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Topical Questions

Volume 548: debated on Thursday 12 July 2012

Since my Department’s last Question Time we have published a draft Energy Bill for pre-legislative scrutiny, set out the next steps for the green deal, publishing the detailed plans and secondary legislation, and we have helped to broker an EU energy-efficiency directive. There is also decarbonising power generation, a new market for energy-efficiency and European leadership on international climate change—it is an ambitious agenda.

I thank my right hon. Friend for that comprehensive answer. However, may I ask him what steps his Department is taking to ensure that Horizon Nuclear Power switches from its current owner, E.ON, to a new one with the minimum of disruption to nuclear build in Britain?

My hon. Friend will know that, ultimately, this is a commercial decision for the owners of Horizon Nuclear Power—RWE and E.ON—but we have been working with them to facilitate investors coming forward to talk to them. We are very optimistic that we will see the Horizon project sold to another consortium and that new nuclear build will continue.

Since this Government came to power, we have seen: the chaotic mismanagement of cuts to solar power; delays to the green deal; delays to the borrowing powers of the green investment bank; cuts to the Warm Front scheme, with far fewer people getting a chance to avail themselves of that support, as my hon. Friends have said; and an Energy Bill that was laughed out of the room by the Select Committee. We have also heard in questions today that the assessments for that Bill are going to have to be further revised. This week, we also learned that the Department has underspent its budget by nearly £400 million. Nobody is against the efficient management of office budgets, but this is a ministerial team who fudge decisions, make the wrong choices, cannot keep to timetables and are incapable of managing the budget. Is this not another example of the omnishambles that is spreading through this Government like a virus?

The right hon. Lady is getting a name for inaccuracy on some of these points. Let me deal with the new issue that she has raised—the Department’s underspend. Some people would congratulate the Department on underspending—

She says £400 million, but I am afraid that she needs to look at the facts, because the real figure for underspend is £266 million. That is still a large underspend, but I have to tell her that £177 million of that comes from higher energy trading income from the Nuclear Decommissioning Authority’s programme. So better performance by one of our non-departmental bodies is producing more money for the Treasury—I would have thought that she welcomed that.

T2. The residents of Hastings and Rye are looking forward to cheaper energy bills following the implementation of the green deal. What plans does the Minister have to make sure that residents of social housing also get the benefit of that? May I also invite him, as Minister and constituency neighbour, to come to Rye to share that information with AmicusHorizon? (116523)

I congratulate my hon. Friend, who has taken a very close interest in this issue of how we are going to help the poorest people in our society access the green deal and to improve the housing stock for everyone. I can assure her that we are working very closely with both the Local Government Association, the National Housing Federation, and with individual local authorities and community groups. I would also be delighted to come across the border and have a round table meeting to see how we can drive forward the agenda in Hastings and Rye.

T3. Ministers will be aware that the Welsh landfall for an optimal Severn tidal barrage will be in my constituency. Given the need for a major increase in renewable energy and the potential for creating nearly 40,000 jobs, will Ministers provide us with some clarity on what the Government will do to promote this project? (116524)

I am sure that the right hon. Gentleman is aware that a year or so ago we published a report, which had been commissioned by the previous Government, to look at the barrage proposals and the lagoon proposals. It showed that the largest of those would cost £30 billion-odd, and we believe that in the current climate that is unaffordable. We know that work is being done on looking at other ways of bringing finance into that. We have said that we will keep an open mind on the proposal, but it needs to be done at a cheaper cost to consumers.

The Department has been a really good friend to the emerging deep geothermal energy industry in this country, through regional growth funding and direct support. Can the Government make that last commitment to give the industry the five renewables obligation certificates it needs as part of the review, which would enable the first commercial deep geothermal power station to be opened in my constituency?

My hon. Friend will not have to wait very long before we provide the final decisions on the renewables obligation banding review. She might also be interested to learn that I recently went to Iceland to sign a memorandum of understanding with the Icelandic Government about how we can share some of their knowledge as the world’s leading economy in geothermal power and heat, and see how that can be brought to bear to assist developments such as those in her constituency.

T4. Since this rather miserable Government came to power, pensioners in my constituency have seen their energy bills rise by £200. If the Government insisted that the big energy companies put those pensioners aged over 75 on the cheapest possible tariff, 5,500 pensioners in my constituency would see their bills drop by £200. Is it not time that the Government stood up for senior citizens rather than the big energy companies? (116525)

I have good news to cheer up the hon. Gentleman. Under the warm home discount, 1 million of the poorest pensioners will get £130 off their bills in this financial year. Under the voluntary agreement negotiated by my Department and announced by the Deputy Prime Minister in April, the big six will ensure that customers who are getting the warm home discount are informed that they can move to the cheapest tariff, if they are not already on it, which will augment the benefit from the discount.

Order. May I remind the House that topical questions are supposed to be significantly shorter, and the same goes for the replies? We will then be able to get more colleagues in.

Over the past few months, there has been a significant increase in the level of electricity imports, mostly cheap nuclear from France, through the interconnector. Indeed, over the past 24 hours we have imported more electricity by a factor of two than we have produced from offshore and onshore wind. That is a big policy failure and is costing us thousands of jobs. How can we address it?

I disagree with my hon. Friend, as the interconnector is an essential part of our energy security. We have seen a new interconnector introduced to Holland and a new connection is coming through to Ireland. We are exploring other aspects of the matter, too. We think that it is a fundamental part of energy security and delivering low-carbon electricity at the cheapest cost to consumers.

T5. What steps is the Secretary of State taking to ensure that energy bill standing charges do not unfairly hit the fuel poor and other low-income consumers, especially pensioners? (116526)

The hon. Gentleman will know that Ofgem is undertaking a retail market review that is considering standing charges. We expect its deliberations to be published in the autumn. Given that it is an independent regulator, I am sure that the hon. Gentleman will agree that I should not pre-judge its conclusions.

Investing in a balanced mix of low-carbon energy projects has huge job creation potential. The CBI’s analysis has shown that the green economy currently supports 940,000 jobs, two thirds of which are outside London and the south-east. Does the Minister agree that that reveals how the green economy can support a balanced nationwide economic recovery?

I strongly agree with my hon. Friend and pay tribute to the work she does in her constituency to promote energy efficiency and renewables. She mentions the CBI report and it is clear that the CBI’s director-general, John Cridland, is very supportive of the Energy Bill and our attempts to increase investment in energy infrastructure, which he sees as a key part of this Government’s growth policy.

T6. Under Nottingham’s decent homes programme, more than 15,000 tonnes of carbon will be saved each year. Nottingham City Homes, the local arm’s length management organisation, can use decent homes funding to lever in additional benefits from the green deal’s energy company obligation, but that funding remains indicative for 2013 to 2015. What discussions has the Secretary of State had with the Department for Communities and Local Government on decent homes funding and will he join me in praising the environmental benefits achieved by Nottingham’s “Secure Warm Modern” programme? (116528)

I would go further and praise Nottingham for a whole range of things that it is doing. It has a very progressive agenda and I look forward to visiting Nottingham in the near future to engage on how we can drive that agenda forward. I cannot comment in detail on something that is the responsibility of DCLG—the decent homes programme—but I can say that we are keen for the green deal programme to leverage in all sorts of additional finance where possible. It is about not just energy efficiency but the wider sustainable regeneration of areas such as Nottingham.

The Department’s own figures suggest that, in 2009, 50,000 people were put into fuel poverty because of the wind element of renewable energy. Will the Secretary of State give up-to-date figures on that?

I saw the press reports that made that allegation and I am afraid that I do not agree with them at all. The press article was trying to suggest that particular amounts of money that come from consumer bills to support the renewables industry was the top bit that would push people into fuel poverty. It was a very poor analysis and we completely reject it.

T7. The Minister failed to answer the question earlier about when shale gas would come on line, yet this source of energy would create real jobs and partially decarbonise the energy industry as well as lowering fuel bills. Why does he not get a move on? (116530)

This is not a matter purely for the Government. Companies here are exploring for shale gas and seeking to identify how much of the resource there may be. They will then need to apply for a licence, get permission from the Health and Safety Executive and get approval from the Environment Agency. A range of different bodies, in addition to local planning permission, are a vital part of the process. It may well have a role to play, but it has to be done with the strictest environmental and safety protections.

Does my hon. Friend agree that the continued growth of UK solar vindicates the approach of this Government, who keep returns attractive and make the money go further, in stark contrast to the limited ambitions and dodgy maths of a previous Secretary of State, now Leader of the Labour party?

Absolutely. We will see far, far more deployment now in the rest of the Parliament than we would have done if we had carried on with Labour’s very expensive, unfit for purpose, form of subsidy. Moreover, there is other exciting news. I am delighted that Sharp, the leading European manufacturer of solar, has announced that subsequent to the reforms, it will move its European manufacturing base from Germany to the UK—a real vindication of our reforms.

The Heath business and technical park in Runcorn in my constituency is one of the most important employment sites in the north-west, but the decision by SP Manweb plc to apply for a wayleave to retain electric lines on the site is putting at risk a multi-million pound investment in jobs and houses, which has been made worse by the fact that the Department will not be able to make a decision on this until well into next year. Will the Secretary of State intervene quickly to ensure that the investment does take place and is not put at more risk?

I am interested to hear the hon. Gentleman’s comments. I am not aware that he has written to me on the subject. If he has done so, I will be very keen to talk to him to see if there are things that we can do to speed up the process, because I understand the impact that it could have on employment in his constituency.

Does the Minister welcome the news that nearly a third of the 900,000 new jobs have come into the green economy, which is obviously underlined by the excellent news that Sharp is moving to this country from Germany?

I strongly agree with my hon. Friend. The House recently debated the green economy, and Members on both sides of the House gave examples from their constituencies of big investments and job creation as a result of our policies and the green economy.

There is real concern, especially among small innovative companies, that the Department’s smart meter programme, which should help reduce energy bills, is behind schedule, disorganised, has no technical standards to help small companies take part and is unco-ordinated with either the smart grid programme or spectrum release. Will the Minister provide some reassurances?

Let me provide the hon. Lady with reassurances. We have sped up the programme that we inherited and brought it forward by 12 months, we have been going forward in a very collaborative approach with industry to get its buy-in to all the key decisions, and we have submitted the technical specification for European Commission approval, which is happening in two stages, with one going through now and the second shortly. We see this as a very important aspect of energy efficiency and putting consumers in power, and also for real business opportunities for large and small companies alike.

Energy bills are still impenetrable to many households. What progress are the Government making to ensure that energy companies improve the transparency and clarity of their domestic bills?

As we said earlier, work is under way on this. Ofgem, through its retail market review, is looking at tariff simplification, which is important. As my hon. Friend will know, since becoming Secretary of State, I have been pushing the idea of collective switching and collective purchasing, and simpler bills will be a big facilitator for that.

Like my hon. Friend the Member for Scunthorpe (Nic Dakin), I have concerns about what the Government are doing to maximise the use of UK steel in the low carbon economy and all the opportunities that that brings. I understand that the Minister’s answer was encouraging, but does he appreciate that we must get this right now, because the deteriorating market for steel is impacting on workers in my constituency today?

Let me reassure the hon. Lady that that is absolutely at the heart of what we are doing. We are determined that there will be a major industrial gain for this country from building the new low-carbon facilities, as well as some of the older type of facilities. We have strategies for the oil and gas sector, the nuclear sector and the renewable sector. Throughout this area we want to see real industrial gain, often bringing new employment to areas that have been hard hit for a very long time.

Following on from the CBI’s report, the New Anglia local enterprise partnership has just published its manifesto for promoting green growth over the next three years. Will the Secretary of State and his colleagues across Government work with the LEP to discuss how its manifesto can best be implemented?

We are keen to hear from any LEP across the country. I know that my right hon. Friend the Secretary of State for Business, Innovation and Skills and his ministerial team work closely with LEPs. Across Government we want to support their work in promoting the green economy.

Has the Minister spoken with the developers of large-scale wind farms who have difficulties because their development periods straddle the end of the renewables obligation and the start of—if they come to pass—contracts for difference? Does he consider that the end of the RO, if that is necessary, should be in 2020, rather than 2017, in order to accommodate those problems?

We are not persuaded by that argument. We think that there needs to be a clear switchover date and are giving a long lead-in time, to 2017, so that there is certainty. Alongside that, we are giving people the choice of whether they go with the existing renewables obligation mechanism or move to the new contract for difference mechanism so that they have the best opportunity to decide what works for them in the longer term.