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Oral Answers to Questions

Volume 568: debated on Thursday 17 October 2013

Energy and Climate Change

The Secretary of State was asked—

Energy Bills

With your permission, Mr Speaker, I would like to group this question with several others.

I am taking many steps to help, which come under three broad categories—

Order. I think the Secretary of State is seeking to group this question with Questions 6 and 18. I understand the concept of the broad brush, but it can be taken a bit far. We need greater specificity.

As always, I am very grateful for your advice, Mr Speaker, as I am sure the House is, too.

I will start again. I am taking many steps to help households with their energy bills. Those steps come under three broad categories: first, direct help for millions of people, with money off their bills and money to help to pay their bills, through the warm home discount, winter fuel payments and cold weather payments; secondly, energy efficiency, to help people to cut their bills by wasting less energy, through the energy company obligation, the green deal and smart meters; and thirdly, competition. I am intervening to make electricity and gas markets in the UK ever more competitive, so that energy companies cannot exploit people through market power.

Of course I am disappointed by energy companies that are putting up their prices. The key thing is competition, and we in this Government have pushed competition hard. The big six were the creation of the last Government, when we saw the number of companies reduced. Under this Government, competition is increasing. I would urge people who are disappointed by increases from their energy company to shop around and switch, because there are some very good deals out there.

Last week the Prime Minister said that Labour had definitely “struck a chord” on energy prices and that

“There’s a certain amount you can do freezing prices,”

so will the Minister freeze prices, which will benefit more than 47,000 households in my constituency?

The hon. Lady was obviously not at Prime Minister’s questions yesterday, because the Prime Minister called it a con, and he is right. Labour’s energy price freeze is a con. Let me explain to the Opposition why it is a con, because when people see a politician promising something for nothing, they do not believe them. The policy cannot control prices before Labour’s price freeze and it cannot control prices after it, so energy companies are likely to hike prices before and after. Consumers will be worse off as a result of such a measure.

Energy bills have already risen by £300 and are set to increase by perhaps another £100 this year. In my constituency, more than 36,000 people would benefit if the Government took action to freeze bills this year, which could save up to £120 per household. Why will the Government not stop defending the big six companies and other companies, and get on the side of the consumers and help them out this winter?

We are on the side of the consumer, because we are promoting competition. The hon. Gentleman and his party, through their price freeze, will hurt competition. Let me explain it to him. Whereas we have seen companies entering the market under this Government, a price freeze would hurt small suppliers. If he doubts my word, he should listen to the small suppliers themselves. Nigel Cornwall, of the Energy Suppliers Forum, says that Labour’s policy

“ignores real progress made in increasing competition in the market over recent years”.

Small suppliers do not like Labour’s policy because they know it would hurt consumers.

Does my right hon. Friend agree that nobody suffers more than consumers in rural areas that are off grid? The ECO system was supposed to ensure that 15% of the funding went to upgrade hard-to-reach homes in rural areas, but the evidence on the ground is that the big six are unwilling to assist with supplying new oil-fired liquefied petroleum gas boilers. Given that energy bills are more than 50% higher in off-grid areas, will he raise the issue with the energy companies and ensure that all households can receive help?

My hon. Friend raises an interesting question. Almost all aspects of the energy company obligation are working well, but the rural sub-obligation—the bit he is referring to—is not working so well, and we are looking at how it can be improved.

The Opposition want to have their cake and eat it. They say they want to decarbonise the energy market, yet they also say they do not want people to pay for it. Can my right hon. Friend bring some reality and honesty to the argument and tell us how we decarbonise the economy while at the same time trying to keep costs to consumers to a minimum?

My hon. Friend is absolutely right. The Energy Bill and electricity market reform do just that. He may be interested to know that we have today asked the Leader of the Opposition 10 questions about Labour’s policy. If we look at it, we not only find that it is a con that will reduce competition and hurt the small suppliers, but that it will hurt investment, too, which is needed to keep energy security and to decarbonise. Labour’s policy is economically illiterate.

SSE’s 8.2% average price increase—we should remember that some people have to pay more than that—is unacceptable when the company is boasting on its website about the large dividends it pays out to its shareholders every year. I see competition as the answer. Will my right hon. Friend tell my constituents what concrete steps are being taken to improve competition and when they will be able to have a much wider choice than they have at the moment?

My hon. Friend is absolutely right. When big energy companies make these high price rises, I would urge all their customers to look at the competition available. There is a lot of choice out there. In fact, there is far more choice than there has been for a long time—possibly ever. The last Government killed choice and reduced competition; under this Government, we have seen a big increase.

Let me tell the Secretary of State that if Labour is elected, our price freeze will happen, and if companies collude to increase prices beforehand, we will take action. The right hon. Gentleman is the one in government, so if companies try to hike up their prices beyond anything that can be justified before 2015, will he stop them—yes or no?

We will help customers to get the best deals. The right hon. Lady knows that. She knows that on the current market, customers can get much better deals than those offered by the big six. She knows that the number of small suppliers has increased. She knows that in 2011 there were no independent suppliers with more than 50,000 customers. Thanks to our policies, there are now three with more than 100,000 and a further seven companies have entered the market in the last two years. That is the choice; that is the solution: people can cut their bills significantly by changing supplier.

There you have it, Mr Speaker: every single time, this Government put the energy companies before consumers. According to figures from the House of Commons Library, energy prices are rising three times faster under this Government than under the last Labour Government. Our price freeze will save money for 27 million households and 2.4 million businesses while we reset the market. It is the right hon. Gentleman’s policy that is a con; he says everyone will be put on the cheapest tariff, but is it not a fact that 90% of people will see no benefit from his policy at all?

Millions are seeing benefits from our policy of competition. The right hon. Lady has made a very interesting point today. In response to our charge that Labour’s policy is a con, because energy companies could push up bills beforehand and after, she said that Labour would take action if they do. Does that mean that she is going to introduce full price regulation? Is Labour now promising that, because that is the implication of what she said?

Energy Efficiency

For the first time ever, the UK now has a national energy efficiency strategy. This is something no Government have put in place before. Helping to cut energy bills is at the heart of this drive through the green deal, energy company obligation, electricity market reform, smart meter roll-out and support for innovation, research and development. They all demonstrate the Government’s determination to drive unprecedented investment into energy efficiency.

I think that just 25 people have benefited from the green deal in my constituency so far, but thousands of people across Stockton-on-Tees could have warmer homes thanks to a tremendous project to externally clad their homes run by the borough council and deliverer partner, Go Warm. This has attracted £20 million of investment and 300 jobs. Sadly, a legal judgment means that BT is the only company that can remove the eyelets that support the wires in the houses that are benefiting from the scheme. This is slowing the programme down because of insufficient resources to do the work in a reasonable time. Will the Minister please intervene, tell BT to get its act together, get the work done more quickly and give my constituents the warmth they deserve?

The hon. Gentleman raises a legitimate point about BT. I will certainly look at this in more detail and would be happy to meet him to discuss it. We want to press ahead. We have an ambitious efficiency programme, which is led by the energy company obligation. We believe that through a combination of the ECO and the green deal, nearly 250,000 people will have seen their homes improve by Christmas.

Fuel poverty is increasing, but the amount of money spent on energy efficiency programmes directed at the fuel poor has decreased by 50% since 2010. Is it not time that the Minister changed his priorities?

The hon. Lady seems to be confusing the record of the coalition with that of the last Government. During the last Parliament, fuel poverty rose in every single year; under the coalition, it has fallen in every year. [Interruption.] The definition has not been changed yet. It will be changed next year, on a cross-party basis.

We still have a great deal to do, but this Government are rolling up their sleeves and making a difference, unlike the last Government. They had the chance to deal with fuel poverty, but it rose in every single year of the last Parliament.

The Government forecast that the green deal and the energy company obligation would create 60,000 jobs, but earlier this year the Insulation Industry Forum confirmed that more than 4,000 jobs had been lost during the transition to the ECO. Just the other week, Carillion, a leading green deal provider, was forced to announce a restructuring that is expected to lead to further job losses in the green deal sector. That is a disaster for the workers who are affected, for their families, and for our low-carbon industry. Can the Minister confirm the number of people who have lost their jobs since the scheme was launched, and can he explain why this is happening?

We are certainly seeing a change in the industry, and we expect to see a structural change. New companies are now entering the market. The growth that we are seeing is not in the big energy companies created by the last Labour Government, but in the small and medium-sized enterprises, the independents and entrepreneurs who are being championed by the coalition. The ECO is helping more than 215,000 households, and we expect it—in combination with other measures—to enable nearly a quarter of a million homes to benefit from insulation, and from a range of new products that were not available before, by the end of the year.

Does my right hon. Friend agree that fuel poverty would be worsened if the cost of the capital required for the billions of pounds of new investment rose because of heightened political risk associated with the United Kingdom? Indeed, is that not exactly what the Leader of the Opposition has achieved? Surely his comments will make fuel poverty worse.

My hon. Friend, who has huge experience in these matters, is absolutely right. Labour’s policy would scorch investment. According to an analysis by Cornwall Energy, which leads the monthly forum for independent energy companies, Labour’s policy is “wrong”, and

“based on imperfect information, flawed assumptions and emotion, which will cost the consumer dearly. There are at least five significant problems with it.”

Labour’s policy would indeed have an impact on the cost of capital and on investment, and consumers—particularly vulnerable consumers—would be left to pick up the pieces.

A report by Anna Walker did a huge amount to improve energy and water efficiency. What are the Government doing to educate people, and to advise them not to heat water beyond what they use and to become more energy and water-efficient?

Any green deal assessment will feature a number of recommendations. We have found that people are very pleased with their assessments. More than 80,000 people have had a green deal survey, and 81% said that as a result of a survey they had taken action, would be taking action or were currently taking action, while 72% said that they were recommending the green deal to their friends. It is still early days, but the green deal, with its range of measures from handy tips to big structural changes in homes, is the way forward.

I have been contacted by a pensioner constituent whose annual heating bill is £700. He lives in a terraced house in the middle of Kettering with a solid wall that requires external insulation and rendering. He has been in touch with 17 local companies, and has been told that he must pay between £4,000 and £15,000 to get the work done and that the green deal is not available to help with that type of work. Can the Minister please advise?

That is very puzzling, because the ECO, which is designed to complement the green deal, has exactly that sort of consumer in mind. I should be happy to meet my hon. Friend to discuss his constituent and see how we can help.

During the passage of the Energy Bill I raised with the Minister the way that the Government’s policy on simplifying tariffs is resulting in some customers paying more. Ofgem’s recommendation of the reintroduction of standing charges is resulting in some customers who are energy-efficient, increasing, rather than lowering, their bills. That cannot be right. Why cannot the Government look into it?

I am sorry, but I did not catch all of the hon. Gentleman’s question. He raises a serious point, however, and I will be very happy to talk to him in more detail about our tariff plans. This is a Government who are taking real action to simplify tariffs, to get on the side of the consumer and to deliver better value for money after years of inactivity and inaction under the last Labour Government.

Because this Government will not stand up to the energy companies, Ministers in other Departments are clearly eyeing up the ECO scheme that funds energy-saving measures as a short-term, although counter-productive, way to reduce bills, but is not the poor running of the ECO scheme by Ministers what has made it so vulnerable? It is too bureaucratic, it is not geographically focused and it does not prioritise the genuinely fuel-poor. What is the Minister going to do to sort it out?

First, may I welcome the hon. Gentleman to his post? I am not sure whether he is the 10th or 11th member of the Labour party I have had opposite me on the Labour Front-Bench, but I hope he has a long stay on the Opposition Front-Bench—a very long stay indeed.

The hon. Gentleman’s criticisms of the ECO are misplaced. I am not saying it is perfect, and as we go forward we will always look to improve the scheme, but, as I said earlier, we anticipate that between 215,000 and 230,000 homes will be helped by the ECO by Christmas this year—that is nearly a quarter of a million families benefiting from warmer homes and cheaper bills. I will be very happy to organise a briefing for the hon. Gentleman, so next time he can, perhaps, come to questions a little better prepped.

Nuclear Power

The Government are committed to securing the right conditions for investment in new nuclear power in the UK. This is the first nuclear programme in a generation and it is progressing well, with projects to build new power plants moving forward with EDF, Horizon Nuclear Power and NuGen. Between them, those projects involve plans to develop at least 12 new reactors on five different sites.

My constituents are extremely concerned about future energy prices and continuity of supply. With one fifth of UK generating capacity due to come offline within the next decade, does the Minister agree that we need to bring forward this new nuclear capacity as a matter of extreme urgency?

Yes, I do. We are living with the legacy of 13 wasted years in which absolutely nothing was done to replace our ageing nuclear stations. Under this coalition Government plans are now progressing, as I said, and we have every prospect of 12 new reactors on five separate sites.

The Minister will know that I am not a convert to nuclear power, but I accept that the coalition Government have done a deal that says there will be no nuclear power that has public subsidy—so public subsidy will not be provided. How is the Government’s position reconcilable with an application for derogation from the EU rules on state aid?

My right hon. Friend the Secretary of State’s predecessor set out to this House the circumstances in which support would be offered for the new nuclear technology we are negotiating on with EDF in respect of Hinkley C. When we conclude those negotiations—which I hope we will do very shortly—we will, of course, report the details of the investment contract to the House. I also note that the party of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) is now a supporter of nuclear power.

The Minister may be aware that when Hinkley Point C comes onstream it will produce as much electricity in a year as every single onshore and offshore wind turbine we currently have. Given that, will he assure the House that there will not be a further 10-year delay in respect of future nuclear stations?

Nuclear power is a very important part of our energy mix and of our future energy security, which makes it all the more criminal that nothing was done for the long, long period of the Labour Government to replace the nuclear stations that are coming offline in the late 2020s and 2030s.

UK Energy Market

I keep the competitiveness of the UK energy market under constant review and have acted to make it more competitive. In retail markets, where companies are supplying customers, we have acted by deregulating to increase the number of suppliers and by reforming bills and tariffs. In wholesale markets, where companies are selling power they are generating to suppliers, Ofgem measures and measures in the Energy Bill will boost competition and market access for independent generators across the UK.

Npower told my constituent Alan Gowers, a pensioner, that his tariff was ending and his new one would be 50% more expensive. SSE estimated that my spend would go up by 10% and so it tripled my direct debits. I have worked in competition regulation for six years and I can tell the Secretary of State that this is not a competitive market. When a market is not functioning—when it is fuelling a cost of living crisis—do a Government who stand up for people not intervene?

We are intervening, because the market we inherited from the previous Government was not as competitive as it should have been. Before Labour’s previous energy market reforms, there were three generators and 14 suppliers—17 companies—but after those reforms the number went down to six, so Labour reduced competition. Labour is the party of the big six. This coalition Government have acted to make sure that we have competition to take on the big six, so the hon. Lady should speak to her Front Benchers because Labour is the party of non-competitive energy markets—the party of the big six—whereas our coalition Government are taking on the big six.

As part of the competition assessment, the Secretary of State could do worse than visit the workers at Ineos at Grangemouth, who supply the energy needs for the whole of Scotland and, indeed, the north of England, and whose jobs are now under threat from a belligerent employer that has walked away from talks with the trade unions and, more seriously, is now demanding taxpayers’ money in order to invest in the company.

I am grateful for the hon. Gentleman’s question. I hope he will be reassured by the fact that I have spoken personally both to key Unite trade union leaders and to Ineos. We persuaded them to go into ACAS talks. I regret that those talks have broken down, but I urge both parties to resume them and try to resolve this situation without industrial dispute. May I take this opportunity to say that, working with the Scottish Government and industry, we have done everything we can to make sure that if there is a dispute, the fuel will flow through Scotland’s economy?

My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) gave two of the many examples that hon. Members could give of how the retail energy market is not working in the interests of households or businesses. Ensuring that all power trading is on an open exchange and stopping companies selling power to themselves at secret prices, as we are proposing, will reset the market, encourage other entrants and ensure that people know why they are paying what they are paying. Will the Minister confirm the speculation in The Times at the weekend that his Government will shortly perform a welcome U-turn and adopt our proposal to introduce a pool that will bring clarity, fairness and transparency to the UK retail energy market?

No, we will not, because we have got a much better policy. Working with Ofgem and in the Energy Bill, as the hon. Gentleman ought to know now, we are tackling the real problem in the wholesale market—a problem that the previous Labour Government completely failed to deal with. Interestingly, Labour’s new policy reverses the policy that Labour implemented in government —talk about confused; never have an Opposition been so confused in their policies.

Exploratory Drilling (Balcombe, West Sussex)

The licence holder, Cuadrilla, has drilled a well, including a horizontal section, in accordance with the planning permission granted by West Sussex county council, to explore for oil. Apart from the scrutiny by the planning authority, the proposals were subject to scrutiny by the Environment Agency, the Health and Safety Executive and my Department to ensure that the operations are safe and that the environment is protected.

My right hon. Friend will know that Balcombe lies in the constituency of my right hon. Friend the Member for Horsham (Mr Maude), who, as a Cabinet Minister, is unable to ask parliamentary questions. Will the Secretary of State confirm that the exploratory drilling at Balcombe was, as he said, subject to the most rigorous monitoring and regulation, that further detailed regulatory approvals would be needed before fracking could take place and that the recovery of these valuable energy resources will not override the need for local residents’ understandable concerns to be heard and registered?

My right hon. Friend will know that I have spoken to our right hon. Friend about that. We have also ensured that the regulatory regime applying not just to west Sussex but across the country is as tough as any regulatory regime anywhere in the world and we keep it under review to ensure that it remains that tough. He might be interested to learn that the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), as Energy Minister, will meet west Sussex MPs next week to discuss the issue.

Renewable Energy

In 2012, under the measure used for the 2009 EU renewable energy directive, renewable sources contributed 4.1% of gross final energy consumption. In terms of renewable electricity, however, the share of overall generation has more than doubled in the last three years, from 6% in the second quarter of 2010, when the Labour party left government, to 15.5% in the second quarter of 2013.

I welcome that answer from my right hon. Friend. Alstom in my constituency supplies component parts for turbines used in tidal lagoons, such as those proposed by Tidal Lagoon Power, a consortium of which Alstom is a member. What is my right hon. Friend doing to support such tidal projects, which generate clean electricity and provide critical base load energy?

My hon. Friend will know that this Government have put much greater emphasis on driving forward the efforts to develop the potential for marine energy around our shoreline. We have created two marine energy parks to do that. Tidal lagoon is a very interesting technology. The project in Swansea is at a pre-planning application stage, so I cannot give a specific answer on that project, but we are interested in working on research and development to drive the technology forward.

I do not know whether the Minister is as early a riser as I am, but on “Farming Today” there was a poor farmer who had been encouraged by a £1 million grant to grow willow and miscanthus. There is no market for it, nor great storage for it, so what kind of policy is that? Will the Minister listen to that programme, even if he has to listen to it on iPlayer, and do something about farmers who are trying to contribute to renewable energy?

A poor farmer with a £1 million grant seems a slight oxymoron, but I am sure that the hon. Gentleman is making a real point. I will happily look into the programme he mentions, but I regularly meet the National Farmers Union, the Country Land and Business Association and a range of stakeholders with an interest in bioenergy. We are making great progress under this Government and picking up the slack left by the last.

Order. The hon. Member for Huddersfield (Mr Sheerman) is wittering away from a sedentary position and meanwhile the right hon. Member for Mid Sussex (Nicholas Soames) is chuntering about the merits of cricket bats. I have not yet had the pleasure of observing the right hon. Gentleman bat, but I feel sure that that delight awaits me in due course.

If The Times is correct that the nuclear industry will receive twice the wholesale price for electricity, what are the implications for renewable energy, and does that mean that we can continue to grow the sector?

The thing about this Government’s energy policy is that we want a range of technologies. Energy security will come from diversity, and we are committed to driving forward the nuclear programme in a way that the previous Labour Government did not, but not to the exclusion or detriment of significant investment in a range of other technologies, including, importantly, renewables and energy efficiency.

What are the Government doing to ensure that the investment in the renewable industry paid for by UK taxpayers and UK energy bill payers results in jobs in the UK, not jobs elsewhere?

That is a very good question. We are doing a great deal more than the previous Government. The London Array, for example, was a fantastic installation, but it is a shame that 80% of it was constructed and contracted abroad. We now have an industrial strategy. We are working in partnership with the industry to establish, mobilise and grow a supply chain here in the UK. Only if we have a really vibrant UK supply chain is the roll-out of renewables at scale genuinely sustainable.

European Energy Markets

The Government strongly support a competitive and better connected energy market across Europe. Increased competition can put downward pressure on energy prices in the long term and help us maintain secure supplies. We are involved in a number of areas to drive competition, including the development of EU-wide market rules, regional infrastructure initiatives and cross-border projects, including more interconnectors.

I thank my right hon. Friend for that expansive answer. Does the Minister agree that, in contrast to Labour’s energy price con, the Government’s focus on more competition through the single market by enhancing the role of energy within that market is right?

I absolutely agree with my hon. Friend, and I could not have put it better. I shall be pursuing these issues later this afternoon in Brussels in the Commission.

Why have the Government failed to include interconnection with Europe as part of the capacity payment arrangements that they recently announced as part of the DECC implementation programme?

We have not ruled that out for the second stage. A number of proposals have been put to us for new interconnectors, and we are looking at each of them.

As a result of weak competition and ineffective regulation, electricity prices in Britain—according to the Department’s own figures—are the sixth highest in the EU15, the third highest in the G7 and almost 20% above the EU15 and G7 average. The Minister will know that energy bills are the second biggest cost that businesses face, and that ever higher prices cost jobs and deter investment. Why will he not support Labour’s policy to stop unfair price rises by freezing energy bills until January 2017, saving the average business some £1,800, and reform the energy market to reintroduce competition and rebuild trust?

I welcome the hon. Lady to her new responsibilities. I think that the prices she quoted were pre-tax rather than post-tax, but the answer is simple—to bear down on prices, we need more competition. The Labour party left us with the big six. It started with 14 retailers; we ended up with the big six. The answer is more competition, easier switching and ensuring that the most vulnerable people are placed on the lowest possible tariff.

Wind Energy

Support for onshore and offshore wind projects is provided under the renewables obligation and, from next year, under contracts for difference. Support rates take account of the costs of each technology, and are intended to be sufficient to support delivery of our renewable energy and carbon reduction targets, while minimising costs to consumers.

I am grateful for that reply. I hope that the Minister agrees with me that Bournemouth is one of the most attractive and popular seaside resorts in Britain. Whatever one’s views, tourism is important to the town and the area, but many of my constituents are concerned about the visual impact of the proposed offshore wind farm in Poole bay. There are many questions such as how many turbines will be built, the exact locations and how high they will be. I would be grateful for a meeting with the Minister to discuss this important matter.

I am very much aware of my hon. Friend’s strong concerns about the proposal. No application has been made, but let me assure him that the visual impact and acceptability of any installation is one of the factors that would be considered by the planning inspectorate and my right hon. Friend the Secretary of State in determining any application of this kind.

I am grateful to my right hon. Friend for his reply on the subject of subsidies, but given that the Secretary of State for Communities and Local Government has said that current planning applications give

“insufficient weight . . . to local environmental considerations like landscape, heritage and local amenity”,—[Official Report, 10 October 2013; Vol. 568, c. 31W]

does he agree that the subsidies provided to developers need to take account of the very real local concerns about how these things are blighting the countryside?

We have reduced the support for onshore wind projects from April this year and the draft strike prices that we have set out are reduced over time up until 2018, but the new planning policy framework makes it clear that local authorities should have policies in place to ensure that any adverse impacts, including visual impacts and cumulative impacts, are addressed satisfactorily. My right hon. Friend the Secretary of State for Communities and Local Government has made it clear that he intends now to call in more applications at appeal to ensure that the new planning practice guidance is meeting the Government’s intentions.

May I advise the Minister that while the incentives are clearly proving sufficient to encourage a number of prominent local Conservatives to apply for wind farms to be built on land in Northumberland, what concerns many of my constituents is whether landscape, which the Minister mentioned, and proximity to residences can be taken properly into account at every stage in the planning process?

Yes. I want to reassure my right hon. Friend. Planning applications in respect of onshore wind should be approved only if the impacts are acceptable to the local community. The new planning guidance from the Department for Communities and Local Government helps to deliver the balance that we expect, ensuring that proper weight is given to the visual impact, the cumulative impact and any heritage implications for particular sites.

Carbon Reduction Targets

The Government are fully committed to meeting the greenhouse gas emissions reduction targets set out in the Climate Change Act 2008, and I am pleased to tell the House that the UK is now 25% below 1990 emissions levels and on track to meet our 2020 34% reduction target.

Many people query why that is important. The recently published Intergovernmental Panel on Climate Change fifth assessment report confirms both the nature and the scale of climate change and human contribution to it. Does my right hon. Friend believe that any Government engaged in evidence-based policy making can afford to ignore these trends? What would be the risks and consequences if we attempted to do so?

This Government are very clear that we will continue to drive forward the decarbonisation of the energy sector and of the wider economy, consistent with meeting our targets in the Climate Change Act, which we are committed to. But we need to make sure that we do that in a way that keeps our industry competitive, does not put a burden on consumers and is consistent with growing prosperity. I think this coalition is absolutely up to that job.

Why, then, did the British Government this week help Germany scupper a very important European agreement on reducing CO2 emissions from the most polluting vehicles?

Order. I think I heard the right hon. Member for Exeter (Mr Bradshaw) make an allegation of dishonesty. I must ask him to withdraw that word. I think he used a three-letter word which implied direct dishonesty.

We cannot continue the debate in that way. Topical questions will continue the exchange, but I must ask the right hon. Gentleman to withdraw that word.

I am most grateful to the right hon. Gentleman. All these matters will be aired further, I am sure.

It is true that emissions are down both from this country and in Europe, but the contribution of Europe and the United Kingdom to atmospheric carbon dioxide is increasing because of imported manufactured goods. What is the Minister going to do about that?

The hon. Gentleman does have a point. Ultimately, we will not defeat dangerous manmade climate change unless there is a global solution. Although we can play our part, the important thing is that we secure a global deal involving all the major economies, particularly China, America and the other fast-growing developing economies, and get everybody on a sustainable economic path. That is why we are putting more and more effort into securing a meaningful, robust global treaty in 2015.

Energy Support (Northumberland)

14. What steps his Department is taking to ensure that residents of Northumberland who are off the grid have sufficient support during cold weather this winter. (900531)

The Government want everybody to be able to access secure and affordable fuel supplies for heating their homes. This year’s “Buy oil early” campaign was launched on 11 September to encourage consumers to stock up early and join oil-buying groups, where cost savings can be found. I will continue to work through the all-party group and the ministerial roundtable on off-gas grid issues to see what further action is required.

I thank the Minister for that answer. Our concern should particularly be for vulnerable residents caught out by sudden spring cold snaps. Does he agree that there is scope for a pilot project in Northumberland in which a consortium of oil-buying clubs, parish councils and credit unions could be funded to assist such residents?

Yes; we very much welcome the development of local initiatives that can help promote a more affordable supply of heating oil to consumers. I look forward to seeing my hon. Friend’s final proposals for a pilot project in Northumberland and will then ask my officials to consider what support might be made available to assist him in taking it forward.

EU Anti-dumping Tariffs

15. What assessment he has made of the potential effects of proposed EU anti-dumping tariffs applicable to solar PV cells manufactured in China; and if he will make a statement. (900533)

Following a robust intervention from the UK, including a delegation of key industry players that I took to Brussels, the European Commission has negotiated an agreement with Chinese exporters that is a significant improvement on the initial EU position. The agreement should mean that we will not undermine the future of the UK solar PV industry or deprive UK consumers of the benefits of cheaper solar panels.

I thank my hon. Friend for that answer. It is good to hear that he stands up not only to the energy companies, but to the European Commission. Does he not agree that if the European Commission had had its way, its tariffs would have not only been inflationary, but damaged the photovoltaic industry, which does so much good in employing people in this country?

How typical of my hon. Friend to align himself with an energy source driven by sunshine. I am grateful to him for pointing this out. The UK’s solar sector now has a strong future, thanks to our reforms. It is affordable for consumers, who pay for the subsidy through their bills, and it is now scalable. We are working with the industry to drive down the costs and make this an attractive proposition for consumers up and down the country.

Fuel Poverty

This year the green deal and the energy company obligation have already transformed the homes of 216,000 low-income and vulnerable households, cutting bills and keeping people warm. Additionally, this winter our warm home discount scheme will pay out to 2 million households, including over 1 million of the poorest pensioners. The Government have also permanently increased cold weather payments to £25 a week, and all pensioners will receive winter fuel payments.

I thank the Minister for that answer. My constituents want practical help with energy bills, not a rearrangement of the deckchairs at the regulator, Ofgem. Will he confirm what steps the Government are taking to help my most vulnerable constituents keep warm this winter?

Absolutely. There will be no return to the 1970s under this Government. We will offer practical help to people struggling with energy bills. This winter, as I have said, that means: a warm home discount worth £135 for 2 million households, including 1.1 million pensioners; guaranteed winter fuel payments for all pensioners; and cold weather payments permanently uprated to £25. Of course, we are also rolling out the most ambitious energy efficiency programme to date, which I am sure will be of great help to my hon. Friend’s constituents.

Topical Questions

Since the last Energy and Climate Change questions we have been busy. The Energy Bill is continuing its progress through Parliament and we hope that it will achieve Royal Assent by the end of the year. That will help deliver the modernised infrastructure and cleaner energy that the country needs to meet our energy security requirements and climate change obligations. The House might be interested to know the latest figures we have on investment: we have seen at least £35 billion invested in increased electricity infrastructure alone since 2010, a 56% year-on-year increase in renewable energy investment and a doubling of renewable electricity generation under this Government. Also, our policies to help the fuel poor are in place for the winter.[Official Report, 1 November 2013, Vol. 569, c. 7MC.]

Pensioner Val Soames has been in touch to advise me that E.ON has told her that it is scrapping its fixed-rate StayWarm pensioner tariff as a result of Government policy, just in time to increase the bills of thousands of pensioners this winter. When exactly did the Minister last speak to E.ON about this problem, and how is he going to put it right?

I speak to E.ON and other energy suppliers and generators frequently. We are looking at the tariff reforms to make sure that they deliver the competitive markets that Ofgem believes they will. We believe that a large number of people will be really benefited by these reforms.

T3. The Government are rightly encouraging investment in energy infrastructure by institutional investors through initiatives such as the Treasury’s pensions infrastructure platform. Will the Minister’s Department tell the Treasury how important it is that that investment in infrastructure is low-carbon and compatible with our overall climate change goals, and will he welcome ShareAction’s campaign to encourage institutional investors to invest in truly green energy futures? (900540)

My hon. Friend knows that we are a champion of low-carbon energy investment. I strongly welcome ShareAction’s campaign to promote responsible investment by pension funds and fund managers. People who operate these pension funds should think long term, and there is no longer-term problem and challenge for the people they are investing for than climate change.

During these questions British Gas has announced that from 23 November it will increase its gas prices by 8.4% and its electricity prices by 10.4%. This is the company that, with Centrica, has passed on the highest share of its profits to its shareholders while making the least amount of investment into what we need to ensure our energy security in future. Two years ago the accountancy firm BDO warned that the big six energy companies could be under-reporting their profits and recommended tighter rules, but the Government and Ofgem failed to act. We backed the new rules, and so did a recent Select Committee report, but in their response all the Government could say was, “Government is not in a position to comment.” Why will not the Secretary of State stand up for consumers, support Labour’s price freeze and make the energy companies tell us exactly how much money they are earning?

First, that is extremely disappointing news for British Gas customers. British Gas will need to justify its decision openly and transparently to bill-payers. British Gas was the only energy company not to meet its targets under the previous obligation to make its customers’ homes more energy-efficient. That left more homes cold and its customers paying over the odds. British Gas has form in failing to meet its targets, the last of which was set by Labour. I hope that the right hon. Lady will join me in making sure that British Gas is more transparent about its costs. We are pushing competition, and I urge British Gas customers who are unhappy to change their supplier.

T4. I welcome the emphasis on microgeneration, including ground-source and air-source heat pumps, plus deploying solar PV on rooftops and brownfield sites where appropriate, and I recognise its potential, but what is being done to stop deployment of the unwanted large-scale ground-mounted PV farms? (900541)

My hon. Friend makes a good point. We have an ambitious plan for solar, focused on rooftops, on-site generation and brownfield sites. That is why this summer we toughened up the planning guidance, distributed it to local authorities, and made it absolutely clear that the need for renewable energy does not automatically override environmental protections and the planning concerns of local communities. I want to see our guidance in force, and I will be writing to local planning bosses to make sure that they take it on board.

T2. Under this Government, according to Ofgem’s latest figures, average household fuel bills have increased by £315 a year, while wholesale energy prices have gone up by just £145 a year. That leaves a gap of £170 a year. How much of that is made up by the extra tax taken by the Government from consumers, and how much by higher profits taken by the energy companies? (900539)

The hon. Gentleman will know that the vast majority of the rises in people’s bills have come from wholesale prices, as he said, and network cost rises. He should know that a bill is made up of a host of things: the biggest portion is wholesale and the next biggest is network cost. They are the big cost measures that people are unfortunately experiencing.

T7. In my constituency there are two major brick-manufacturing companies. As hon. Members will know, brick making is highly energy-intensive, and I am concerned that, without action, increased energy costs will make their product potentially unaffordable to the construction industry, which is getting on with the essential task of building the homes we desperately need. What is my right hon. Friend doing to address this urgent and pressing issue? (900544)

I will certainly look at my hon. Friend’s specific points about the brick industry. We have an energy-intensive industries support scheme and are already making payments under it. We hope to conclude further payments by the end of this month. I will certainly see what can be done to help the brick-making industry and see whether it can be included in our measures.

T5. On the question asked by my right hon. Friend the Member for Don Valley (Caroline Flint) about British Gas price rises, will the Secretary of State explain how British Gas has increased its operating profit to nearly £1.6 billion, as announced in June 2013, and yet people around the country will now see their prices rise by 8% and 10%? How can that be fair to this country’s consumers? When will the Government get a grip on this and finally do something about it? (900542)

We are doing things about it. Not only are we promoting competition and urging people who are unhappy with suppliers such as British Gas to change and choose others—there are plenty out there, thanks to this and not the hon. Gentleman’s Government—but we are also making sure that the energy companies are more transparent. I urge British Gas to publish and be more transparent about the increased policy costs that it is blaming for these bill rises. We have looked at its initial figures and question whether the policy costs, which it claims are putting up the bill, are the root cause.

T9. Given the importance that the Minister has placed on converting coal-fired power stations to biomass, including the plans for those in Drax and Eggborough in my constituency, and also in the light of National Grid’s winter outlook report, which states that capacity reserves could be as low as 5%, will he update the House on the progress of those two strategically important projects? (900547)

We recognise the importance of biomass projects such as those in my hon. Friend’s constituency. We included draft strike prices for biomass in the prices we published at the end of June and we expect to confirm them by the end of the year. We hope that between 1 GW and 4 GW of biomass will come onstream.

T8. The Minister previously promised me that he would discuss cold alarms with the energy suppliers and let me know their response, but he has not. With people choosing between heating and eating, and with prices ridiculously high, will he please now tell me what progress he has made on cold alarms, which will alert vulnerable people and their carers when temperatures become dangerously low and prevent more unnecessary deaths this winter? (900546)

I apologise to the hon. Lady. I am not sure whether she actually wrote to me, which I invited her to do following her question. I will look at the issue again after these questions to see where we are, and I will write to her later today.

Will the Minister confirm that he is continuing to work with industry to agree a long-term strategy for the offshore wind sector that will secure large-scale private investment and create thousands of jobs in my constituency and other coastal constituencies?

We have an offshore wind industrial strategy, which we published earlier this summer, and I look forward to taking it forward with the Offshore Wind Industry Council, which I co-chair. Offshore wind is part of the energy mix. We have put draft strike prices out for consultation, which has now closed, and we are analysing the responses. We expect to confirm the final strike prices for offshore wind by the end of the year.

A missive from Ineos Grangemouth, which supplies 80% of the fuel for Scotland and the north of England and accounts for 10% of the gross national product of Scotland, says that the plant is

“shut and will remain shut”.

I have kept all Ministers informed through the Secretary of State for Scotland, as well as those on the Opposition Front Bench. The Secretary of State for Energy and Climate Change said earlier that he wanted people to get back to ACAS. However, he has also made it clear that supplies will still get through to Scotland by other means. The company has prepared for this and the cold shutdown of the refinery and petrochemical plant has been done deliberately. It must be urged to start up the plant again and to take the knife from the throat of the workers and the gun from the head of the Scottish people.

I know that the hon. Gentleman takes a close interest in this matter and is a voice of moderation. He knows that I have worked hard to get the ACAS talks going. They did get going, but unfortunately they broke down. I repeat my request that all sides get around the table and resolve the matter without a dispute. I am pleased that Unite called off the strike. We have been working with the Scottish Government and the industry to ensure that Scotland gets the petrol, diesel and heating oil that it needs.

When will the Government publish the Atkins report and their response so that we can begin to unlock the huge potential in Cornwall and the UK for deep geothermal energy?

That is an important report. I cannot give my hon. Friend an exact time, but it will be published relatively shortly.

Given the announcement from British Gas, would the Secretary of State not be best advised, rather than just expressing disappointment and urging transparency, to send out the message that there will come a point when he will intervene on these companies that are jacking up prices? At what point will he intervene?

I have done more than that from the Dispatch Box. I have said to British Gas customers that if they are worried about the prices, they should change supplier. A range of competitors and alternative suppliers are offering much better deals. By the way, those suppliers are there because of the actions of this Government. In 2011, no other independent supplier could compete with British Gas and SSE, and none had more than 50,000 customers. We now have strong, independent suppliers that customers can turn to and I urge them to do so.

In welcoming the new solar road map, in which the Minister sets out guiding principles for the appropriate siting of solar PV, may I ask what added protection from solar farms the road map gives to green-belt land?

The road map sets out our industrial strategy. The right place to protect important areas such as the green belt, areas of outstanding natural beauty and grade 1 agricultural land, about which we care passionately, must be the planning process. In particular, we must ensure that local people have a proper say. That is why I am reminding local planning authorities that they have a duty to enforce that.

I do not know why the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) was not heard with his first question, but I hope that he will be heard this time.

A number of times today, the Secretary of State and his Ministers have defended the policy of simplifying tariffs for energy customers, but they have not once addressed the fact that low energy users, who are often people on low incomes, are worse off because of the recommendation from Ofgem to reintroduce standing charges. Will he look at that issue and ask Ofgem to reconsider the policy that it appears to be imposing on the energy suppliers?

We believe, and there is a huge amount of evidence for this, that the Ofgem reforms will lead to more competition, because they will get rid of a lot of the confusion and complexity. The last Government failed to act on the multitude of tariffs, which have got in the way of the consumer’s ability to choose. There may well be a few people who see an increase in tariffs in the short term because of Ofgem’s reforms, but because of the extra competition that will bear down on prices, the majority of people will get a better deal.