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Oral Answers to Questions

Volume 571: debated on Thursday 28 November 2013

Energy and Climate Change

The Secretary of State was asked—


I agree that there should be a power sector decarbonisation target for 2030. That is why the Government are legislating so that a decarbonisation target range can be set in 2016, once the fifth carbon budget has been set. When that target has been set, we believe it will be the world’s first such legally binding decarbonisation target.

I am interested to hear that the Secretary of State agrees with me. We have all-party support for the Climate Change Act 2008, a recommendation from the Committee on Climate Change that the target for clean power should be set now, rather than later, and a Bill going through Parliament that could get rid of all the uncertainty. By delaying this decision until 2016, is he not simply creating greater investor uncertainty, risking green jobs and kowtowing to the Chancellor?

I should like to pay tribute to the hon. Lady, now that she has told people that she will not be standing at the next election. She has been a doughty champion of green issues in the House. However, I do not believe that this short delay of two years will have the impact that she describes. She should remember that we have the EU 2020 targets for energy efficiency, renewables and emissions; the Climate Change Act, with the carbon budgets running up to 2027; and the Energy Bill which provides the most secure framework, the levy control framework going up to 2020, and industrial strategies. This country is arguing for the most ambitious 2030 greenhouse gas emissions target of any EU member state. It is just not true that investors think that this Government are not committed to this issue.

This Government talk loudly, and at times obscenely, about the costs of decarbonisation, but they say little about the benefits, such as the potential for green jobs on Tyneside, which leads the world in clean power. If the delay is not causing the lack of investment, why has investment in clean energy fallen by billions of pounds since this Government came to power? And what is the Secretary of State going to do to bring more green jobs to Tyneside?

The hon. Lady should not talk down the sector or her own area. She ought to know, because we have debated the matter at the Dispatch Box, that £31 billion has been invested in renewable electricity since 2010. We have doubled the amount of renewable electricity generation since we came to power.

Does the Secretary of State agree that setting a decarbonisation target for 2030 would greatly assist the much needed investment in Hull by Siemens? Or does he agree with the Prime Minister that this is all just “green crap”?

The whole Government, working with colleagues like the hon. Gentleman, are doing our very best to ensure that we get that supply chain investment in the UK for our green sector. He knows that we are working with him and other hon. Members from Hull to do just that.

The Secretary of State will be aware that the UK now has among the lowest emissions per capita and per unit of GDP in Europe. For example, they are 25% lower than those of Germany, which has just embarked on a programme of building coal power stations. Is there anything more we can do to help our European partners have any kind of meaningful targets?

I am grateful to my hon. Friend for his question. We are working with all our EU partners to raise ambition in the EU. This Government have proposed that we should have an EU target of a 40% reduction in domestic greenhouse gas emissions by 2030, and be prepared to go up to 50% if we can get a global deal in 2015. We are leading the way in Europe on ambition.

My right hon. Friend will have noted that progress towards the decarbonisation goal was interrupted this week by the withdrawal of the Atlantic Array offshore wind project off the north Devon coast. Is he concerned that if that were to be followed by other decisions by utility companies to withdraw from such schemes, we could lose control of those critical national infrastructure decisions? Is he content with a situation in which the big six and foreign utilities effectively have a veto over those critical investment decisions?

I do not see it quite as my hon. Friend does. We were initially disappointed when the decision on the Atlantic array was announced, but when we learned that it was for technical reasons and that the further analysis of the seabed that was needed would have increased the cost, we understood why it had been taken. My hon. Friend should be reassured, because the number of applications that we have received for final investment decision-enabling contracts for difference—the “go early” CFDs—has far exceeded our expectations. I believe that there will be some good news on offshore wind shortly.

As has been said, RWE pulled the plug on the 240 turbine, 1.2 GW wind farm in the Bristol channel this week, saying that it was not the right time to invest, although I accept that it also cited some technical reasons. That is the pattern with this Government: investment has gone down from £7.2 billion in 2009 to a point where it is expected to be £1.9 billion this year. Nearly four of the five projects coming on line since 2010 were started under Labour. Does the Secretary of State accept that his refusal to adopt a 2030 power generation decarbonisation target now is scaring away investment, damaging green jobs and jeopardising our future energy security?

That, of course, is absolutely not the case. If anything is damaging green jobs, it is the Leader of the Opposition and his irresponsible position on freezing energy prices. That has had a damaging effect on investment, and the right hon. Member for Don Valley (Caroline Flint) knows it. We have a very good record in this area, and I am looking forward to making more announcements of more investment.

Switching Suppliers

2. What assessment he has made of the process involved when a Scottish and Southern Energy customer on its “Total Heating, Total Control” tariff tries to switch to another electricity supplier. (901299)

The ability to switch supplier is a key driver of a competitive market, and it is important that we address areas where this is difficult. I therefore welcome the opportunity to discuss with my hon. Friend the particular difficulties faced by customers on the “Total Heating, Total Control” tariff.

The Government are right to encourage people to switch their supplier to get a better deal. However, consumers on SSE’s “Total Heating, Total Control” tariff find in practice that they cannot switch because wiring and meters need to be changed and other suppliers simply do not want to know. What can my right hon. Friend do to make it easier for these consumers to switch?

My hon. Friend is right to say that customers who have dynamic teleswitched meters inevitably have a narrower choice of supplier. It is therefore all the more important that Ofgem ensures that the tariffs they are on are kept reasonable. I would like to discuss further with him how we might help those particular customers to switch more easily.

Following on from what the Minister just said, one reason why people want to switch from this tariff is that they are finding that although the headline increase announced by the company is high enough, they are being quoted sometimes twice that increase in their electricity prices. Is there anything he can do to press Ofgem on why there is such a huge increase in this tariff?

I shall certainly do that. When Ofgem last looked at this tariff, it thought that the price was reasonable compared with some other time-of-use tariffs offered by other suppliers, such as Economy 7. However, I am very happy to take the matter up again with Ofgem.

In taking the issue up with Ofgem, the Minister needs to emphasise just how trapped these people feel. They feel that they cannot shop around and they want to be completely reassured that they are getting the fairest deal possible. In the long run, will he examine whether it would be worth accelerating and prioritising the roll-out of smart meters for these customers to make it easier for them to switch?

As I have said, it is not satisfactory that dynamic teleswitched meter customers have a choice of fewer suppliers than other customers, although there are technical reasons for that. I am happy to take this matter up again with Ofgem to see what we can do to make it easier for such customers to switch.

A number of my constituents who have switched recently have been hit by significant charges—in one case, thousands of pounds. Given that switching is the Government’s main policy on energy, what can they do to ensure that mistakes are not being made by energy companies and that there is a fair deal for all customers who switch?

If the charges are at that level, it is clearly unacceptable. We will look at this with Ofgem to make sure that everybody is entitled to a choice— everybody is entitled to switch—and if there are particular difficulties with dynamic teleswitched meters, they need to be looked at.

Green Levies

I have had a number of representations on the level of green levies, and the Government expect to make a statement on the conclusions of our current review shortly.

I am grateful to my right hon. Friend for that reply. There is concern not only about the increase of the green levies, but about a lack of choice in where the green levies go. Is it feasible that on a household energy bill there could be a box for people to tick to show their preferred renewable to support?

We certainly want to ensure that we are doing everything to help consumers; that is why we are having this review. The hon. Lady’s proposal might create a little more uncertainty than we are trying to achieve and we need certainty for the investment.

Will the Secretary of State stand up to the Conservatives on this? There is no doubt that the Conservatives are using the green levy as a fig leaf. The fact is that we need an intelligent policy that delivers great environmental change in our country; he should not let the Tories defer that.

My colleagues and I will stand together. On the green levy review, we need to do all we can to help consumers with energy bills and I should have thought that the Opposition supported that, but I have made it clear that we will not do that on the backs of the fuel poor—we will keep our support for them in the levy—and that we will ensure that there is investment in renewable energy.

Will the Secretary of State ensure that in any review of the green levies measures are taken to protect the fuel poor, particularly those in rural Somerset?

The House will be pleased to know that the social and green levies protect everybody, whether they are in rural Somerset or anywhere else in the country. On a number of occasions, I have made clear in this House and elsewhere my commitment to maintain the support for the fuel poor.

Why is the Secretary of State persisting with the carbon price floor tax, which is unilaterally damaging core foundation industries such as steel and chemicals, when even his predecessor says it has no green benefit and is simply about lining the Chancellor’s pocket?

The Chancellor introduced the carbon price floor at the beginning of this Parliament and confirmed the rates in the Budget this year. The purpose is to send a clear incentive message to people investing in low carbon, which I believe the hon. Gentleman supports. I also hope that he supports the compensation package this Government have put together to help energy-intensive industries, to support them and to help them defray those costs.

One element of the levies applied to consumer bills funds the renewables obligation certificate payments, as the Secretary of State knows. He will also be aware that a third of those payments go to generators in Scotland, but, with 8.4% of the consumer base, they are funded by bill payers across Britain. When Infinis, a Scottish-based renewables generator, published its flotation prospectus a couple of weeks ago, it cited the outcome of separation as one of its key risks. On Monday, the nationalists in Edinburgh published their plan for Scotland to separate from the rest of the UK, asserting that

“shared support for renewables and capital costs of transmission among consumers in Scotland and the rest of the UK”

would continue. Can the Secretary of State guarantee that that will definitively be the case?

I cannot, of course, guarantee that. Should Scotland decide to vote for independence, there would have to be a negotiation. We cannot prejudge that negotiation, not least because despite the publication by the Scottish Executive this week, there was a lack of detail on some key elements. The hon. Gentleman is right to point out to the House and the country that if Scotland votes for independence and there can be no guarantee of support for renewables in Scotland from English, Welsh and Northern Irish consumers, Scottish consumers and industry could see price rises.

Energy Efficiency

Since 2010, more than 4.8 million insulation measures have been installed through Government schemes. For the average home, installing such measures can typically save between £25 and £270 on an annual energy bill.

This week, we have heard that excess winter deaths are up 29% on last year, with up to 31,000 excess winter deaths. That should be a national scandal. Why, in that context, have the Government abolished the duty to eliminate fuel poverty, why will he not agree to amend the Energy Bill to include mandatory minimum energy efficiency standards for the homes of low-income households, and will they reverse their opposition to a binding EU 2030 energy efficiency target?

I share the hon. Lady’s concerns about the winter deaths, but one has to say, being very objective about it, that there was a clear link between influenza and those deaths in the last period looked at.

We cannot be complacent about the impact of cold homes. That is why we have a national energy efficiency strategy—we are the first Government ever to have such a strategy—and why we have an ambitious public and market-based programme to roll out energy efficiency across the housing stock.

If we really want to target help with energy bills on those who need it most, why do we not insist through building standards that all new build social housing has solar panels on the roof?

I am not unsympathetic to that idea, but the responsibility for building standards rests with the Department for Communities and Local Government. We have zero-carbon homes, but the key challenge for this country is the existing housing stock in which the vast majority of people live now and in which they will live for decades to come. The real challenge for us is not to build relatively few great homes but to retrofit the entire housing stock, to the benefit of everyone.

Following that answer and speculation in the press today, does the Minister accept that cutting the energy company obligation by extending the deadline for companies to meet it would punish the companies that have so far sought to meet the obligation, cause serious job losses in the insulation industry and, most important, leave vulnerable people who have been promised that they will have that work done sitting in the cold this Christmas?

I cannot prejudge any announcement that will be coming shortly, but it is clear to all of us that Labour stands for what is effectively a green poll tax. It is right behind regressive levies on bills; it has no interest in driving value for money. The coalition is standing up not just for green values but for green value for money. Unlike the shadow Secretary of State, we recognise that £112 on bills matters to hard-working families, and if we can get better value from green measures we will extract it. Only the coalition will ensure that we get good value as well as meeting our green targets.

Order. The Minister is a little confused. I will try to rescue him. We have been advised of the desire of the Government to link questions 5, 6, 12, 13 and 14, and I am sure that that is what the right hon. Gentleman really has in mind. I should say for the benefit of the House that the reason why we cannot group questions 18, 20 and 21 is that they do not exist.

Driving household energy efficiency take-up to help consumers control their energy bills is at the heart of our approach, and with policies such as the green deal we have established the conditions to grow energy efficiency markets in Great Britain. Thousands of innovative businesses are investing in this new market, and more than 100,000 consumers have begun the green deal improvement journey to make their homes more efficient.

As the promoter of the Warm Homes and Energy Conservation Act 2000, may I ask my right hon. Friend to join me in commending National Energy Action for its efforts to encourage people to be energy efficient and help to eliminate fuel poverty?

I certainly commend the NEA. I was delighted to attend its annual reception on Tuesday. I also commend my hon. Friend, whose record on fighting fuel poverty is second to none in the House. He has long been a champion of the fuel poor. We continue to work hand in hand with the NEA, developing the energy saving network. The Department has provided £900,000 to fund the creation of the network and the NEA is developing and delivering training to 500 energy advisers, and that is in addition to the community action awards on which we are also working with the NEA.

Earlier in the year the Minister said that he would have sleepless nights if his target of 10,000 people signing up to the green deal before the end of the year was not met. We are almost at the end of the year; is he preparing for a period of prolonged insomnia?

The hon. Gentleman is absolutely right; I did anticipate around 10,000. The number of people taking up finance so far has been significantly lower—about 1,200 as of last month. However, the extraordinary thing is that over 100,000 homes have had green deal assessments, and the compelling response has been that over 80% of the people who have had a green deal assessment are installing measures. If consumers like the green deal and the products and if they are installing the measures, the fact that they are not yet using the finance does not worry me. I am delighted that over 100,000 green deal measures are being installed in people’s homes. It is fantastic news.

Joyner PA in my constituency has been providing wall insulation to people in Islwyn for over 30 years, making homes energy-efficient. When I visited the company last Friday, I was told that applying for Government green schemes is slow and bureaucratic. What are the Government doing to address that?

I am not sure which particular schemes the hon. Gentleman is referring to, but if he would like to write to me, I would be happy to address his queries or concerns in detail. I take on board what he says about bureaucracy. That is why we have got rid of the community energy saving programme, which we inherited from the previous Government and which was incredibly bureaucratic. That is why we are looking to make the energy company obligation and the green deal less bureaucratic and as easy to understand for the consumer as possible. We will continue to iterate both schemes to make them as consumer-friendly as possible.

May I draw the Minister’s attention to a Lords amendment to the Energy Bill, which we will consider next Wednesday, regarding measures to tackle fuel poverty and using the energy efficiency certificates as a means of targeting help at the poorest households? Will he give some consideration to accepting that, or a form of it, as a way of targeting help at the poorest?

The Energy Bill is on course for Royal Assent and it is very important that it does not get held up. It has been considered in both Houses. It is absolutely imperative for unlocking investment that we proceed with passing the Bill as a matter of urgency, so we remain committed to that. I am always looking for new ideas on energy efficiency, but I think that we have in place the most robust framework and the most ambitious strategy that any Government have had, but we continue to look to improve that.

Despite the Minister having slight problems with the question numbers, we know that he is exceptionally numerate, so can he tell the House how many households have actually had work done, according to his Department, under the green deal?

There were 1,173 plans in the system, as of October, and 594 are having measures installed and 219 at the end of October—[Interruption.]

Opposition Members might have had a bit too much Red Bull this morning.

The figure was 219 at the end of October, but that is the number of measures installed using finance. The really exciting thing is that tens of thousands of green deal measures have been installed, with people using the cash-back or their own money. So compelling is the green deal that people want all the savings now. If people want to take all the savings now by recognising that green deal measures are a great investment, that is a good thing. We will continue to improve the finance offer, but the green deal is up and running and it is a long-term programme.

Earlier this month I was fortunate to hear a presentation to the Transcoco—Transition Community Corsham—group in Corsham by an early adopter of the green deal. Although he was satisfied with the payback period on his green deal loan, what was striking from his presentation was that the assessment revealed some pretty fundamental flaws in his home’s energy insulation, despite the fact that it was built less than 10 years ago. Will the Minister speak with colleagues in the Department for Communities and Local Government about the enforcement of the existing building standards on new housing developments, because the failure to do that is costing ordinary people a lot in their bills?

The hon. Gentleman is right. For 13 years, under the previous Government, there was lamentable enforcement of building standards. In fact, none of us can think of a single case that was prosecuted. He makes a very valid point. I will talk with my right hon. and hon. Friends in DCLG to see what more we can do to ensure that standards are adhered to.

Energy Costs

The Government are providing help to consumers with energy bills in three basic ways: through direct financial support, with energy efficiency initiatives, and by boosting competition. In 2012-13, with the winter fuel payment, with the warm home discount, and with cold weather payments, the Government spent over £2.5 billion on direct subsidies to reduce bills. With the energy company obligation and the green deal, we are helping consumers to reduce bills permanently. Along with Ofgem, our policies in the retail and wholesale markets are intensifying competition to help consumers reduce their bills this winter and every winter.

Does my right hon. Friend agree that what the people of Redditch want are fair and firm energy policies, in the realisation that no Government can fix international oil and gas prices, despite what they are being told locally by the Opposition?

The hon. Lady is absolutely right. It is a complete con to pretend that fixing prices is going to help with bills, because no Government proposing or implementing that could fix the prices before or after the freeze period. The price freeze offered by the Opposition is not just a con but would not work.

Small businesses are important customers, and many have had huge energy price rises. They do not have the opportunity to switch easily; they do not even have a comparison website in order to look at what at other companies are offering. What are the Government going to do about this? Will they look seriously at helping small businesses with very poor margins, many of which are going under because they cannot afford energy costs?

The hon. Gentleman raises an important point. We have been working very hard on this with No. 10 and with small business organisations and looking at the real issues—for example, the automatic roll-overs that cause so many problems. We are gaining agreements with the industry to stamp out these bad practices and to help small businesses.

A quarter of our energy needs were once met by nuclear power, but that is no longer the case because six of the reactors that closed down under Labour Governments were not replaced. Does the Secretary of State agree that it would be fair to say that energy bills are tougher to control because we are now over-reliant on imported fuel sources in order to make sure that our generators are fuelled?

My hon. Friend is absolutely right. The main reason people’s fuel bills have gone up over the past few years is that there has been a huge increase in wholesale gas prices, which accounts for 60% of the increase in people’s bills. We are becoming more dependent on imports of gas, and that is partly to do with the fact that the previous Government failed to make the essential investments that this country needs.

I know that the Secretary of State will share the whole House’s concern about the number of excess winter deaths last year, and it is revealing that 80% were among the over-75s. On 12 January 2012, Labour tabled a motion calling for the energy companies to put all those over 75 on the cheapest tariff, but sadly the Government opposed it. Given that the evidence clearly shows that the over-75s are least likely to be on the lowest tariff, most likely to live in poorly insulated properties and most vulnerable to the cold weather, will he reconsider and make the energy companies put all those over 75 on the cheapest tariff in time for winter?

Of course the excess winter deaths figures are disturbing. I think that every Member and every party in this House is committed to tackling this, not least because it is a problem that every Government have faced. The solution lies in a combination of policies—health policies, social care policies, housing policies and energy policies. That is why our fuel poverty strategy, which we will publish early in the new year, is a cross-Government attempt to make sure that we are tackling the real problem. I am afraid that once again the right hon. Lady is offering a simplistic solution, and she forgets that this Government have already acted with Ofgem to make sure that everyone is put on the lowest available tariff.

To be very clear, our policy is about putting all those over 75 on to the cheapest tariff regardless of how they pay and regardless of whether they are online, which is one of the factors preventing them from getting the cheapest tariff. The Secretary of State’s policy does not affect 90% of people and will still leave those over 75 who are not online and do not pay by direct debit paying more than other people. I remind him that in his own constituency nearly 8,000 people over 75 would save up to £200 as a result of our policy. For those people, and for 4 million like them around the country, why will he not make the energy companies put them on the cheapest tariff and refocus the ECO budget on those living in fuel poverty?

Because we are doing more for the elderly. This Government brought in the warm home discount, which is taking £135 off the bills of the poorest pensioners. That is real action, taking money directly off their bills. We will certainly take no lectures from the right hon. Lady.

My right hon. Friend will be aware that consumers pay £60 extra on their energy bills because of VAT rates. Will he seek to renegotiate our VAT with the European Union so that we can get control over it and cut our energy bills?

My hon. Friend gives me too much credit, because I am not in charge of VAT. I am sure my right hon. Friend the Chancellor of the Exchequer will listen to what my hon. Friend says, but he sets even the Chancellor a tall order by wanting him to renegotiate the sixth VAT directive.

Green Policies

8. What recent assessment he has made of the Government’s progress on implementing green policies. (901305)

There has been huge progress in this area. In the Energy Bill, we are building the world’s first ever low-carbon electricity market and have already seen renewable electricity generation double. To date, the UK Green Investment Bank has committed £740 million of public money to projects in a range of green sectors, including waste, offshore wind and energy efficiency, helping to mobilise an additional £1.9 billion of finance from the private sector. From the largest investment in the railways since Victorian times to our leadership on climate change in Europe and the world, our record in this area is a vast improvement on the past.

According to EUROSTAT, we were one of only four countries in the EU 27 whose carbon emissions went up in 2012. They went up by 3.9%. That cannot be right, can it, if this is the greenest Government ever? Is the Secretary of State’s new slogan, “Vote yellow, go blue”?

If the hon. Gentleman looks at our work over this Parliament, he will see that we have been reducing carbon emissions. It is true that last year there was a small increase, because we have been burning more coal than anyone expected. As a result of shale gas, the United States has been exporting its coal. That is why this Government are working so hard to reform the EU emissions trading scheme, to make sure that we send signals so that the same amount of coal is not burned in future.

In order to be able to both maintain the hundreds of thousands of green jobs in this country and to secure hundreds of thousands more, the Government need to reassure the renewables sector and major investors through consistent messaging and certainty. Is my right hon. Friend able to reassure me that such messaging is certain and secure not only in his Department, but across all levels of other Government Departments, including the Prime Minister?

It is interesting that when the Energy Bill received its Third Reading in this House, only eight Members voted against it. All the Front Benchers of all parties bar one—and that party has only one Member—voted for the Bill. I think that sent a sign, not just from the Government, but from this whole House and across the British political system that this country supports investment in renewables.

The Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) talked earlier about good value for green money, but the green deal has been a complete failure. What is the Secretary of State’s assessment of the enormous amount of money spent on this complex, bureaucratic project that has delivered no results?

A scheme that has already led to 100,000 assessments and a huge number of very good satisfaction ratings from people acting on those surveys is a success. When the Labour party talks down the green deal, let us remember what it is doing: it is talking down reductions in carbon emissions and action on fuel poverty. It should be ashamed.

Does the Secretary of State agree that one of this Government’s many achievements has been to create an economic framework for innovative firms to start developing new ways in technology to improve our green performance so that our green economy is alive and well, generating jobs and producing good results on CO2 reduction?

My hon. Friend is absolutely right. It is not just my Department that has been involved in investing in research and development and technological innovation, vital though that is in our area. My right hon. Friend the Secretary of State for Business, Innovation and Skills has ensured investment in ultra-low emission vehicles. My right hon. Friend the Secretary of State for Transport is investing in the railways in a way that has not happened since the Victorians. We have a very proud record of investment, both in infrastructure and in innovation and technical development.

RenewableUK published a report today on offshore wind. It recognises what the Government have done, but it also warns:

“Industry is facing a hiatus in confidence that the large scale economic rewards associated with sustained high delivery levels will be achieved.”

We have heard warnings about the Atlantic array and there are signs elsewhere that offshore wind might not get the increase in deployment that was hoped for and expected. May I ask the Secretary of State not to be complacent about the issue and recognise the real problem faced by the industry?

I assure the hon. Gentleman that I am certainly not complacent, but I am aware of major investments that we believe will go forward, and that will reassure the industry and the supply chain. We already have the world’s largest deployment of offshore wind, and we are already recognised by Ernst and Young as the top place in the world in which to invest in offshore wind. With the Energy Bill going through the House with cross-party support, that gives a real signal to investors in offshore wind.

Energy Security

We published the annual “Statutory Security of Supply” report last month. National Grid is preparing stronger balancing measures for the short term. We plan to run a capacity market auction next year for the medium term. Beyond that, we are incentivising new infrastructure, including new nuclear, through the Energy Bill.

I congratulate my right hon. Friend on agreeing terms for the first new nuclear power station since 1995, which is in marked contrast to the previous Government’s failure to replace ageing power stations. Will he tell the House what other steps the Government are taking to find additional sites further to secure and improve UK energy security?

It is very telling that in the year that Hinkley Point will come on stream—2023—eight of the nine existing plants will be off the system, unless their lives are extended, which shows the legacy of under-investment that we have to face. There are now proposals for 12 reactors in total, spread over five different sites.

A quarter of our power supply will go off line in the next decade, so why is investment in new, clean energy infrastructure on course for a new low?

Since this Government came to office, five new gas plants have come on to the system and another is being built at Manchester, while two large wind farms opened this year and four more are under construction, and we have agreed terms, as we have heard, for the first new nuclear station in a generation. All that investment would be put at risk by the threat of price controls from a future socialist Government.


15. Whether the Government overruled the Nuclear Decommissioning Authority on the decision to extend the contract with Nuclear Management Partners to run Sellafield; and if he will publish all the relevant documents. (901320)

The contract review process and the decision to renew were the responsibility of the Nuclear Decommissioning Authority. Given the importance of Sellafield, Ministers were kept fully informed, and we endorsed the decision to extend the contract, which gives Sellafield the opportunity to build on the progress made so far.

I thank the Minister for that answer. Will he publish the documents in relation to this decision? Will he agree to meet me and any other interested MPs to discuss the Government’s relationship with the Nuclear Decommissioning Authority, given some of the decisions that will be taken over the coming period?

I am always happy to meet any colleagues from the House, and I am certainly happy to meet the hon. Lady and other hon. Members to discuss the performance of the company at Sellafield. I think that she is referring to the KPMG report, which was commissioned by the Nuclear Decommissioning Authority, and its use and disclosure—whether or not it should be published—is the responsibility of the authority.

Rural Energy Costs

The Government have worked with industry to co-ordinate the “Buy oil early” campaign, which I launched in September, and to provide guidance on setting up or joining oil-buying groups. We also provide assistance to the most vulnerable consumers via the warm home discount, winter fuel payments and cold weather payments.

Will the Minister bear in mind that those of us who live in the countryside very often live in old houses with solid or rubble-built walls, and very often in areas of water incursion? We cannot benefit from dual fuel tariffs, and we often rely on liquefied petroleum gas or fuel oil, which is cripplingly expensive. May I just remind him that people in rural areas have no ambition to be cold, damp and forgotten?

I assure my hon. Friend that those people have certainly not been forgotten. We have particularly addressed the issue of off-grid customers through publicising the adoption of a code of conduct so that petroleum suppliers treat their customers fairly. Ofgem is considering whether heating oil is properly covered by its consumer protection measures. We are working with the Fuel Poverty Advisory Group to improve the information available on vulnerable customers so that all the different agencies better understand where those customers live.

I thank the Minister for his comments. Is he aware that there are constituencies such as mine that are regarded as urban areas, but that contain substantial rural areas? The people in those rural areas are sometimes overlooked in this regard.

I understand that. My hon. Friend is a great champion of his constituents, whether urban or rural. There are off-grid consumers in suburban and more urban areas. We treat all consumers equally. I encourage him to look at the guide to keeping warm this winter that the Secretary of State has sent to all Members on how we can best promote such matters in our constituency.

Topical Questions

I recently published the annual energy statement, which focuses on security of supply and on competition in energy markets. Since then, I have focused on driving forward our ambitious agenda for more competition. For example, I held a recent round table with industry leaders and consumer groups to consider the practical steps that we need to take to deliver faster and easier switching for consumers. There have been significant new investments in renewable energy and I expect to make further announcements on that shortly.

Finally, the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker) and I recently attended the global climate change talks in Warsaw, where a good agreement was reached that put in place the foundations for the critical talks in Paris in 2015 and established a work programme to prepare for them.

The Secretary of State will be aware that we will shortly lose more than 12 GW of generating capacity at oil and gas-fired power stations due to EU directives. What consideration has he given to placing those power stations in our strategic national energy reserve, in order that we can retain them for when we most need them in the coming years?

I am grateful to my hon. Friend for that question. However, power stations that have opted out under the large combustion plant directive must close by the end of 2015. The directive provides no derogation from that requirement. As a safeguard against the risk of low capacity, National Grid has consulted on a new system of balancing services to procure additional capacity in the winters of 2014-15 and 2015-16 if it is needed.

My hon. Friend the Member for Scunthorpe (Nic Dakin) asked an important question about the impact of the carbon price floor on energy-intensive industries. Those industries are concerned that they are not getting the compensation that the Secretary of States suggests they are getting. May I ask the Secretary of State about the carbon price floor again? Who does he agree with—his deputy, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon), who said that it was an “absurd” waste of money and “assisted suicide” for British manufacturers, or his Liberal Democrat predecessor Chris Huhne, who said,

“We do not need it to drive decarbonisation… It was a straightforward revenue-raising measure by the Tories”?

The idea that energy-intensive industries are not getting some of the support is not true. Payments under the scheme of compensation for the indirect costs of the EU emissions trading system are being made. It is true that the proposals for compensation for the carbon price floor are still going through the state aid process. However, we have a scheme that will come out and people will get those payments.

T2. Will the Secretary of State reassure the House that neither he nor his Department would seek to block the production of any Government report on the impact of energy infrastructure and specifically the planned Department for Environment, Food and Rural Affairs report on the correlation between onshore wind and residential property values? (901324)

No, we do not block reports. We work with colleagues across Government. We are working with our friends in DEFRA to produce a report on the area that my hon. Friend mentions.

T3. Does the Secretary of State accept that the recent comments on rolling back green levies have caused serious concerns to companies such as Siemens? Exactly what will he do to ensure that the investment in Hull is not jeopardised by the mixed messages from Government? (901325)

I reassure the hon. Lady that I have made it clear that the review of green levies does not cover renewables obligation certificates, feed-in tariffs or contracts for difference. That should be a great reassurance to Siemens. I hope that she will take that message back to her constituency. I look forward to meeting her and her colleagues shortly to discuss the important investment in Hull by Siemens.

T4. A great deal of information is available to help our constituents save money on their energy bills by switching, fixing or insulating their homes, but it can be a challenge to ensure that the right information reaches those who need it most. Will the Minister commend local business Worcester Bosch for sponsoring a free information pack for my constituents in Worcester? (901326)

I certainly commend not only Worcester Bosch but the work my hon. Friend does in his constituency with the public and the fuel-poor, and particularly in getting that information to them. Last month, my right hon. Friend the Secretary of State wrote to all Members of the House and asked them to share with their constituents a guide developed by our Department, in conjunction with charities such as Age UK and National Energy Action, which explains how householders can cut their energy bills and where they can go for help this winter. There is help on offer.

T7. This morning it has been reported that in looking at the costs of energy, the Government are considering changing the cost of transmission. Will they take the opportunity finally to get rid of the discriminatory locational system for transmission and distribution costs that raises prices in the north of Scotland? (901330)

National Grid has been looking at the balance in cost between north and south, but a lot of energy is generated in Scotland, not least in renewables, and Scotland has an interest in ensuring that that energy is transmitted to England.

T5. Will the Government continue to encourage people to switch energy suppliers if they feel they are being ripped off, as I was by British Gas and E.ON UK? I have switched to M&S Energy, and saved two thirds on my bill. (901328)

I commend my hon. Friend; he is clearly one of the biggest switchers in town—but I think we always knew that. I would encourage everyone to follow his example, check their bills, and see whether they can move to a better deal. That is why we are giving statutory backing in the Energy Bill to Ofgem’s retail market reforms which will make it easier for all consumers to follow my hon. Friend’s example, compare tariffs, and get a much better deal.

T8. The number of excess winter deaths more than doubled in Ayrshire and Arran last year. Earlier the Minister referred to influenza, but my constituents are increasingly coming to tell me that they have to choose between eating and heating, particularly those in receipt of benefit cuts, sanctions and other difficult financial circumstances. Does the Minister accept that the cost of energy is a major factor in people turning off their heating and in that increase in deaths? (901331)

We absolutely get the importance of ensuring that people are able to afford the energy they need. Nobody should have to make a choice between heating and eating, and anybody concerned about that should call the energy saving advice service on 0300 123 1234. As we are so concerned about the cost of energy, the Government are determined to do their part to ensure that bills are kept as low as possible. That is why we are looking at the regressive levies that Labour put on energy bills.

T6. Nine out of 10 consumers agree they could get a better deal on their gas and electricity supply if switching could be speeded up, and a third of people would be more likely to change providers if the process were quicker and simpler. What is the Minister doing to force energy companies to reduce the time it takes to switch providers, and when can my constituents in Cannock Chase expect to see the new rules in place? (901329)

My hon. Friend will know that in the annual energy statement I challenged the industry to come forward with proposals on how the process could be speeded up without compromising quality of services or consumer rights, or putting up consumer bills. The industry has started to put forward proposals. I met industry representatives early in November and was encouraged by the discussion, and I hope to make some announcements in the new year.

Coal generates up to 50% of electricity in the UK, but sadly most of that coal is imported—there has been a 37% increase in the past year. What are the Government prepared to do to secure the future of the British deep-mining coal industry?

My Department played a role in ensuring that UK Coal Operations survived this year, following the serious fire at the Daw Mill colliery, and helped preserve 2,000 jobs at Killingworth and Thoresby. We continue to work with the UK Coal Forum and other bodies to ensure that the place of coal is properly recognised in our energy mix.

T9. What assessment has my right hon. Friend the Secretary of State made of the implications for fuel poverty if the suggestion by the Free Enterprise Group of Conservative MPs to upgrade VAT on fuel to 15% is implemented? (901332)

For the sake of clarity, let me say that the Government have no plans to change the rate of VAT applied to domestic energy. Any such policy would certainly put up energy prices and risk a very negative impact on the fuel-poor.

At 9 o’clock this morning, npower announced that 1,460 jobs are to be outsourced to India, and in addition that there will be 550 job losses in Stoke-on-Trent. Does the Secretary of State agree that that is the last straw, given the totally irresponsible behaviour of the energy companies? What will he and his colleagues consider doing in order to provide jobs in Stoke-on-Trent, which the Government have so far failed to do? We do not have a local enterprise zone. We need a joined-up approach from this Government.

The hon. Lady is right to raise that matter. The announcement is obviously very worrying for all the people involved, not just in her constituency, but in other parts of the country. We will work across the Government to see what we can do to help the people affected.

Following the publication of the Atkins report, will the Secretary of State publish a plan to implement its recommendations? The local enterprise partnership and I would like the deep geothermal demonstrator site in Cornwall to be expedited.

The hon. Lady knows that we are considering the Atkins report and that we must make choices on which renewable electricity supplies we can back. I hope she will be pleased that, through the renewable heat incentive, we are supporting geothermal heat, which will be a big boost for the industry. That might not be as welcome to her constituents in the case she raises, but we want to back geothermal heat.

Further to the question from my hon. Friend the Member for Stoke-on-Trent North (Joan Walley), 560 workers at the npower call centre in Thornaby, where many of my constituents work, will be affected by npower’s announcement to remove 1,400 jobs from the UK and send them to India—that is what it has informed the public. What communications have the Secretary of State and the Department had with npower since April? The Government will be aware that its review of call centres has been going on since then.

We have not had specific discussions on the proposal announced today, so I am afraid I cannot give the hon. Gentleman any background detail. However, as I have told the hon. Member for Stoke-on-Trent North (Joan Walley), we will work across the Government, particularly with the Department for Business, Innovation and Skills, to do what we can to help the people affected by the announcement.

Work starts this week on the installation of nine super-efficient General Electric wind turbines at the Burton Wold wind farm extension, which will generate 14 MW of green electricity and power 11,000 homes. Will the Secretary of State congratulate First Renewable on its £45 million investment in the Kettering economy?

We are seeing major investment in all sorts of renewables, including onshore wind and the farm to which my hon. Friend has referred. I very much support his call and congratulate the companies involved.

History was made at the UN climate talks last week—not, unfortunately, by an unprecedented breakthrough in negotiations, but by the unprecedented walk-out by 800 civil society groups and trade unions. What assessment has the Secretary of State made of their concerns that the talks are being unduly influenced by the fossil fuel industry? Does he agree that, if that is the case, it is unfortunate, because it does not give the talks a fighting chance of delivering what science and equity demand?

I met the NGOs before they walked out. I explained the progress we were making in the talks, and after they walked out, we made further progress. No one expected the Warsaw climate change talks to be a breakthrough. They were an important building block— a foundation—for Lima next year and for Paris and the critical talks in 2015. I have laid a written statement on the Warsaw talks.

Parish councillors near Melksham in my constituency are looking forward to the community dividend on offer from developers who propose new solar power farms in the area. When will we have more clarity on such arrangements and when will the Government publish their community energy strategy?

My hon. Friend will not have long to wait before we publish the community energy strategy. This Government are gripping the potential of community strategy. No previous Government have recognised the potential of communities to take control of energy. Thanks to innovation and new technologies, and the financial support we are putting in place, community energy has an exciting future, solar included.

Distribution and grid transmission costs account for between 20% and 25% of energy bills. Areas such as mine, which produce an awful lot of electricity, pay even more for their electricity. When will the Government review the transmission system so that we can have a level playing field across the country and National Grid can act in the national interest?

Ofgem and National Grid have been looking at transmission costs between north, south and different parts of the country. They are looking specifically at the distribution costs of local distribution operators to ensure that they are kept as low as is reasonably possible.

What does the Secretary of State say to my constituents in the rural part of Wellingborough who duly elect councillors, but when planning applications for wind farms come forward, councillors and my constituents are against those plans yet they are overturned by a planning inspector? My constituents think that democracy is not working.

We understand people’s concerns not just about onshore wind but about other forms of energy production, such as shale and so on. We need to ensure that the planning system is responsive. The hon. Gentleman knows that what he has said could be applied to many other developments outside energy. It is often the case that the unpopular development of housing or a supermarket gets overturned by the Planning Inspectorate.

The Secretary of State admitted, in answer to my right hon. Friend the Member for Don Valley (Caroline Flint), that due to Government incompetence no money has been paid to energy-intensive industries in mitigation for the carbon floor tax. However, he did say that money is being spent on the European Union emissions trading scheme. In answer to a parliamentary question, the Minister of State, the right hon. Member for Sevenoaks (Michael Fallon) told me:

“£16 million has been paid to 17 companies.”—[Official Report, 5 November 2013; Vol. 570, c. 142W.]

When I asked him to name those companies, he wrote:

“We are still assessing applications.”—[Official Report, 18 November 2013; Vol. 570, c. 663W.]

How can money have been paid out when applications are still being assessed?

More than 60 applications have been received and we have paid out on more than 20 of them. We have done that in the past few weeks. We are processing the others as quickly as possible. The scheme that my right hon. Friend the Secretary of State referred to was the carbon price floor compensation scheme, for which we are still awaiting approval under state aid rules from Brussels.

I know the Secretary of State will want to commend the work of the Somerset Community Foundation. Under its “Surviving Winter” appeal, people can redistribute their winter fuel allowance, if they do not need some or all of it, to those who need money to heat their homes. Will the Secretary of State—[Interruption.] Will the Secretary of State have further discussions with the Department for Work and Pensions to ensure that notice of that is included in the letter that goes out to everybody?

I will certainly bring my hon. Friend’s point to the attention of the Secretary of State for Work and Pensions.

Why has the UK fallen to seventh in the world for investment in clean energy since the Government came to power?

I do not recognise the hon. Gentleman’s figures. A recent Ernst and Young survey had the UK as the fourth most attractive place in the world to invest in renewable energy.