The Secretary of State was asked—
Feed-in Tariff Scheme
We now estimate that, thanks to our reforms, there will be nearly 1 million installations under the FITs scheme by 2014-15, compared with only 350,000 under the old scheme. Final numbers will of course depend on future technology costs and market growth. As for household share, 97% of current installations are classified as domestic, and it is likely that the majority will continue to fall into that category.
The feed-in tariff regime, as recently reformed by the Secretary of State, strikes a fair balance between those who install solar PV and the consumer who meets the cost. It will result in far more installations and it will be more popular. Does my right hon. Friend agree that, in a democracy, striking that balance in achieving his renewal energy targets and the consequent support of the people should always be his objective?
The way in which this has been handled has been a bit of a disaster. I accept that the Minister has made some changes, but they have been detrimental to the overall confidence in the scheme. Putting that to one side for a moment, may I ask him to look seriously at enabling bigger entities such as community centres, schools and other community facilities to benefit from the scheme, to provide a kick-start over and above that given to the householders who participate in it?
In our proposals, smaller community projects will benefit from the decision to apply only the lower aggregated tariff to generators with more than 25 installations. We are now consulting on a definition of “community” and on how that could be used, including a possible tariff guarantee process and a higher rate for community-owned multi-installations, compared with commercial ones. I have to say to the right hon. Gentleman that that type of community approach was not in the old scheme.
The Intergovernmental Panel on Climate Change recently revised its procedures in response to an independent review by the InterAcademy Council. The revisions address the key recommendations of the review and put the IPCC in a stronger position to prepare its fifth assessment report, but there is absolutely no room for complacency.
I am grateful to my hon. Friend for his answer, which none the less remains complacent. When the InterAcademy Council reported, it proposed radical reforms that would
“fundamentally reform IPCC’s management structure while enhancing its ability to conduct an authoritative assessment”,
and criticised IPCC authors for reporting
“high confidence in some statements for which there is little evidence.”
Most of the InterAcademy Council’s recommendations have been rejected, however. Why are the Government not pressing for them to be implemented?
My right hon. Friend will know that, as a result of the reform procedures, an executive committee has been formed and a new conflict of interest policy has been created. The communications strategy has also been elaborated on much more strongly. I accept that this is by no means perfect, but we now have much greater faith in the IPCC and we look forward to seeing its fifth report.
The Department of Energy and Climate Change publishes estimates of retail energy prices in our “Quarterly Energy Prices” publication. In general, in line with wholesale costs, most prices have gone up in recent years. However, domestic gas and electricity prices have recently both been cut by just over 2%, although prices will still be up by about 15% for gas and 8% for electricity compared with a year earlier.
We most certainly do. No one in the House has done more for collective purchasing than my right hon. Friend the new Secretary of State. This is a trend that we are very keen to encourage, as it will help consumers dramatically by enabling them to switch effectively. It will form an important part of a functioning market.
Industries using large amounts of energy—such as Cemex, which manufactures cement in Rugby—are concerned about the relatively high energy prices here compared with other parts of the world. Will the Minister update the House on the steps being taken to ensure that the energy prices paid by British industry remain competitive?
My hon. Friend makes an extremely important point, which is relevant to Members on both sides of the House. What the Chancellor announced before Christmas was a package of about £250 million to support energy-intensive industries. More detail is being published this week, and there is a call for evidence so that we can see exactly what support is required for which industries.
It is not just gas and electricity prices that are rising, as those off grid who use refined oil as a home fuel are having a bad time of it. Given the increasing concentration in that market, has the Minister given any thought to making direct contact with the suppliers to see whether they will identify and offer assistance to vulnerable groups within their client base?
The hon. Gentleman raises an interesting point. The Office of Fair Trading looked into this market last year. It was evident in the previous winter that the system had not worked as well as it should have done. We are seeing increasing centralisation of ownership. The OFT has said that it is willing to look again at examples of market failure, and it has asked Members of Parliament to submit evidence to it of where that might be happening.
4. When he expects energy companies to secure investment for new nuclear power stations. (98662)
The timing of investment decisions in new nuclear is a commercial matter. The Government are encouraging investment in new nuclear through a range of actions, including its proposals on electricity market reform. The Government have also committed to working with relevant developers to enable early investment decisions to progress to timetable, including those required ahead of electricity market reform implementation.
I thank the Secretary of State for that tortuous and absolutely uninformed answer. As secretary of the nuclear industry all-party group, I strongly support this industry, but the problem is that progress has been stalled for some time as it would appear that there has been not much talking and no action. The Government have to do more, because we are seeing the resources in this industry and the commitments to investment and technology going elsewhere and not coming to the UK as we hoped when we started to think sensibly about using this very low-carbon source of energy.
I have to say that I am extremely surprised by what the hon. Gentleman has said, given the Labour party’s record on this issue, as it dithered and delayed for all its time in office. I do not recognise the situation he describes. Three consortia are putting forward proposals for 16 GW of new nuclear. Let me tell the hon. Gentleman that people are investing serious money in this industry and that we are making real progress.
I am very confident. When I joined the Prime Minister for the Anglo-French summit in Paris recently, we were signatory to 12 commercial agreements, which included agreements with further education colleges that will be helping with that supply chain. However, it is not only FE colleges that will be involved, as there are supply chain improvements for training British employees in this new industry all over the country.
Apart from the wider policy issues arising from the Government’s attempting to skew investment towards nuclear through the carbon price floor, has the Secretary of State been able to consider the particularly adverse implications in the context of investment for energy in Northern Ireland, given the serious implications stemming from the single electricity market there.
I have to disagree with the hon. Gentleman. The carbon price floor is important if we want to move to a low-carbon future, to which I am completely committed. We understand the impact of the carbon price floor on energy-intensive industries. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) is talking with his colleagues in Northern Ireland to try to mitigate those issues.
23. Clearly, Labour Members forget that they dillied and dallied on nuclear power for 13 years. Following the UK-French summit, what action is my right hon. Friend taking to accelerate putting base load nuclear electricity into our grid, which is of course the cleanest form of energy we can have? (98681)
I am continuing the policies set out by my predecessor, who gave strong support for that. I have to tell my hon. Friend that when I was reading my brief on this issue, I had only one worry: the design of many of these new nuclear reactors is called European pressurised reactors, and I know that Europe can create pressures and get reactions in this House—but I hope that on this occasion, we can unite.
Is the Secretary of State aware of the concern that if Areva were to win the contract to build the reactor at Wylfa, the supply chain work may not be likely to go to UK companies? Given the comments in the Business Secretary’s confidential letter to the Prime Minister, which received some publicity earlier this week, what do the Government intend to do to maximise the opportunities for UK firms in the supply chain by encouraging contractors to buy where they build?
The Government have been focusing on this with great intensity from the Prime Minister down. Indeed, when we held discussions with our French colleagues and EDF, we made it clear that we expected there to be British involvement in the supply chain, and that is beginning to happen. I refer the hon. Gentleman to the many agreements that were signed in Paris, including a ground-breaking £400 million deal on nuclear projects between Rolls-Royce and Areva.
First, we are directly helping about 2 million vulnerable households with their bills through the warm home discount scheme, and many more households are benefiting from subsidised energy efficiency measures under the carbon emissions reduction target scheme. Secondly, later this year the green deal and the energy company obligation will provide energy efficiency measures at no up-front cost to households. Thirdly, we are looking to help consumers get better prices by harnessing their collective purchasing power.
I thank the Secretary of State for that answer. On consumer energy bills, does he agree that it is wrong in principle to finance carbon commitments on the back of the poor, which was the policy of the previous Government, and that we need a more imaginative way forward?
I agree with my hon. Friend. I am a liberal, but I strongly believe that collective action can help solve some of society’s ills. That is why I promoted collective purchase and switching as consumer affairs Minister and am continuing to do so as Secretary of State for Energy and Climate Change. It is a shame that the party of Keir Hardie and Aneurin Bevan forgot the power of collective action in its 13 years in government.
It is interesting that the Secretary of State referred to the CERT and Warm Front schemes, which Labour introduced and the Government are scrapping. I welcome today’s announcement on funding for green deal training, however. It is a good first step towards delivering the apprenticeship scheme that a Labour amendment added to the Energy Bill. Yesterday, however, DECC released figures showing that 7 million homes still need cavity wall insulation, yet the Government impact assessment for the ECO shows that under the green deal cavity wall insulations are set to plummet by 67% next year. At our last question time, I warned that that will lead to a loss of 3,000 jobs. What is the Secretary of State going to do to ensure that these jobs can be safeguarded?
The green deal and the ECO are extremely good proposals. They replace proposals that had a place, but which were not as effective as our proposals will be—[Interruption]—because our proposals are in a package and we have a range of other regulations to help on energy efficiency. We will conduct another impact assessment to show how beneficial our measures are for jobs and the industries concerned.
Does my right hon. Friend agree that the project in Burnley to clad hundreds of Calico Homes, which is funded by British Gas, Calico and this Government, is the right way forward as it will save money, keep the houses warmer in winter, keep energy bills down and help achieve the aim of having green energy?
My hon. Friend is a huge champion of energy efficiency in his constituency, and he is absolutely right. It is the ECO scheme that is making such policies possible. As a result of such measures, we can move on to solid-wall insulation, which for too long has been a poor second cousin.
We need to balance a range of priorities in energy policy, including energy security, affordable bills and tackling climate change. That is why this Government have a portfolio approach to energy generation. We are looking at low-carbon technologies, including wind power, carbon capture and storage, and new nuclear.
We are working with Ofgem to deliver clearer bills and simpler tariffs, to help consumers engage effectively in the energy market. We have cut red tape for small suppliers to help them compete, and we are looking at Ofgem’s recently published proposals to increase liquidity in the wholesale market.
When Ministers and I were in opposition and Labour was in power, we spent much of our time trying to get the Labour Government to make sure energy companies understood the simple principle that when energy prices went up they were justified in increasing prices to our constituents, but when those prices went down they should also bring their prices down for our constituents. Will the Minister assure us that the Government will force Ofgem and the energy companies to understand the rule that consumers must benefit when prices go down, just as they are penalised when they go up?
Ofgem is already working on this issue. Indeed, its proposals for much greater clarity and for a much simpler range of tariffs are a core part of achieving in this area. In the course of that, it will ensure that consumers find it much less confusing to switch and can see whether they are getting a better deal, and that is a very important part of making this market work properly.
Does the Minister have a timetable for the agreement on who will be the counter-party for the contracts for difference under the proposals for electricity market reform? If not, how will he resolve the issue in time for legislation to be put before this House?
As the hon. Gentleman knows, we published a technical update for the market reform proposals before Christmas, which set out how we would work with companies that need to make final investment decisions this year to help them identify the strike price under the market reform proposals. We recognise that legislation needs to go through Parliament and we are looking to achieve that in the next Session, but we are also clear about the fact that early decision makers need to have that clarity and we have committed to making sure they have it.
Clearly, electricity market reform must improve competition in the energy market. The Minister told the Select Committee that
“we need to get legislation through as quickly as possible.”
I suggest to him that the most important thing is not getting it done quickly, but getting it done right. Given this Government’s record of legislative mismanagement, will he today agree to publish after the Queen’s Speech a draft energy Bill for pre-legislative scrutiny, so that this House can ensure that the Government’s proposals deliver the electricity system our country needs?
One of the most important things for international investors is for there to be as much cross-party support as is possible in this sector. The Government therefore want an energy Bill that commands support on both sides of the House. We are keen to engage constructively with the right hon. Lady, her shadow team and the Select Committee to examine the options for pre-legislative scrutiny closely and see how we can get the maximum possible support for our measures. I am sure she will understand that we do not want to delay the Bill unduly, but we think that that sort of cross-party support will be an integral part of its success.
Between 2004 and 2009 the number of households in fuel poverty rose from 2 million to 5.5 million across the UK. The Department will publish the 2012 annual report on fuel poverty statistics on 17 May. It will show the actual level of fuel poverty in 2010 for England and the UK, and projected levels for England in 2011 and 2012.
I thank the Minister for that answer. He may be aware that our Labour administration in Glasgow city council has introduced the winter warmth dividend, giving every 80-year-old £100 to help them with their winter fuel bills, so making up for the cut madeby this Government to the winter fuel allowance. Will he join me in congratulating Glasgow city council on protecting the most vulnerable and not cutting the support they get, as this Government have?
On the contrary, this Government are massively increasing the support for the fuel poor. For example, our warm home discount will reach far more households than the previous Government’s plan. I welcome any measure to help tackle fuel poverty, but, fundamentally, we are going to do that by retrofitting the homes of the fuel poor and improving the fabric of those homes, rather than just handing out more money to try to keep up with ever-rising fossil fuel prices.
We are not expecting any impact as a result of that. Obviously, there is a constant need for a new generation of technologies to emerge. What we want, both for the fuel poor and for this country’s energy security, is a broad mix of fossil fuels, renewables and nuclear. We think that that is the best route forward.
When the previous Labour Government left office, 1 million fewer households were living in fuel poverty than in 1997. The Tory Government have scrapped Warm Front, the carbon emissions reduction target, the community energy saving programme and social tariffs, and they have cut the winter fuel allowance. As a result, the level of fuel poverty has risen from one in five households to one in four. The Minister, who is responsible for tackling climate change, has said that the energy company obligation would deliver far more for the fuel poor than any measure introduced by Labour, yet the Government’s own figures show that, in a best-case scenario, the ECO will lift just half a million homes out of fuel poverty. With energy bills at record levels, why are the Government turning their back on the fuel poor?
It is ridiculous for the hon. Lady to pretend that the number of fuel poor did not rise from 2004 to 2009 from 2 million to 5.5 million. It would be good, on this really important subject, if, rather than trying to score cheap partisan points, we could build a new consensus. We are bringing forward some very important measures on fuel poverty and we are determined to really make a difference.
Combined Heat and Power
There is no place for old-style incinerators in our future energy mix but there are an increasing number of new energy-from-waste technologies being deployed that offer real potential for local low-carbon and environmentally friendly generation of electricity and heat.
My hon. Friend is absolutely right. There has been a sea change in safety and environmental standards as well as in the type of technologies that can now be deployed. These smaller, new technologies often have a role to play, particularly in our vision of an ambitious roll-out of decentralised energies and of communities taking more responsibility for and greater ownership of their own energy-generating assets.
Is the Minister aware that there are some very good energy-from-waste operations at the moment that, with a little co-operation with local authorities and a little help from the Government, could be converted into combined heat and power to heat local communities, hospitals and town centres? That is what happens in Sheffield and it could happen in many other places.
The hon. Gentleman makes a very good point. I have visited the site in Sheffield and it is a beacon of what can be done and of the benefit that we can get from such assets. We want to see a big expansion in CHP, not forgetting the hierarchy that means that before considering energy from waste, we should prevent, reuse, recycle and recover. We think CHP has a big future and will bring forward further proposals to encourage it.
9. What recent representations he has received on his decision to reduce the feed-in tariff for solar PV. (98667)
I met 25 stakeholders when the FITs consultation was launched on 9 February and I intend to meet them again on 27 March. As of 5 March, we have received 18 written responses to the consultation on the solar PV cost control mechanism and six to the consultation on non-PV technologies and scheme administration issues.
I thank the Minister for that answer, but small companies in my constituency are still contacting me about the chaos over the ending of the feed-in tariff scheme and they want to know what the Minister will do to listen to their comments and to work with small businesses as well as some of the larger stakeholders to find the way forward.
The hon. Lady will know that there has been a significant level of deployment—contrary to some of the scare stories and predictions that were circulating before Christmas—in January and February and that continues. We have now put forward a consultation document that is gathering broad support for putting in place a sustainable framework that will result in a bigger scheme that offers better value. As a result, there will be far more PV under our reform proposals than there was under Labour’s very expensive scheme. We are keen to involve small and medium-sized businesses as much as possible.
Earlier this week I was in Berlin with the Select Committee on Science and Technology to look at the energy infrastructure in Germany. Will the Minister confirm that Germany is proposing to cut the feed-in tariff rates to below the UK level with just two weeks’ notice?
My hon. Friend is absolutely right. The German cuts are now going further and faster than those that we are proposing. We think that solar is a very dynamic technology that is up to the challenge. If costs continue to come down and it becomes competitive with fossil fuels by the middle of the decade, as we believe it might, we could see 22 GW of solar capacity installed by 2020.
Onshore Wind Energy
A responsible energy policy for this country is one that includes onshore wind. Well-sited wind farms, offering the benefits to local communities that we are introducing, are one of the cheapest ways of cutting our dependence on imported gas over the next decade and keeping emissions down.
I thank the Minister for that answer. Is he aware of the new blade tip generation technology, which is more efficient than traditional turbines and can be installed with no lasting adverse effect on the countryside? Will he support moves to manufacture this innovative form of renewable energy on the Isle of Wight in support of the eco island initiative?
I am grateful for my hon. Friend’s question. It is good to see examples of the economic benefits that wind power can bring. We are aware of companies developing new technologies for turbines, including for small-scale wind power generation such as the blade tip technology he cites. The support we provide for wind power generation in the UK will encourage use of appropriately sited and efficient wind developments.
Can the Secretary of State confirm that if we add the number of existing turbines to those going through the planning system, we have enough in place to hit his Department’s 2020 targets? If that is the case, does that not suggest that the level of subsidy for these things is too high?
I thank my hon. Friend for his question. He and I may disagree about the significance of onshore wind, but I appreciate the measured way in which he has engaged with me and the Prime Minister on this issue. I can tell him that 5 GW of onshore wind power generation has already been built, that there is planning consent for a further 6 GW and that planning permission is being sought for 7 GW-worth of projects, only some of which will be approved. Given that the ambition was for 13 GW, most of the development that the country needs is indeed already on the table. As for subsidy, the subsidy levels go down as costs go down, and we are proposing a 10% reduction in subsidies for onshore wind.
Given the news the Minister has just given regarding the progression of energy production from onshore wind, can he assure us that wildlife migratory routes will not be inhibited by the establishment and development of wind energy production? I want to make sure that wildlife will not be harmed by energy provision and development measures.
First, we need to make sure that communities are listened to during the planning process, and the planning reforms will do that. We are committed to ensuring that local communities capture the full economic benefit from hosting renewable energy projects, particularly the retention of all the business rates that these installations pay.
11. What discussions his Department has had with National Grid on the undergrounding of new electricity cables. (98669)
The Department and National Grid have discussed National Grid’s new approach to network infrastructure, which emphasises mitigating visual impacts. The Department has arranged for National Grid to fund an independent study comparing the costs of undergrounding and overhead lines. We also revised the text of the relevant national policy statement to require greater consideration of alternative approaches before it was approved by Parliament.
I thank my hon. Friend for his answer. I am sure he is aware that increasingly robust evidence has been gathered by the Institute of Engineering and Technology that the cost of undergrounding pylons is a lot less than National Grid has previously suggested. May we count on his support and the support of the Government to ensure that pressure is brought to bear on National Grid to underground pylons and not ruin the beautiful British countryside?
My hon. Friend makes a very important point. I think National Grid was very pleased to commission that report from the IET to get independent analysis of the costs. I know that there is a significant multiple from undergrounding or taking cables sub-sea, but we have required, through the national policy statement, that mitigation aspects and alternative approaches be looked at to preserve our precious landscape.
We estimate that our new, reformed scheme, upon which we are currently consulting, will add just £8 to the average household energy bill in 2020. That is around £50 less than FITs would have cost if we had continued with the previous policy. Obviously, there is a great deal of uncertainty in these numbers, which depend on future technology costs and market growth.
Hard-pressed constituents of mine in Gloucester will be grateful for the Minister’s answer. Does he think there are lessons to be learned from Germany in terms of the total amount of energy consumed by households? If we replicated the amounts used in Germany, that would heavily reduce bills in this country.
My hon. Friend is right. In Germany, although electricity prices are higher, not least because of the support for renewables, bills are broadly comparable with those in the UK because domestic energy efficiency is much better. That is exactly the sort of transformation that we are determined to drive forward in the UK with the launch of the green deal later this year.
We are helping around 2 million vulnerable households through the warm home discount scheme and many more households through other schemes. The green deal and the energy company obligation will provide energy efficiency measures at no up-front cost. We are also looking to help consumers obtain better prices by harnessing their collective purchasing power.
To help businesses with their energy costs, the Chancellor announced a package of measures worth £250 million over the current spending review period.
I am delighted to join my hon. Friend in supporting this particular scheme. It is exactly the sort of scheme that we want to see coming forward. It gives consumers greater buying power; it helps them to negotiate a better price; it is good for them and it is good for the market.
A reduction in energy costs is one way of addressing fuel poverty, but with rising world commodity prices it is unlikely to be seen in the future. The other way of addressing fuel poverty might be to make direct payments to the more vulnerable, but again, given the financial situation, that is highly unlikely. Therefore, energy efficiency is critical. Will the Government look at making energy efficiency measures compulsory and putting them in place across the board?
We have made enormous strides on this through the green deal. We have recognised that in the United Kingdom our gas prices are the lowest in the EU15 and our electricity prices are about the third lowest in the EU15, but the total bill is much higher because our homes and businesses are very energy inefficient. The green deal was the first comprehensive measure introduced by Government to address this and to be rolled out across the housing stock. I know that the hon. Gentleman welcomes the ambition that we are setting out, and we are determined to make this fundamental change.
My Department regularly meets companies from different parts of the supply chain to discuss the next generation of nuclear power stations and how they can contribute to meeting our energy security and carbon reduction goals.
The UK Government are committed to ensuring that UK companies are in a position to compete for the business opportunities that new nuclear can provide, both in the UK and globally.
My constituents will welcome the news that Ministers are working with the supply chain and nuclear reactor vendors to help create and support a globally competitive supply chain. What steps is the Minister taking to ensure that the majority of the UK’s new nuclear plants are constructed, manufactured and engineered by British companies? Will he pledge to include socio-economic factors in the invitations to tender, as so many other European countries do in theirs?
We are keen to learn to be more like the French and to understand how we can do that more effectively in these matters. We work closely with companies such as Areva and Westinghouse, which have assured us that they have a real commitment to developing supply chains here in the United Kingdom. We are working with local enterprise partnerships to ensure that the skills base is there. The partnership between Areva and Rolls-Royce is a fantastic example of how we can develop that in the United Kingdom and then those skills can be taken to the rest of the world.
This time last year there were 54 nuclear reactors operating in Japan. Today there are three. Does not the anniversary of the terrible accident there last year convince the Minister that nuclear is the most fragile, unreliable power source?
No single source of energy is capable of withstanding the force of a multiple earthquake and tsunami. Those were very exceptional circumstances. We asked our regulator, who is well respected, to look into this and see what lessons we could learn, and we came to a different conclusion. We understand why the Japanese Government came to the conclusion that they did, but we see nuclear as an important part of a low-carbon future. We are therefore keen to take this forward, but we will never compromise on safety standards.
Green Investment Bank
I have regular meetings with Cabinet colleagues to discuss a wide range of issues. My Department works closely with the Department for Business, Innovation and Skills on the Green investment bank, given the bank’s potential to play a major role in catalysing private sector investment in the low-carbon economy.
I thank the Secretary of State for that answer and welcome him to his new post. I have been championing Derby as a potential location for the Green investment bank, because we have had one or two knocks to our confidence in Derby and lost some jobs. [Hon. Members: “Too late.”] If I am too late—I have not heard the announcement—I would like to suggest that the Secretary of State works with his colleagues to see what other investments the Government can make in Derby to return confidence to the area.
I know that my hon. Friend is a real champion for Derby and is trying to get investment into the city, but I must tell her and the House that the Secretary of State for Business, Innovation and Skills has announced that the headquarters of the Green investment bank will be located in Edinburgh, with its main transactions team based in the London branch.
In his discussions with the Secretary of State for Business, Innovation and Skills, did the Secretary of State make an assessment of the number of nuclear power stations, green chemicals plants, wind farms or tidal power generators that would be located in the City of London, and does that account for his decision to locate the Green investment bank there?
I think that the hon. Lady needs to read the Secretary of State’s written ministerial statement, which sets out his reasoning in detail. We spent a long time looking into the matter because there were 32 proposals and we wanted to do them justice. I refer her to the statement.
24. Many people in Yorkshire who worked really hard to attract the Green investment bank to Leeds will be gutted by this decision. To compensate for this bad news, will the Secretary of State and his Department commit to giving the Yorkshire carbon capture and storage cluster as much support as possible over the coming months? (98683)
I know how hard my hon. Friend works to promote investment in his constituency and I am sorry that he is disappointed, but he will realise, as I am sure the whole House will, that the Green investment bank will be investing across the country and, therefore, driving our low-carbon economy.
May I unambiguously and warmly welcome—it will be welcome across the whole of Scotland—the decision to site the Green investment bank in Edinburgh? Does the Secretary of State agree that this will also give a further shot in the arm to other sites in Scotland, such as Kishorn in my constituency, that are pursuing renewable energy initiatives with great employment prospects? I congratulate the Government. This is a very good start for my right hon. Friend in his new post.
I thank my right hon. Friend for his welcome. He is right. Edinburgh is an established centre for financial services and it couples that skill with a thriving green sector. That is why I believe my right hon. Friend the Secretary of State for Business, Innovation and Skills has chosen it. I know that my right hon. Friend the Member for Ross, Skye and Lochaber (Mr Kennedy) has been a champion of investment for Kishorn point and welcome the planned investment for redeveloping the point.
In February, Ernst and Young upgraded the UK to fifth in the world for overall attractiveness for renewable energy investment. Cleantech Group estimated UK venture capital investment in clean technology in 2011 to be around $566 million, ranking us third in the world after the United States and China. We have forecast that 4 GW of renewable electricity will become operational in the coming year, which represents a doubling of installed capacity since May 2011.
In advance of the establishment of the Green investment bank, Green Investment UK will, thanks to the Chancellor’s Budget, invest up to £775 million in the green economy in the next financial year alone. This will be a huge boost, along with the other proactive measures that the coalition is taking to boost green growth.
I take my hon. Friend’s point extremely seriously, as do my colleagues. That is why we have a programme looking at the sustainability of the supply chain. I would be happy to welcome him to the Department to meet our officials so that we can fully address any concerns he might have on the matter.
The best low-carbon technology is probably insulation. A recent report on energy conservation suggests that we could save the economy more than £1 trillion by investing in insulation instead of in nuclear power. Has the Minister looked at that report?
I agreed with every word, almost until the end of the hon. Gentleman’s question. He is right that energy efficiency, including insulation, is an absolute no-brainer. We have failed to do as much as possible in the past. With the green deal and the energy company obligation, we hope to transform the energy efficiency of homes and businesses in the UK.
We are committed to helping people, especially those in low-income, vulnerable households, to heat their homes more affordably. We are helping about 2 million low-income households through the warm home discount scheme this year. In October, we announced the joint “Check, Switch, Insulate to Save” campaign to help all consumers save money this winter. We are also looking to help consumers harness their collective purchasing power.
I thank the Minister for his response. As the real value of wages stagnates and unemployment increases, energy prices are a real problem for people in my constituency, particularly those on low incomes. Dundee Labour party has pledged to negotiate a 20% reduction in energy prices if it is elected to lead the council in May. I ask the Government to take the lead from Dundee Labour party and do everything that they can to reduce energy prices, so that those on low incomes do not have to make the awful choice between eating and heating.
I would be more than happy to have a meeting with the people from the hon. Gentleman’s constituency in Dundee to understand more about the scheme that they are putting forward. As he will be aware, last year gas prices were, on average, 30% higher worldwide than the year before and oil prices peaked at their highest ever level in sterling just last week. Global prices have been going up and we therefore need to find new, imaginative ways of helping consumers. Such collective purchasing agreements can be an important way of reassuring people and of ensuring that they get the best deal. I would be delighted to meet those people.
Thank you, Mr Speaker. The Government define fuel poverty as a person spending a tenth of their income on fuel. Motorists in Harlow who are on average earnings spend a tenth of their income on petrol and diesel costs. Does that not mean that motorists on low and average earnings are facing fuel poverty? Will the Government do everything that they can to continue down the path set by the Chancellor in the last Budget, and reduce the cost of petrol and diesel at the pumps?
My hon. Friend makes a point that will resonate across the House. Members of Parliament from every constituency, be they urban or rural, are very concerned about this issue. As I said, oil prices peaked at their highest ever levels in sterling last week. We are therefore facing a global issue. My right hon. Friend the Chancellor has been listening actively to what is being expressed on this issue and will make further announcements in the Budget.
This is my first departmental Question Time as Secretary of State for Energy and Climate Change. Since my appointment in February, I have been rather busy, following on from the successes of my predecessor. I have opened the world’s largest offshore wind farm off the coast of Cumbria, launched the energy efficiency deployment office to help the Government deliver their energy efficiency policies, and published reforms to the feed-in tariffs scheme. In addition, the Department of Energy and Climate Change and Ofgem have published a report on cutting the costs of offshore wind connection.
I welcome my right hon. Friend. Will he confirm that the Government are committed to exploring the full range of possible renewable technologies —marine, tidal, geothermal and so on—as part of a portfolio approach to a mixed energy economy, which plays to the strengths of this country both economically and environmentally?
My hon. Friend is right that this country is blessed with huge potential for renewable industries. We can therefore seek a transition to the low-carbon economy, support energy security and build a green economy, which will benefit businesses, create jobs and increase our exports to the world.
The Labour Government committed £60 million to supporting manufacturing for offshore wind in this country. In October 2010, the Government promised to continue our scheme. Eighteen months on, when there are reports that manufacturers are holding off on investing in offshore wind in Britain because of uncertainty about Government policy, why has only one grant been awarded and why does 98% of the budget remain unspent?
The Government are supporting the wind turbine industry in this country. It was under the last Government that a factory closed, the Vestas factory in the Isle of Wight. The right hon. Lady needs to examine our record, which is very strong. We are seeing more and more investment in the industry.
I asked a pretty straightforward question. The Government have signed up to a £60 million budget, and so far only one grant has been provided. Why is that the case, and why does 98% of the budget remain unspent?
Twice this week I have asked the Government why they are failing to back British businesses, and twice they have had no answer. After his leaked memo, we now know that even the Business Secretary agrees with me. On Monday, I said:
“We have to do more to develop our supply chain and to support manufacturing in this country”.—[Official Report, 5 March 2012; Vol. 541, c. 597.]
On Tuesday, the Business Secretary said that
“there is as yet little attention given to supply chain issues.”
That is a straight quotation from his memo. Is not the truth that the Government’s mixed messages and failure to get behind British businesses mean that jobs and investment in industries that could come to this country are now going overseas?
The right hon. Lady is wrong on this point. Many companies from around the world are looking to the UK as the premier place to invest in the offshore wind industry. She is talking down great places such as Hartlepool that want to attract investment in the industry. We are looking at the supply chain, and we have set up the offshore wind developers forum, which has pledged that 50% or more of the work in the supply chain will be in Britain.
I am grateful to my hon. Friend for his question, because I have today announced £3.5 million to train green deal assessors, delivering on the Deputy Prime Minister’s announcement last March of the creation of 1,000 green deal apprenticeships. That money will help hundreds of people gear up for the green deal and ensure that the scheme is a real success on the ground. I have also announced today £10 million of innovation funding to improve the energy efficiency of non-domestic buildings.
T2. Will the Minister congratulate the firm of Mabey Bridge in Chepstow, which was started last year? It has just doubled its work force to 200 and has a full order book for 35 wind power towers. Will he take this opportunity to denounce the doubters on his Back Benches and give a clarion call of support for wind as a job-rich form of energy that is British, eternal and clean? (98685)
The hon. Gentleman gives a perfect answer to the right hon. Member for Don Valley (Caroline Flint). That is an example of a company investing to take advantage of the opportunities that exist. I was delighted to be able to open the factory extension last year and to meet the company again last week. It is doing a tremendous job, and it is a great British success story.
T6. In Warwickshire, we are fortunate to have many people who are seeking to design community-based renewable energy solutions, ranging from solar panels on public buildings to hydroelectric power. In the run-up to the Budget, will the Minister ask the Treasury to consider extending community investment tax relief to matters such as investment in community energy, which delivers both social and economic benefits? That could provide a significant incentive for people to invest in such schemes. (98689)
I thank my hon. Friend. He, like me, is a great champion of community energy, but I am afraid he is tempting me down the path of forecasting the Budget, which is a somewhat career-limiting move for junior Ministers. I can say, however, that we have established a community energy contact group to discuss those issues, about which he knows I am particularly passionate.
T3. Does the Secretary of State support WWF’s earth hour on 31 March, when across the world, everyone will be encouraged to switch off lights for one hour to highlight the issue of climate change? What will he do to promote earth hour? (98686)
T8. Many of my constituents are concerned about the number of proposals for biomass plants that are springing up in an area of high-value agricultural production. In these times of concern about food security, what steps is the Secretary of State taking to ensure that we do not use high-value crops in such plants? (98692)
The Government will not allow the growth of bio-energy to compromise food security. There are many other feedstocks for bio-energy, including wastes. Crops for energy can be grown in ways that do not compete with food, for example, through using marginal land. We want our farmers to share the economic opportunities offered by bio-energy as well as realising the benefits of clean, secure energy for the country.
I do not recognise the figure that the hon. Lady gave. The warm home discount scheme is proving a real success, but it is just one in a suite of policies that aim to help the poorest and most vulnerable families. However, if she has new evidence, I would be happy to meet her to discuss it.
T9. The replacement of the levy exemption certificate with the carbon support price will have an adverse effect on industrial combined heat and power plants, which often feed energy-intensive industries such as Dow Corning in my constituency. What action is the Minister taking to overcome that, and will he offer reassurance that CHP plants will not be worse off under the new regime? (98693)
We are determined to support CHP, which we see as having an important future in our energy mix. As announced in last year’s Budget, the Chancellor will set out how CHP will be treated under the carbon price floor in the Budget this month. That will form part of our wider strategic aim of reducing emissions in industry, which we will explore further through our forthcoming heat strategy.
T7. I have previously raised in the Chamber the number of people who are on prepayment arrangements and expensive tariffs. The Minister assured me that that would be monitored. May we have an update on how many people have now switched to direct debits? (98690)
My hon. Friend raises one of the most critical issues at the heart of the nuclear debate. The Government have taken forward significantly the programme for the long-term deep disposal system for our legacy waste in this country. We are trying to advance that programme by at least a decade and discussions are continuing about that. We also recently published the waste arrangements for any new nuclear operators, with which they will have to comply for their plants to go forward.
The main source of biomass in the UK is wood, and the renewables obligation is distorting the competitiveness on price. Having had very good meetings with the Minister, I recently met representatives of the industry, who tell me that the issue is now critical. What progress has been made?
As my right hon. Friend the Secretary of State said, just as we are determined to ensure that biomass does not compromise food security, we also want to ensure that biomass activities can have other good uses, for example, in wood panelling, furniture and building. There is a very strong industry, particularly in Scotland and the north of England, and we have been pleased to have good engagement with the right hon. Lady and the industry. I want to reassure her that we will continue with that because we want an outcome that benefits all parties.
In response to a freedom of information request, the Department confirmed that seven documents were prepared for the Copenhagen summit that show the cost to the UK of a 30% cut in EU emissions. When he was Energy Secretary, the Leader of the Opposition made the ludicrous claim that disclosure would damage international relations, and he vetoed it. Given the Minister’s personal commitment to a more transparent approach under FOI, will he publish the seven documents so that taxpayers know the costs that they would bear?
Let me reassure the hon. Gentleman that we have looked into the matter. Any loss of a memory stick is a matter of concern, but we have looked at the information that was contained in it, and it was not critical. Although the loss is inconvenient and irresponsible, it poses no threat to national security.
As the promoter of the Warm Homes and Energy Conservation Act 2000, which tasked the Government with eliminating fuel poverty, I know that my hon. Friend will share my disappointment that the previous Labour Government failed to do that. Now that we have the report, will he act on the Macmillan recommendations about vulnerable cancer patients?
My hon. Friend is a huge champion of fuel poverty—[Laughter]—and is absolutely right to be proud of his record in addressing that issue. I should have said that he is a champion of action on fuel poverty. He also is absolutely right to raise concerns about the treatment of vulnerable customers, including those with cancer and other potentially fatal illnesses. I would be happy to meet him to discuss that further.
The Secretary of State has today informed us where the headquarters of the Green investment bank will be, but has he also broken the news to Edinburgh that it will host not a bank but a cash-limited fund until at least 2017? Does he intend to go to the Treasury on behalf of Edinburgh to seek permission for the green investment fund to become a bank substantially before that date?
I was concerned to read the scaremongering in The Guardian today about how nuclear power station sites are at risk of flooding. My understanding is that there has been no cover-up of the Department for Environment, Food and Rural Affairs report on flooding, but we know that the Department of Energy and Climate Change has taken action through the Weightman report to say that coastal defences must be maintained. Does the Minister agree that such scaremongering is not helpful to residents in Suffolk?
I can give my hon. Friend an absolute assurance on this. We will not compromise on safety in any respect with regard to new nuclear power stations. That is an integral part of the national policy statements and the planning process. We have the most effective and toughest regulatory system anywhere in the world and one of the most highly regarded international inspectors is leading the process. We will not compromise on safety in those areas.
Green economic development will be the central focus of the United Nations conference in Rio in June. Given that, which Ministers will attend? Now that the Brazilian Government have changed the date to 15 June in deference to the Queen’s diamond jubilee, will the Prime Minister himself attend?
Just before we move on to the business question, I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Acts:
Supply and Appropriation (Anticipation and Adjustments) Act 2012
Live Music Act 2012
Public Services (Social Value) Act 2012
Domestic Violence, Crime and Victims (Amendment) Act 2012
Welfare Reform Act 2012
Consumer Insurance (Disclosure and Representations) Act 2012
Bank of Ireland (UK) plc Act 2012.