Skip to main content

Energy and Climate Change

Volume 557: debated on Thursday 31 January 2013

The Secretary of State was asked—

Electricity and Gas Markets (Europe)

The UK strongly supports the single energy market, which will bring benefits to the EU economy by increasing competitiveness and energy security. Last week, I met my Irish counterpart to sign a memorandum of understanding on exploring the scope for trading renewable energy. In November, I attended the first meeting of the North European energy dialogue to discuss the growth potential of energy infrastructure investment with ministerial colleagues from across northern Europe. I hope to host a follow-up meeting in London this year.

I am grateful to the Secretary of State. I would be even more grateful if he reminded his Conservative colleagues that we can shape the single market only by remaining a member state of the European Union. Does he agree with the Commission that getting member states back on track to complete the single energy market is critical as it will reduce bills for consumers across Europe by €100 a year, increase Europe’s growth rate by 0.8% of GDP and create 5 million jobs across the energy industries?

The hon. Gentleman is absolutely right. The single energy market is an important development for Europe and the UK. The coalition Government have been united in support of developments in the single energy market in Europe. It is in Britain’s interests and we will pursue it.

Although the UK has substantial reserves of gas in the North sea, we import a lot of gas. That has an effect on our energy security. What are the latest figures for the proportion of gas that we import from Russia and by sea from the middle east?

I am grateful for my hon. Friend’s question. We do not use directly much gas from Russia, but we are happy to explore that potential. It is in the interests of this country’s energy security that we have a diverse supply of gas. I do not have the exact figures for the middle east, but of the gas that is imported in this country, about 40% comes from there. I am not sure what proportion of the total gas that is consumed comes from the middle east.

Green Deal

2. What steps he is taking to encourage energy companies to deliver green deal finance through small and medium-sized enterprises. (140452)

There will be huge opportunities for small and medium-sized enterprises in delivering the green deal and they are vital to its success. Our SME forum for the green deal, which has been ably chaired by the right hon. Member for Greenwich and Woolwich (Mr Raynsford), has delivered an excellent set of recommendations on which we are acting.

What advice would the Minister give my constituent, Mr Ged Smith, who runs a local energy efficiency company? Like many people in a similar position, he is on the brink of going out of business, at the cost of hundreds of jobs, because there is no sign of any funding from the utility companies through the energy company obligation, as they say that they are too busy tying up the loose ends of the carbon emissions reduction target to engage in discussions about the ECO?

I am afraid that that is not absolutely correct. I am pleased to report to the House that more than 1,000 measures have been delivered under the ECO in the past few days, even though Warm Front came to an end on 19 January. It is early days and there is a transition, but we are working with SMEs to make that transition work and the long-term prospects are bright.

I welcome the launch of the green deal this week. Consumers now need to know that it is available and must start signing up. What is the Minister doing to let people know that the scheme is available and to encourage them to join it?

Clearly the Government have a role. My hon. Friend may have seen the green deal adverts that have run in the press. They will continue to run this weekend and the weekend after. We will also be launching a digital campaign. This is a tightly focused, value-for-money campaign, not a huge advertising splurge. The real drive will come from the individual offers. What marks the green deal out as different from previous Government energy efficiency programmes is that there will be huge choice, huge competition and lots of market participants.

Does the Minister share my disappointment about the fact that many of us thought that the green deal would be an opportunity for small and medium-sized businesses up and down the country not only to fit smoke alarms and CO monitors at the same time, but to prepare for smart metering? I now understand that CO alarms will not be fitted under the green deal, unlike I was led to believe, and that smart metering has been put on hold.

First, smart metering has not been put on hold; we have a very ambitious roll-out. The green deal has got off to a good start and had 42,000 visitors to its website on Monday alone. I understand that CO alarms are part of the green deal assessment, but I will willingly discuss that with the hon. Gentleman, who I know has a long history on the issue.

I welcome greatly the launch of the green deal and hope it will be successful. Will the Minister ensure that, among others, the chambers of commerce and all trade federations are informed about the green deal directly, and that all local authority libraries also contain the information?

We are making the information available widely online and we have a range of outreach activities, including round tables. Local authorities are a particularly important partner in the green deal, and I am delighted that a number of the largest metropolitan areas have been core partners in the “go early” project. I will ensure that the organisations mentioned by the right hon. Gentleman get the information.

Green Energy Technologies

It is estimated that replacing and upgrading our electricity infrastructure over the next decade will require approximately £110 billion of capital investment. That will provide investment opportunities for a mix of low-carbon technologies, with all the exciting prospects that brings.

I thank the Minister of State for that answer, not least because so many firms in my constituency are clearly interested in green technologies. Does he agree that the Government have taken measures to demonstrate clarity and consistency of policy, and that that should give comfort to investors, particularly bankers, in supporting small and medium-sized enterprises?

I think it was John Ruskin who said that when we build we must think that we build for ever, and the Government are determined to build a framework of certainty that will allow investment in a range of generating technologies to guarantee our energy security. Our ambitions are no less than that.

If things are going so well, will the Minister tell the House why 17 companies are taking his Department to court for billions of pounds of compensation because of cuts to feed-in tariffs, why 80% of the solar industry has collapsed over the past year in respect of installations, and why companies in my constituency are screaming at me about the Government’s failure to develop solar industries?

The right hon. Gentleman was a distinguished Home Office Minister under the previous Government, so he will know that when the Government take on major challenges, such as the one I have described, it is not, of course, an easy road to tread. The Government’s determination to reform our electricity market and introduce the changes necessary to guarantee our energy security is, by any comparison—certainly in comparison with the Government of whom he was a part—profound, valued and welcomed by the vast majority in the industry.

One technology that could make a huge difference in this area is anaerobic digestion. I have had discussions with companies in the field, and despite interest from the green investment bank they report that they are still having difficulty in accessing finance. What more can the Minister do to help with that problem?

It is critical that both the cost and availability of capital underpin the investment I have described, and that is particularly true, as the hon. Gentleman says, for small and medium-sized enterprises. We are working on that with the Department for Business, Innovation and Skills—my former Department—but given that he has raised the matter in this way, I will look at it again and report back directly to him.

We heard the Minister talk about the certainty and clarity of the new arrangements and contracts for difference, but those of us serving on the Energy Bill Committee have in recent weeks heard evidence from ScottishPower, the Royal Bank of Scotland, RenewableUK and others, about the importance of the three-year transitional period. This morning we have the opportunity to vote for a Labour amendment to the Energy Bill that would ensure that if there is any delay, that three-year period of transition will remain. Will the Minister confirm whether he will be voting for that amendment, and if not, why not?

I never confirm what I am going to do about amendments until I have heard the arguments, and as I am sure the hon. Gentleman knows, it would be premature for me to consider his amendment in the House at this time and not in Committee. On the specifics of the issue, we have allowed an overlap between the renewables obligation and the new arrangements, specifically and particularly because we want businesses to be able to adapt to the new system.

Fuel Poverty

The green deal and energy company obligation will provide considerable support to make homes more energy efficient, reaching some 230,000 low-income and vulnerable households each year. Our warm home discount scheme supports 2 million households in total—this winter it has already helped more than 1 million of the poorest pensioners. We also make cold weather payments and winter fuel payments.

The Government have recently consulted on a new definition of fuel poverty to ensure that help is targeted at those who need it most. Will the Minister confirm what progress has been made?

I am happy to do so, as I know my hon. Friend takes an interest in fuel poverty. Professor John Hills published his final report in 2012. It highlighted serious flaws with the current methodology. We have therefore committed to moving away from that definition and consulted on a new approach that will more accurately measure the problem. We will publish our response to the consultation early in 2013. In addition to changes to the definition, we have announced that we will publish, for the first time since 2001, a refreshed strategy for tackling fuel poverty this year, and ensure that our resources are being used as effectively as possible.

One group that suffers most from fuel poverty is those on prepayment meters. Hon. Members have heard evidence from witnesses in the Energy Bill Committee that the Government’s proposals will make reductions to the lowest tariff only within the type of tariff people are already on. How will that help those on prepayment meters?

Those people should also see reductions; they certainly will not be stranded on previous deadweight tariffs.

The Government have claimed that the new energy company obligation will be bigger and better than the fuel poverty and energy efficiency schemes that came before it. Why, therefore, could up to 60% of ECO funding end up going to people who can already afford to improve their homes, and not to those in fuel poverty?

The fact is that a minimum of £540 million a year under ECO will be directed towards the fuel poor. That is a minimum; we expect far more to end up in low-income areas as ECO rolls out, and as we upgrade our housing and finally come up with the solution in respect of retrofitting that Labour, in 13 years, failed to offer.

The Minister can dodge the question as much as he likes, but the facts speak for themselves. Out of this year’s ECO budget of £1.3 billion, just £540 million will go to people in fuel poverty. That is less than the budget for people who can afford to insulate their own homes, and less than half the support available last year. Is that not why, according to the Government’s impact assessment, ECO is forecast over the next 10 years to lift just 250,000 households out of fuel poverty—50,000 fewer than fell into fuel poverty this winter alone?

I remind the right hon. Lady that, while she was in government as a Minister, fuel poverty rose from 2 million to 5.5 million. This Government are committed to doing something about it. Rather than crying crocodile tears, perhaps she should recognise that that £500 million-plus is the absolute minimum we are spending on the fuel poor. We expect to spend a lot more.

Energy Bills

We have a range of initiatives to help people with their energy bills, including tariff reforms, energy saving programmes and additional help for those on the lowest incomes. From our proposals to help get consumers on to the cheapest tariffs to the green deal, and from the warm home discount to our promotion of collective switching, this Government are working hard to help people to keep their energy bills down.

As payday loan adverts appear all over the receipts for prepayment meters and their rates remain artificially high, what advice do the Government and the Secretary of State have for those who have to take out payday loans to pay their energy bills? Does he think it is a good or a bad thing?

The hon. Lady is a real campaigner on payday loans and I congratulate her on her work. She knows an awful lot about interest rates on unsecured credit, including payday loans, and how high they can be. I therefore hope she tells Labour Front Benchers about them. They have criticised the interest rate on the green deal, but that is one of the most competitive interest rates around for unsecured credit. The green deal is a good job, and will help everyone who is suffering from fuel poverty.

The big six manipulated the previous schemes that Labour put in place to help people with energy efficiency measures to get their bills down by sending out light bulbs. This Government have started a new scheme that will not be open to fraud, and that will include measures that will actually bring people’s bills down. Can the Secretary of State update the House on the progress of the new energy company obligation?

My hon. Friend is absolutely right. While the carbon emissions reduction target had its successes, more than 300 million light bulbs were provided in the early years of the scheme and we estimate that approximately a third of them are still lying unused in cupboards. There was no doubt that we needed to reform the CERT. She is absolutely right to say that the ECO is a much better scheme. As the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) said, it is already under way and having a real effect in bringing help to people.

uSwitch proposed an industry-designed web service to facilitate groups switching between energy suppliers, helping consumers get a better deal on their bills. Will the Secretary of State consider supporting incentivising companies to sign up and provide portable billing data by offering a temporary tax break to help cover the costs?

I am grateful to my hon. Friend for his question and I will certainly look into that idea, but can I just tell him how many things the Government are doing to support switching, not least our support for collective switching? One of the advantages of collective switching is that it can get even better deals for people than the normal switching we have seen in the past. It can also reach out to the most vulnerable and to the people on the lowest incomes. That is why the only criterion for our competition, Cheaper Energy Together, which this year will see 94 councils involved in collective switching schemes, was that the fuel poor should be involved.

I do not recognise where the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), got his figures from when he answered the previous question, because under the previous Labour Government 1.75 million people were lifted out of fuel poverty. When next year’s figures come out, which will show what has happened since the general election, does the Secretary of State think that the number of people in fuel poverty will have increased or decreased?

I am grateful for the chance to answer a question on this issue, because the report that my predecessor commissioned from Professor John Hills is a serious report, and I urge all right hon. and hon. Members to read it. It talks about how we measure fuel poverty and shows that some of the statistics we have used in the past have been deeply unhelpful in tackling fuel poverty, not least because they failed to identify the people who were in grinding fuel poverty year in, year out. The proposals put forward by Professor John Hills will ensure that the really poor, who never escape fuel poverty, are identified and that we can give them much greater help. That is the real debate we should be having, not this exchange of statistics that gets us nowhere.

Fuel Poverty

The latest annual fuel poverty publication estimates that during the first year of the coalition Government, fuel poverty fell by 500,000 to 3.5 million households in England. It is projected that the number of households in fuel poverty remained the same in 2011, but may rise again in 2012.

I call Mrs Linda Riordan. [Interruption.] I do apologise. I thought the Minister of State had completed his answer, but there were further joys to behold and I did not realise that.

Since the Government came to power, the average energy bill has risen by more than £300 a year—a big issue for my constituents, with all the other cuts going on. Is it not a fact that the Government have halved their support for people in fuel poverty?

No, that is not the case. The hon. Lady knows that during the previous Parliament fuel poverty rose from 2 million to 5.5 million, and it continues to be a huge issue. The only way we will tackle it is not by chasing gas prices, but tackling the underlying cause—the fabric of our homes—and creating better, warmer and cheaper homes for people to live in.

In Oldham, more than 17,600 households —one in five—were in fuel poverty in 2010, but with energy bills up by as much as 20% that figure is likely to be much higher today. Oldham council is not content, however, to let the most vulnerable people in society suffer, and through a fair energy campaign, it is ensuring that people in my constituency can keep their homes warm without worrying about hefty energy bills. Will the Government take a lesson from Oldham council?

We are working collaboratively with local authorities up and down the country, which have a key role to play in delivering the green deal and ECO. It is by an area-based, street-by-street roll-out, rather than by chasing gas prices, that in the long term we will deal with fuel poverty once and for all.

My local borough, Stockton-on-Tees, is a national leader in tackling fuel poverty—we have had a warm zone initiative, a go warm campaign and now a hard-to-heat homes campaign—but it takes real investment to make these things happen. Energy companies are using consumers’ money to promote and install energy efficiency measures, but why will the Government not do the right thing and restore Government investment in energy efficiency measures, instead of leaving it to expensive loans that will cost consumers more than they might save?

By and large, consumers and taxpayers tend to be the same people. We are determined to get far better value out of our energy poverty eradication programmes than the previous Government did, and we will demonstrate that by getting more measures taken for less and bringing in competition. The green deal will, for the first time, let the fuel poor make real choices, as opposed to the monopoly one-size-fits-all solution of the previous Government.

Green Deal

The green deal is a completely new market-led initiative for installing energy efficiency measures. We expect demand to build over time, so forecasts are difficult, but the green deal impact assessment estimated that about 223,000 households would take advantage of the scheme in year one. On day one, 42,000 people visited the website for information.

Will the Minister estimate what proportion of households taking up the green deal are likely to lose more than they save owing to high interest rates, hidden charges and penalty payments?

The golden rule in the green deal should mean that the vast majority of people, on a like-for-like basis, will be better off, even after financing is taken into account. It is about time that Labour stopped running down the green deal; stopped running down all the small and medium-sized enterprises and small businesses investing in this new opportunity; stopped running down all the people training up and getting skills for this new opportunity; and started talking up the British economy, rather than scoring cheap political points.

It is because my Labour colleagues want the green deal to work that we are trying to hold the Government to account over the practicalities of a scheme that we have been talking about for the past two years.

The Government predicted that the green deal would create 100,000 jobs by 2016, but the Insulation Industry Forum estimates that since its soft launch in October more than 83,000 insulation projects have been cancelled or put on hold and that 4,200 people have lost their jobs in the sector. What has gone wrong?

We are at the dawn of a far more exciting and expansive long-term project. We are talking not only about lagging lofts, but about the whole-house retrofit of millions of homes, and our impact assessment shows that we will create tens of thousands of jobs by 2015. Perhaps the hon. Lady would stop scaremongering about interest rates and start getting behind all the consumers and small businesses that will benefit from the green deal.

Onshore Wind Farms

9. What steps he is taking to enable local communities to express opposition to onshore wind farms in their area. (140460)

It is important that communities have a real opportunity to have a say over development in their area, which is why this Government’s planning reforms put local communities in the driving seat. Our recent call for evidence looked at how communities can be better engaged with, and receive greater benefit from, hosting onshore wind in their area, and there will be a report in the summer.

Powys council is a small, rural, hard-pressed local planning authority that is currently having to divert £2.8 million from public services to defend refusals of wind farms at public inquiry, and the local community is also raising £150,000 for the same purpose, while developers have access to unlimited funds demanded from consumers. Will my right hon. Friend tell us how this can possibly be fair?

I am grateful for my hon. Friend’s question. He will understand that planning issues and support for local communities and local authorities are matters for my right hon. Friend the Secretary of State for Communities and Local Government, and in my hon. Friend’s constituency for people in the Welsh Assembly Government, no doubt, but he makes a fair point. One reason why we have made the call for evidence on how local communities can benefit is to ensure that developers come forward and engage with local communities far better and in a less adversarial way than we have seen in some cases.

Community groups in my part of Edinburgh, with which I am working, have been trying to set up an onshore wind turbine in the area. They have raised funds for a serious proposal, but have been bogged down by all sorts of bureaucratic nightmares, which in this case relate to Scottish Water and the Scottish Government. There are issues across the UK with communities that want to set up wind farms and renewable energy schemes but are not being allowed to do so. When the Minister looks at how to deal with those who oppose wind farms, will he also look at how we can support those who want community-owned wind farms to be set up in parts of the UK where they are popular?

The hon. Gentleman is absolutely right: there are a number of communities that want to host wind farms, in places where it is appropriate to site wind farms. The Government’s whole approach is to try to work with local communities, to empower them and, with our latest call for evidence, to reach out to communities that do not want wind farms and ensure that they have more of a voice, and to enable those that do want them to proceed. That seems the right and fair way forward.

I do not know whether the Secretary of State has had the opportunity to read The Sun newspaper this morning, but he may have missed the article about a 115-foot wind turbine in Bradworthy in Devon that was blown over by the wind. I wonder whether he can reassure my constituents in Sherwood, where one of these turbines will be built near a footpath or bridleway, that they will be safe. Can he look into this?

I am afraid to tell my hon. Friend that I have not read The Sun today, although I have heard reports of the incident that he talks about. Clearly people who develop, run and maintain wind farms, as with any sort of industrial installation, have to ensure that they are fit for purpose and are not a danger to the public, otherwise the various authorities will come down hard on them and they will find themselves liable.

15. Can the Minister reassure companies such as Siemens that under the contract for difference programme they will receive an appropriate strike price for the electricity they produce? (140468)

I am interested in the hon. Gentleman’s question. As I understand it, Siemens tends to be a manufacturer of turbines as opposed to a developer or a generator. It is the generators that will receive contracts for difference. If Siemens is involved in a consortium and is generating, it will receive the CFDs that will have their prices set administratively following the current consultation by National Grid—a point that will also be relevant if it is involved in and wins an auction post 2017.

Earlier this month Selby district council’s planning committee voted unanimously to reject a seven-turbine wind farm at Bishopwood near Selby. In his response to the Department’s call for evidence on wind energy, will the Secretary of State be backing localism or will he impose these unwanted schemes on local communities even when they have rejected them?

The hon. Gentleman should realise that the call for evidence is focused on how local communities benefit. It is not about reforming the planning system, which is obviously the responsibility of my right hon. Friend the Secretary of State for Communities and Local Government, although the overall thrust of our policies in this coalition Government is to empower local communities, because we have a strong localist agenda.

Energy Efficiency

The green deal, which went live on Monday 28 January, will help to transform the homes of British consumers over the coming decade and beyond. This transformational policy, alongside the ECO and smart meter roll-out, will drive the development of a new energy efficiency market, providing unprecedented choice, benefits and access to low-cost finance for British consumers.

Cold weather payments were triggered recently, as deep snow covered Blaenau Gwent, yet in recent months 181 insulation workers have been made redundant in Wales. Instead of the hyperbole, has not the Government’s introduction of the green deal and ECO sadly been woeful?

Once again, I hope that the hon. Gentleman will see that the insulation industry has a huge opportunity to move beyond just installing measures such as loft insulation to whole-house retrofits. Of course the industry is in a period of transition, but unless we take this bold step and create a much larger market, we will never tackle fuel poverty and turn around the juggernaut of increasing fuel poverty figures that we inherited from the last Government.

Onshore Wind Farms

13. What recent assessment he has made of the financial return of the subsidy for onshore wind farm providers. (140464)

Following a comprehensive review of renewable obligation subsidies, the Government announced on 25 July last year that the level of support for onshore wind developments would be reduced by 10% to 0.9 renewable obligation certificates per megawatt hour with effect from 1 April 2013. This represents a 9.6% rate of return on investment.

My constituents in Uppertown feel that, without their taxpayer subsidy to the onshore wind farms that they do not want, these wind farms would not be blighting their landscape. What steps is the Secretary of State taking to review the taxpayer subsidy and the value for money that the taxpayer is getting for onshore wind farms?

First, let us be clear. Although, as the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) said earlier, taxpayers are often consumers, the subsidies are paid for by consumers when and only when a wind farm produces electricity. There is good value for money for consumers, so I think onshore wind and offshore wind play a really important part in our energy mix. As the hon. Lady knows and as I said in my initial answer, we have reviewed the subsidies going to onshore wind and to all other renewables. In addition, because concerns were expressed around the House, we issued a call for evidence to check that the figures we used in our most recent analysis are up to date, particularly with respect to onshore wind. We will report back to the House on that call for evidence to see whether there have been changes to the cost structure that we did not find in our previous analysis.

Nuclear Power Stations

14. What recent assessment he has made of the potential construction of new nuclear power stations. (140465)

The Government are firmly committed to ensure the conditions are right for investment in new nuclear power, and welcome plans for around 16 GW of new nuclear power in the UK. It is up to energy companies to construct, operate and decommission nuclear power stations. It will be for Government and the independent regulators to ensure safety and security and to maximise the benefit. The future is bright and safe: the future is nuclear.

Professor Tom Burke, a former Government adviser, said on Tuesday that the Government are planning in secret to spend up to £30 billion in subsidy to new nuclear. New nuclear is in trouble in Finland and in France—years late and billions over budget. Are the Government going to break their promise to have no nuclear subsidies, and if they are going to break that promise, can the Minister guarantee that there will be full transparency and opportunities for Parliament to discuss, debate and vote against it?

I have no secrets from this House. Of course the Government are going to be transparent about the process. Of course the Government are going to ensure taxpayer value for money. The hon. Gentleman has a history of being against Trident, which is about our future. He has a history of being against the monarchy, which is also about our future. We knew that he wanted to ban the bomb and ban the monarchy; we now know that he wants to ban the future.

Yesterday’s decision of Cumbria county council not to take forward work to explore the suitability of the local area for a deep geological facility for nuclear waste seems to me to be a pretty serious blow, especially to Sellafield’s own aspirations to be a global centre of nuclear expertise. What steps does the Minister plan to take to take forward that critical work, which has to be an integral part of a nuclear renaissance? Will he look at alternative technologies such as GE Hitachi’s PRISM—power reactor innovative small module—technology?

Of course disposal matters, but let me be clear: our plans for nuclear to be part of an energy mix are firm, resolute and will not be spoiled by anything that has been described. These are important matters, but the certainty and clarity that I described earlier are uninterrupted by these events.

Cumbria county council’s decision would have been described by John Ruskin as a “pathetic fallacy”. Will the Minister undertake to recognise the democratic mandate given by the people to the councils in west Cumbria to embark on a process of managing the country’s radioactive waste as a matter of urgency? Will he agree to meet me, and representatives of the trade unions, in order to establish a new process so that we can take action in the national interest?

I was looking at that Ruskin quotation last night, as it happens, and wondering whether I could weave it in.

The hon. Gentleman has been notable for his support for nuclear power, because he understands its significance to the energy mix. He is right: there are very different views in Cumbria, and we should not characterise them in a casual fashion. Of course we will continue to work with local communities who understand the importance of long-term disposal in the same way as the hon. Gentleman and many of his friends in Cumbria.

If the Minister were concerned about transparency, he would have voted for our amendments to the Energy Bill earlier this week, which would have increased transparency and given comfort to my hon. Friend the Member for Newport West (Paul Flynn) and many others.

As for yesterday’s decision in Cumbria, the Minister has rightly noted that west Cumbrian authorities voted to support the study, although the county council did not. The Secretary of State said that he would embark on a new drive to make the case for waste disposal to other communities. This morning the president of his party, the hon. Member for Westmorland and Lonsdale (Tim Farron)—who is not in the Chamber—was quoted in the Financial Times as saying that Oxfordshire was more suitable. Is that the policy of the party that is the Minister’s coalition partner, and, if so, has it been discussed with the Prime Minister?

We will have discussions with the communities who understand the significance of this and its potential value to them, and of course those discussions will be ongoing.

Let me be clear about transparency. In the Bill Committee to which he referred, the hon. Gentleman has repeatedly made the case for a more transparent approach, and I am sympathetic to that argument. This Government must be characterised by openness in the way in which they conduct their affairs, in this matter and in all matters.

EDF (Strike Price Negotiations)

Order. I am grateful to the Minister, but we are actually discussing strike price negotiations with EDF, which is a somewhat different matter.

I was racing ahead of myself for a moment, Mr. Speaker.

Discussions are ongoing, with the aim of finding a fair, affordable, value-for-money deal. No commitment has been made on commercial terms or the strike price.

Another interpretation of those ongoing discussions is that they are offering a consumer subsidy to the French state nationalised energy company Électricité de France in a mature market, without much competition, and in advance of the relevant legislation. Should that not be subject to proper parliamentary scrutiny?

As I have already said, the strike price that we agree and the process that leads up to that agreement will indeed be subject to such scrutiny, because we will be transparent about the arrangements that we make. Let me be perfectly candid. If this deal does not stack up, we will not proceed with it. It must be in the interests of taxpayers and it must be fair, although of course it must be commercially attractive as well. The negotiations are going ahead, and it would be inappropriate for me to say more about them, but I will say that this can be a win-win for our future.

The Minister is right to say that the deal must be in our interests, but that cannot be known until after the fact of the agreement on the strike price. The key problem with the strike price is a perverse incentive to overestimate the construction costs on which it will be based. If it is subsequently found that those costs are lower than the estimate, the consumer will be paying more for the strike price that the Department has agreed. Why did the Minister and his colleagues on the Government Benches vote against our amendments to the Energy Bill, which would have made transparency essential to the entire process?

Because we have said that we will publish an investment contract concerning details of the strike price. The hon. Gentleman, who is an experienced Member of Parliament, knows that the process of negotiation itself is bound to deal with commercial matters that are sensitive, and is bound to deal with trade secrets which, as he acknowledged in the Bill Committee, cannot be published. He also knows that it might be subject to all kinds of other matters that it would be inappropriate to debate now. However, we are clear about this: we will be transparent, and we will be straightforward.

Order. These are very important matters, but there are other important matters that we need to reach.


19. Whether his assessment of fracking in the US included any information on (a) people poisoned by water contamination and (b) buildings damaged by earth tremors as a result of fracking. (140472)

Now for shale gas, Mr Speaker. Shale gas has exciting potential, but we need to move forward with the right measures to ensure safe and secure operations, and reassure local communities. As for the US experience, so far as we know there has been no confirmed instance of any person being poisoned by water contamination or of buildings being damaged by earth tremors as a result of fracking.

I am grateful to the Minister for that clear answer. I know that he will not want to be critical of his predecessors in the Department, but why has it taken 18 months to discover such a simple fact, which, if promulgated earlier, would have set at rest the minds of people in the areas where frack drilling is likely to take place?

As my right hon. Friend knows, the Secretary of State has made it clear that he has put in place conditions, regulations, and secure and safe circumstances that will allow the continued exploration for shale gas. Shale gas is a potential virtue, but it has to be pursued in a way that is safe and secure, and guarantees public support.

Will the Minister take heed of the words of his predecessor, the hon. Member for Wealden (Charles Hendry), who warned against “betting the farm” on shale gas? Will the Minister assure me that the Government’s perspective on this issue is not influenced by the over-inflated claims made by firms that are major donors to, and have close links with, the Tory party? Such firms include the one that put in the recent planning application for exploratory drilling in Somerset and has given £500,000 to the Tories.

There will be a proper planning process subject to all the normal scrutiny and discipline. Of course we must move ahead with caution, but to ignore this opportunity and cast aside this potential would be folly.

21. The British Geological Survey suggests that there could be 10 trillion cubic feet of gas under the Bowland field, whereas Cuadrilla suggests that there may be as much as 200 trillion. Would not the best way to determine who is right, so that we find out just what impact this vital resource could have and to ensure that we can get players into the marketplace, be for the Department to release the information it has and forge ahead on the next licensing round? That would allow us to get players into the marketplace and just do it. (140475)

Consistency is the watchword that characterises all the work that my hon. Friend does in this place, for in the Select Committee he made just that point and urged the Government to move ahead with another licensing round as soon as possible. We need to test and we need to establish the scale of this potential. Without exploration we cannot do that—he is absolutely right.

Energy Bills

As I said to hon. Members who asked a similar question, we have a range of measures to help people with their energy bills, be they the warm home discount or collective switching, and we think they are having a big impact.

My constituents are facing cuts to jobs, cuts to tax credits and cuts to wages at the same time as food bills, VAT and energy bills are soaring. Will the Secretary of State explain why the Chancellor says that the Government will do everything they can to keep down energy bills but research by the Association for the Conservation of Energy shows that help for the people most in need has actually fallen?

The hon. Lady missed out of her list the fact that we have taken 2 million of the lowest paid out of income tax altogether, delivering a tax cut to more than 25 million people; the fact that we have helped pensioners by a record amount; and the fact that last year people on benefits had a 5.2% increase. She ought to add those to her list.

On help with energy bills, I have always said to the House that there is no way that I, or any Minister or any Government, can have an impact on the effect of world energy prices. People around the world are suffering from the high and increasing world gas and oil prices, and we have to do everything we can, in the short, medium and long terms, to help consumers, to help our people and to help our economies. We are doing that.

Topical Questions

The core purpose of the Department of Energy and Climate Change is to power the country and protect the planet, avoiding catastrophic climate change while providing secure and affordable energy supplies to the UK. Since the last DECC questions, the Energy Bill received its Second Reading, and it is now in Committee. We have launched the green deal to help all households save energy and to lower bills and we continue to work towards a legally binding global international treaty, engaging with our partners to formulate a road map through to 2015.

I thank the Secretary of State for that answer. Congleton sustainability group, part of Congleton partnership, has developed plans for a local micro-hydro scheme to generate electricity from the old mill weir. It has received an offer of £250,000 from the rural carbon challenge fund, which is a substantial proportion of the funding needed, but further help is needed to translate this innovative scheme into a reality. Will the Minister meet me and a delegation from my constituency to discuss it?

I am grateful for my hon. Friend’s question; that sounds a very interesting scheme. We are supporting micro-hydro schemes through feed-in tariffs but if she has particular issues that she wants to discuss with me or my colleagues in DECC, I am sure we will find time to meet her and her delegation.

Every day it is becoming more evident where the Liberal Democrats do not agree with their Conservative colleagues. However, in response to Labour’s proposal to extend community energy schemes by increasing the feed-in tariff threshold to 10 MW, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), told the Energy Bill Committee that

“it is a matter of public record that I myself supported the expansion of the FITs scheme at the Conservative party conference last year…However, this is a coalition Government”.––[Official Report, Energy Public Bill Committee, 22 January 2013; c. 248-49.]

Will the Secretary of State confirm today that it is the Liberal Democrats who are responsible for the Government’s failure to support extending the feed-in tariff threshold to 10 MW in the Energy Bill and therefore to support and encourage community energy schemes?

I congratulate the right hon. Lady on a good try, but I am afraid it is going to fail. I work closely with both my Ministers of State and we are a united team on that and many other measures. I am sure the right hon. Lady will be terribly disappointed, but that is why we will introduce later this year the most ambitious community energy strategy this country has ever seen, and we will consult on it before we finalise it. She wants to point out one measure, but that will be considered along with many others. We have a rather more ambitious approach to community energy than the previous Government ever had.

T4. The Energy Minister has appeared before the Energy Bill Committee, waxing lyrical about the important reforms the Government are introducing to ensure that we get the energy investment we need in the future. What steps is he taking to ensure that those measures will see appropriate diversity of generating technologies? (140479)

Diversity matters because it provides resilience and sustainability. It is absolutely right that, through the mechanisms we put in place and the framework of certainty I described earlier, we guarantee an energy mix that is fit for purpose and fit for the future.

T5. In 1976, the Flowers commission said that it would be irresponsible to proceed with generating electricity from nuclear power without a policy on the disposal of waste. The policy then was to dig a hole and bury the waste in it. The policy now is to do the same thing, but we no longer have a hole since Cumbria county council turned down the planning permission yesterday. Will this preposterous buffoon of a Minister of State try to answer one question and say whether it is still irresponsible to proceed without a solution to deal with the waste? (140481)

Order. I think the hon. Gentleman should withdraw the expression “preposterous buffoon”—[Interruption.] Order. The hon. Gentleman has a very wide vocabulary and should use an alternative expression.

I will pull those words and refer instead to this Minister who has failed to answer any question today and has demonstrated his incompetence.

I am extremely disappointed in the approach that the hon. Gentleman has taken. My hon. Friend the Minister of State and I work very closely on this issue and many other matters and he has made an important contribution to the debate. The hon. Gentleman clearly has not read the written ministerial statement issued before oral questions, which makes it very clear that our policy continues and has not changed. As his hon. Friend the Member for Copeland (Mr Reed) said earlier, it is worth noting that Copeland borough council and Allerdale borough council voted with substantial majorities to say yes to a nuclear waste facility in their area.

Order. We have a lot to get through and we need short sharp questions and answers. I look to Roger Williams for a rapier thrust.

T6. Anaerobic digestion is sometimes seen as a Cinderella technology in our fight against climate change, although I am sure that that is not the case in the Department. A report by the Royal Agricultural Society of England sets out some of the benefits of on-farm AD, such as a reduction in greenhouse gases and pollution, but also a number of barriers to it. Will a Minister meet interested parties to discuss how those barriers can be overcome? (140482)

I am certainly happy to meet interested parties because AD is a priority for the Government. Since we published our AD strategy in 2011, I am glad to say that the deployment of AD plants has increased by a third. We remain ambitious, and I will happily meet my hon. Friend.

In Stoke-on-Trent, we have a disproportionate number of people in fuel poverty and a high reliance on intensive energy use, on which a great number of jobs depend. Will the Secretary of State give an assurance that the city deal bid that is being made by Stoke-on-Trent and the local enterprise partnership for investment based on energy will be the subject of an urgent ministerial meeting to ensure that the proposals are not stalled?

I am grateful for the hon. Lady’s question. Officials are working closely on the bid, although obviously I cannot prejudge the decision.

T7. As a fellow Member representing an area in the green and pleasant county that is Lincolnshire, the Minister of State, Department of Energy and Climate Change, my hon. Friend the hon. Member for South Holland and The Deepings (Mr Hayes), will be aware that Lincolnshire county council is deeply troubled by the local impact of onshore wind deployment. Does my hon. Friend share that concern? (140483)

I have with me Lincolnshire county council’s statement on exactly that matter. My councillors in Lincolnshire, as wise as they are worthy, and as diligent as they are dedicated, are determined to defend the landscape, and so am I.

You might recall, Mr Speaker, that in July last year, I raised on the Floor of the House my concern about the Department’s delay in deciding whether to retain the electric lines at the Heath business and technical park in Runcorn. This is important because the delay in the decision is holding up the creation of many hundreds of new jobs and of new housing. We are now told the decision might not be taken until March, because the inspector is busy. Does the Minister think that that is acceptable?

It seems to me that the hon. Gentleman’s very specific point is well made. I shall be delighted to meet him to discuss those details and see what we can do to help.

T8. With the development of new sources of many types of generation in many locations on and offshore, what measures is my right hon. Friend the Secretary of State taking to speed up the strengthening of the grid, which is essential for the efficient transmission of electricity? (140484)

My hon. Friend will know that Ofgem recently announced the settlement for national grid investment going forward, and the offshore transmission network regime has been strengthened. All these things are very important for the reasons that he outlined.

Further to the earlier exchange about nuclear waste, the Secretary of State will be aware that the Ministry of Defence was talking to the Nuclear Decommissioning Authority about taking the MOD’s waste, especially that from the submarines stored in my constituency. Will he confirm what fresh discussions he will ask the NDA to hold with the MOD to resolve the situation?

Let me reassure the hon. Gentleman and all hon. Members that yesterday’s vote by Cumbria county council in no way changes the extremely safe and secure way in which nuclear waste is stored, whether it comes from the Ministry of Defence through nuclear submarines, through power generation, or from our very large nuclear legacy. We are determined to ensure that that nuclear waste is stored safely for decades to come, if necessary in interim storage facilities, but we will be pressing on with our policies for a long-term geological storage facility.

Tilbury power station in my constituency has been generating power for more than 60 years. It successfully transferred from coal-fired generation to biomass to the extent that it generates more than half the UK’s supply of renewable energy. However, owing to the large combustion plant directive, it will still have to close. Is not that stark raving bonkers?

I am aware of that situation, and I know how well my hon. Friend has articulated and represented the interests of her constituents in this regard. This is, in the end, a commercial decision. RWE took the decision to use Tilbury as a test bed in October 2011 and converted the station to run on 100% biomass. Particular circumstances have affected that decision, but I will be more than happy, as I already have begun to, to discuss the matter further with my hon. Friend.

In his response to my question earlier, the Minister of State was gracious enough to say that he wanted complete openness about the strike price. Will he therefore tell the House whether there will be a provision in the strike price negotiations for a claw-back, should the estimated construction costs exceed the real ones?

The hon. Gentleman is being mischievous. I have been very clear that those matters will be published for the scrutiny of the House, but he would hardly expect me to go into the detail of the negotiation while the negotiation was ongoing.

The prospect of managing a contract for difference is no trivial matter for the small organisations often involved in community energy initiatives. Will my right hon. Friend consider pleas from those on the Liberal Benches to continue the now familiar feed-in tariff for small-scale prospective community energy generators?

My hon. Friend knows that we have been looking at the issue and we will continue to keep it under consideration, but it has to be seen in the wider context of the community energy strategy that we are developing.

I have seen many Ministers in the House and I think the Minister of State, the hon. Member for South Holland and The Deepings (Mr Hayes), is one of the better ones I have heard.

May I push the ministerial team on the question of smart metering? As I understand it from the reply to an earlier question, smart metering is now going to be optional. It will not be installed in every house in the country, which would have been transformational. It has been downgraded to optional and will not be applicable across the board.

Our proposal for the smart meter roll-out is very similar to that of the previous Government. We have a very ambitious roll-out. There is no desire for people not to take smart meters, but we have said, as the previous Government said, that if someone really does not want a smart meter, we will not force them to have one.