidy to able-to-pay households than to fuel-poor households that take up the green deal. Why are Ministers giving three times more help to home owners who can afford to pay for improvements than to people living in fuel poverty?
The hon. Lady should be aware that the eco-subsidy is replacing two elements that we inherited from the previous Government: the Warm Front scheme, which was aimed at helping those in fuel poverty, and the carbon emissions reduction target and community energy saving programme schemes, which were aimed generally at householders. The proportions are broadly similar, so I do not accept that this is a departure in policy in terms of prioritisation. She will be aware that the warm home discount is aimed at those in fuel poverty—it will give two thirds more support to those in fuel poverty and will be targeted on the 600,000 most needy pensioners. That is a statutory scheme, which compares with the voluntary one under the previous Labour Government.
In answer to earlier questions, Ministers said that the green deal is with us and working here and now, but it is not. The Government are scrapping Warm Front and delays with the green deal mean that they will be the first Government since the 1970s who have not had a fuel efficiency programme. At the same time, they are downgrading the number of jobs that will be created by the green deal by 35,000. The question is simple: why?
The eco-consultation and that jobs estimate obviously came out before the Chancellor’s announcement in the autumn statement of £200 million of incentives for the uptake of the green deal. Those introductory incentives have been warmly welcomed across the industry and will ensure that we have substantial uptake of the green deal. On the point about funding, the whole model of providing energy efficiency changes with the green deal. That was supported across the House, including by the last Labour Government. It will, I believe, unlock substantially more money that was ever available from publicly funded, Exchequer-funded sources.
The Green Alliance has conducted three constituency pilot workshops in my constituency of Hexham, in Bristol North West and in Redcar today. Will the Minister meet the Green Alliance and me before Christmas to discuss the outcomes for the green deal that we studied for some considerable time only last month?
It is a very interesting idea and one that certainly merits further consideration. I am delighted to say that the Minister of State, Department of Energy and Climate Change, my hon. Friend the hon. Member for Bexhill and Battle (Gregory Barker), will be very happy to meet my hon. Friend to take that matter further.
We have heard a lot about interest rates this week. Affordable interest rates for green deal finance will be crucial if consumers are to take up the green deal at the scale and level the Government anticipate. A report by E3G says that relying on commercial loans could mean interest rates as high as 8%, 9% or even 10%. Polling has found that only 7% of the British public and homeowners would be interested in taking up the green deal if interest rates were as high as that. Given that, what specifically are the Government doing to get green deal interest rates down?
We are working closely with a group of interested parties to provide a finance aggregator for the green deal, which is exciting and will bring forward finance that is substantially cheaper than that estimated by E3G. We will announce the details of the scheme when we have them.
I thank the Secretary of State for that answer. The aggregator to which he refers is the Green Deal Finance Company, which is working very hard to try to lower interest rates. It estimates that it will need hundreds of millions of pounds from the Green investment bank properly to fund the initial capitalisation of green deal loans and to act as the catalyst that the green deal market needs. Without such funding, interest rates will be higher than 10% and the green deal will, therefore, surely fail. A moment ago, the Secretary of State said that he envisaged that the Green investment bank would provide some support for the green deal and that it could play a very important role. Will he tell us definitively today whether the Green Deal Finance Company will receive that scale of funding from the Green investment bank?
Obviously, it is up to the Green investment bank board to make its decisions, but it is clear that it is interested in helping energy efficiency and ensuring that green deal finance gets off to a good start. Let me make it clear how this particular market is structured. Green deal receivables—please excuse me, Mr Speaker, for reverting to financial market jargon—are very similar to utility receivables. As soon as the market is established and we secure a couple of deals, the Green investment bank’s support will become important. The market will then be happy to finance this on terms similar to utility receivables. If it does that, we will be looking at substantially lower interest rates than the ones the hon. Lady has been citing.
I have been fully engaged with the development of the infrastructure theme of the growth review, embodied in the accompanying national infrastructure plan 2011 and announced in the Chancellor’s autumn statement. I welcome the inclusion of measures relating to energy infrastructure, including onshore wind. These will help to deliver our ambition for a secure, low carbon and affordable energy system.
This was supposed to be the greenest Government ever. The Secretary of State has already undermined solar energy and torpedoed carbon capture and storage. His attempts on the “Today” programme to distance himself from the Chancellor’s autumn statement cannot conceal the fact that his green credentials lie in tatters. Can he explain to the House why he has been so singularly unsuccessful in securing the investment that we so desperately need for a low carbon economy?
I think we must have been living in different worlds. The Government’s achievements on the green agenda since the election include electricity market reform, the green deal in the Energy Act 2011 and the pioneering renewable heat incentive. Furthermore, we have brought forward the subsidy review for renewables, which was widely welcomed by the sector, and secured £1 billion for the carbon capture and storage programme. Indeed, yesterday I visited a CCS pilot partially funded by Government money. I think that the hon. Gentleman is overlooking many achievements on the green agenda that do indeed mean that we are on course to be the greenest Government ever.
In interviews at the time of the autumn statement, the Chief Secretary to the Treasury announced casually that the money for the CCS project was being reallocated and would not be required until well into the next Parliament. Given that the Secretary of State has already pulled the rug from under Longannet, is this not clear evidence that he has abandoned any hope of developing CCS as a potential export industry?
Absolutely not. By the way, the hon. Gentleman did not quote the Chief Secretary precisely. The Chief Secretary pointed out that money was absolutely available for a CCS project. Indeed, all the negotiators involved in the Longannet project recognised that although the money was not enough to make Longannet work, it would be enough to make a CCS project work elsewhere. The reality is that there will be some slippage. The profiling of that £1 billion in the comprehensive spending review was heavily weighted towards the last year of the CSR, and if there is slippage it is bound to be in the next CSR. However, we will make profiling decisions on expenditure for CCS when the projects come forward following the competition next year, and I can assure the hon. Gentleman that the money is available to fund them.
The Secretary of State has just reiterated his claim last month that the £1 billion for CCS is safe. If so, will projects, including at Peterhead and elsewhere, aiming to be up and running before the end of this Parliament still have access to that £1 billion? If so, how does that square with the comments from his Cabinet colleague, the Chief Secretary to the Treasury?
The 2016 date is the end date for the competition run by the EU Commission. We hope to be able to support those projects in the UK that the Commission decides it is sensible to support, but there will be other projects too. The £1 billion is not necessarily available to fund the up-front capital costs entirely. If we can get private money into a scheme—such as the one I saw yesterday at Ferrybridge, where we invested £6 million despite the total cost being about £250 million—that is the right way to go. The Government are about using public money as effectively as possible to bring in private sector money as well.
Exploration for shale gas in the UK has only recently started, and it will be some years before the prospects for production in our geological, regulatory and economic conditions, and the economic prospects for the industry, can be fully assessed. However, a British Geological Survey study last year estimated that UK shales might yield some 150 billion cubic metres of gas—equivalent to roughly two years’ demand. Work is in hand to update these geological estimates in the light of more recent information, including Cuadrilla’s estimate of gas in place under its licences in Lancashire.
Media reports in the US state that shale gas discoveries have reinvigorated US oil and gas production. There have been substantial discoveries of shale gas in the UK, as the Minister mentioned, so does he agree that the UK could learn lessons from the US experience with a view to developing shale gas in the UK?
My hon. Friend is right to point to the lessons from the United States. Shale gas has transformed the energy outlook there and potentially turned the US from a gas importer to a gas exporter. There might be lessons to learn, but there are very different rules here on land ownership that will make things much more complicated. We are a much more densely populated area, and other countries such as Poland and elsewhere are clearly attracting interest in this connection, but we will explore the matter. There are no barriers to doing so but nevertheless we recognise the limitations.
I have had many recent discussions with the Chancellor and others on jobs and skills in the green economy. Green growth has been considered across all strands of the growth review, and I welcome recent announcements in this area, including on the green deal, which could support at least 65,000 insulation and construction jobs by 2015.
I previously asked the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker). the same question, but he made such a mess of it that I am pleased that the Secretary of State is having a go. Why in the past year has Britain slipped from third in the world to 13th for investment in green technology?
Clearly the hon. Gentleman understands that investment in these terms is often a lagging indicator, and the last Government were sadly remiss in coming forward with adequate incentives—for renewables investment, for example. I am delighted to say that we have brought forward the renewables review and provided the certainty that the industry required, and I am sure that our position will improve in future rankings.
But how does the Secretary of State square the changes to feed-in tariffs with promoting a green economy? In just one small scheme by the Peabody housing association in my constituency, the four jobs at the association are at risk, the eight apprenticeships are at risk and the 100 jobs at Breyer, which is installing the scheme, are also at risk. The Secretary of State is killing the solar industry and he must know it.
That is absolutely not the case. The right hon. Lady knows very well the importance of sustainability, because—if I may pay tribute to her—she has a long track record in this House of standing up for sustainability. However, sustainability does not apply merely to environmental matters; it applies also to budgets and the growth of industry, and we are putting the solar industry on a sustainable basis for growth.
17. What recent discussions he has had with energy suppliers on the provision of credit for energy supply to new businesses; and what assessment he has made of the effect on growth of the level of deposit currently required. (83979)
The level of security deposits is a matter of negotiation between individual businesses and energy suppliers. If the terms of an energy supply contract are felt to be unreasonable, businesses should seek to obtain a supply from an alternative provider or seek independent advice from Consumer Direct.
I thank the Minister for that reply, but requests from energy companies for large deposits up front is an increasing issue for new businesses in Calder Valley, as well as those being taken over by new owners. Will he reassure Calder Valley business people that the heavy-armed tactics that energy companies are using will be looked at and pressure brought to bear?
My hon. Friend raises an important issue, and I am grateful to him for raising it with me previously in a meeting. I understand the concerns facing businesses in Calder Valley and elsewhere. There are issues that Ofgem should be looking into, and I am happy to write and draw its attention to them. Indeed, Ofgem has recently said that it is doing more to try to ensure that businesses get a fair deal in this regard.
Since my Department’s last question time, I have published the annual energy statement and the green deal consultation, announced a comprehensive review of feed-in tariffs, launched the renewable heat incentive and confirmed £200 million additional funding for the green deal. Today I am publishing the carbon plan and the Government’s response to both Dr Mike Weightman’s final report and the consultation on the long-term management of the UK’s plutonium stock. Next week the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), and I will attend the 17th conference of the parties to the UN framework convention on climate change in Durban.
The Department says, “It’s the Treasury,” the Treasury says, “It’s the Office for National Statistics,” and the ONS says, “It’s not us.” So will the Secretary of State please publish the definitive advice on why the climate change levy fund for feed-in tariffs for solar has to be counted on the Government balance sheet? Is he aware that the European courts have recently ruled that a similar scheme in Germany need not do so?
One of the key issues is not whether something is on the Government’s balance sheet, but the effect on consumer bills. The hon. Gentleman cannot, sadly, wave away the question of whether this measure will add at least £26 to consumer bills in 2020, and possibly as much as £80. I will happily take this issue away and look into exactly which Department is meant to come forward, but I return to the point that what he needs to take into account is not whether something is on the balance sheet but what consumer costs are. [Interruption.] The right hon. Member for Don Valley (Caroline Flint) is muttering at me from a sedentary position, but she claimed recently that she cared about consumer costs, and I do not seem to see that now.
T2. Will the Minister join me in congratulating Bentley Motors in my constituency on becoming the first plant in the UK car industry to achieve the new global energy management standard, snappily entitled the ISO 50001? What are the Government doing to ensure that businesses such as Bentley can continue to meet their renewable energy targets by investing in alternative energy sources? (83984)
I was delighted to have a chance to visit Bentley recently with my hon. Friend to see the work it is doing. I pay tribute to Bentley and to Volkswagen, the parent company, for the investment that they have put in place. There are systems in the CRC—carbon reduction commitment—energy efficiency scheme that help to encourage companies to improve their energy efficiency. Companies can qualify for climate change agreements through which they receive discount on the climate change levy in return for meeting energy efficiency targets. Many measures are already in place, but I congratulate the company my hon. Friend mentions on what it has already achieved.
I am grateful to the hon. Gentleman for eloquently making a point that I have made on many occasions. He will be pleased to see that the carbon plan contains a substantial discussion on exactly that issue. We are at a key turning point. Do we move forward to a position in 2050 where we will be reliant on imported energy for £9 out of £10 of our energy needs, or do we move forward to a position where we can be much more secure, much more energy independent and, indeed, make substantial improvements to our efforts on climate change?
T4. I recently took part in a conference, organised by Wandsworth Friends of the Earth and a number of local churches, which was focused on climate change and energy saving. One of the speakers, an architect, illustrated the enormous savings she had been able to make in a Victorian-era house through careful use of insulation and other methods. Does the Secretary of State share the encouragement this gave me that the green deal has much to offer constituents living in older houses? (83986)
It certainly does. My hon. Friend makes a very sensible point. It is precisely that sort of home, built before the first world war, for which we are going for the first time to be able to offer a substantial holistic refit, precisely because of the support given to solid wall insulation.
T5. The Secretary of State will be aware that in the last few days the National Grid Company has said it would welcome greater independent auditing of its contracting arrangements with STOR—short-term operating reserve—aggregators. Given that the National Grid admits that it buys 500 phantom MW a year, which it presumably passes on to consumers, will the Secretary of State now insist on independent auditing of this relationship with STOR aggregators so that consumers get a fairer deal? (83987)
The hon. Gentleman raises an important issue. We have had discussions with the National Grid Company about this matter and we are glad that it recognises the scale of the problem. We will work with the National Grid to try to make sure that it is addressed.
T6. In my constituency, there are plenty of small businesses, co-operatives and charities that wish to play their part in building a greener economy. Many are concerned about some of the changes to feed-in tariffs but are hopeful that other measures such as the green deal will enable them to grow. Will the Minister give an assurance that the Government will make it as easy as possible for small businesses to get involved in the delivery of the green deal? (83988)
I can give my hon. Friend an absolute assurance. In fact, he may like to join me on 12 December when I host a round table specifically for small and medium-sized enterprises to work out how they can become key delivery partners in the green deal, which will provide a huge opportunity for local partnerships in exactly the way my hon. Friend suggests.
Can the Secretary of State deny the outrageous claims that his own personal consumption of energy is about to be similar to that of a small town? Can he confirm for the House that he believes in leading the energy green crusade by example rather than just by exhortation?
I certainly can. I shall have to ask whether it is Huddersfield or Stoke-on-Trent whose energy I am meant to be consuming. I must admit I am not sighted on that issue, but if the hon. Gentleman would like to write to me, I will be happy to give him a full reply. I can assure him that I am not a small town and that my personal energy consumption is nothing like one!
May I return the Minister to the subject of shale gas? Given the figures that have been announced for gas in place in the Bowland field, is it not important for the Government to form an early view on what can be economically and safely extracted?
A great deal of work needs to be done to assess the role that shale gas can play. We are aware of the gas-in-place estimate, but it is very different from an estimate of the amount of gas that may be recoverable. Much more research is needed, but we are satisfied that if the extraction goes ahead, it can take place under the existing legislative requirements relating to safety and environmental protection.
T8. An early-day motion tabled today, signed by me and the hon. Members for St Ives (Andrew George), for South Suffolk (Mr Yeo) and for Brighton, Pavilion (Caroline Lucas), calls on Ofgem to raise the level of debt for which pre-payment meter customers can switch suppliers from £200 to £350. According to the House of Commons Library, that would help more than 200,000 people immediately. Can we rely on the Secretary of State’s support? (83990)
We are working on a number of issues to try to ensure that those with pre-payment meters are given the best possible deal—that they can switch easily, and can opt for credit rather than pre-payment meters when that will help them. And yes, the hon. Gentleman can be assured that we will continue to pursue that agenda as vigorously as possible.
When considering the green deal and energy efficiency measures generally, does the Minister take into account the potential damage caused to property by condensation, which outweighs some of the advantages of some of those measures? Will he meet me and one of my constituents to discuss that growing problem, which compromises so much of what the Government are trying to achieve?
I should be happy to do so. It is true that older properties without damp courses, many of which were built before the first world war, are more difficult to treat, and much more research and development is needed to ensure that we do not unintentionally cause more problems than we solve.
T9. I am glad to hear that the Secretary of State and the Minister are going to the climate change conference in Durban next week, but has the Secretary of State not left it too late? Is there not a danger that the conference will not produce the outcome that we want? What is the Secretary of State doing to ensure that we secure an international agreement, especially in the light of reports that have appeared over the past few days of a lack of progress in the negotiations? (83991)
The hon. Gentleman has a long-standing interest and expertise in this matter, and I am delighted to answer his question.
I could not have gone to Durban any earlier than Sunday, because that is the beginning of the ministerial segment, but the hon. Gentleman can be assured that I have been involved in talks with a number of other ministerial participants ahead of the conference, including Chinese, Colombian and South African Ministers. I believe that we have a real chance of making progress. Some of the gloomiest reporting tends to appear just before the talks begin in earnest, and I have not given up yet.
I know that our splendid Liberal Democrat Secretary of State believes passionately in localism. Can he explain why, having been rejected, the proposed Nun Wood wind farm development, which covers three parliamentary constituencies and is opposed by the three Members of Parliament and the three local authorities concerned, has suddenly been granted approval on appeal? That cannot be localism at work.
My hon. Friend has made an important point. In future, as a result of one of the changes that we are making to the planning system, it will not be possible to overrule such decisions on appeal simply because the developments involved meet a regional renewable energy target. That target has been removed, and we are giving much more authority and many more decision-making powers to local bodies. Applications involving more than 50 MW will be submitted to the Infrastructure Planning Commission and then to Ministers for approval, but we are determined to strike the right balance between local and national interests.
Will the Secretary of State agree to meet me and my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) to discuss the announcement of redundancies by Carillion Energy Services, which employs people in both our constituencies, and the fact that he is putting thousands of real people’s jobs at risk by slashing feed-in tariffs? The Minister accused my right hon. Friend the Member for Don Valley (Caroline Flint) of scaremongering earlier, but redundancy notices have been served to 4,500 employees.
The ministerial team is acutely aware that it must represent all parts of the United Kingdom and that many places have a substantial and impressive claim to be the home of the Green investment bank. We await with interest the advice of the advisory board.
I was very pleased to hear Ministers recognise the problems of people on prepayment arrangements for electricity. Will the Secretary of State say what specific action he will take to ensure that those who cannot switch to credit arrangements do not end up on higher tariffs than those who can afford to pay by direct debit?
We will continue to investigate this matter with the energy companies. Some people on prepayment meters used to pay higher tariffs than even the standard rate, but that is no longer the case and they now pay less. That is a substantial step forward, but it is not the end of the story. We will continue to work on this, as I am aware—as is the right hon. Member for Don Valley (Caroline Flint)—that it is a key area of vulnerability.
The planned roll-out of smart meters across the UK will entail millions of homes being fitted with new devices. Will steps be taken to ensure that such devices are interoperable so that they do not act as a disincentive to consumers switching suppliers in order to get a better deal?
My hon. Friend makes a very important point. That is fundamental to our approach. Smart meters are designed to give consumers more control over the energy they use in their homes, and allowing people to switch and take advantage of different tariffs will be a fundamental part of their success.
I am very grateful for the advantage given to me by my colleague. What action has been taken to deal with Northern Ireland’s especially high dependence on home heating oil, given that a number of the current initiatives to tackle fuel poverty do not apply to Northern Ireland?
The right hon. Gentleman raises an issue that is of even greater importance in Northern Ireland than anywhere else in the country. I recently met Bord Gáis to talk about some of its plans for extending the gas grid in Northern Ireland. I welcome those investments, and in addition the Office of Fair Trading has taken measures to ensure that the market operates fairly and properly in the interests of consumers. The OFT has committed to continuing to investigate any examples of market abuse.
Does the Secretary of State share my pleasure in the fact that the Daylight Savings Bill will finally reach its Committee stage next week, and does he agree that it makes sense for us to align our lives more with daylight hours? That will support tourism, help business and reduce carbon emissions.
I urge the right hon. Gentleman to consider the announcements Ofgem has made today, dramatically simplifying the range of tariffs. Ofgem states that there must be a standard tariff that every company must apply in a similar way, and also that the variable tariffs must meet certain conditions. This is all part of trying to ensure that charging is much more straightforward and clearer for consumers, so they can see whether they are getting a good deal and switch if necessary.
Thank you, Mr Speaker. As my hon. Friend the Member for Gateshead (Ian Mearns) said, many of our constituents face unemployment as a direct consequence of the inept and unfair way this Government have introduced the changes to the feed-in tariffs. What are the Government doing to give them security in their jobs and to give some certainty to the industry?
None of us wants to see anybody facing uncertainty about their employment prospects. The reality is that we must ensure a sustainable future for the solar industry that is based on a budget that will last rather than one that runs out so quickly that the industry comes to a grinding halt. The key thing for us is to ensure that we are on-track to deliver our goals for the low-carbon economy, including all the employment opportunities, and we will do that.