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Topical Questions

Volume 594: debated on Thursday 19 March 2015

Since the last oral questions to the Department of Energy and Climate Change, the first auction of low-carbon contracts for difference was completed. I was able to offer contracts for 27 new renewable power plants, including 15 onshore wind farms, two offshore wind farms, and five solar farms. The auction saw onshore wind prices fall by 17%, and offshore wind farm prices by 18%. Today I will publish the first annual update to our country’s first ever community energy strategy. That shows real progress in everything from district heating policy to grid connections, and from state aid clearance for the Green Investment Bank to lend to that sector, to our new water source heat map.

As this is the final DECC oral questions of this Parliament, I thank you, Mr Speaker, my Ministers and officials, Her Majesty’s loyal Opposition, and all right hon. and hon. Members for their help and advice—most of the time. The UK is now achieving on all our energy and climate change objectives, and I believe it is leading Europe on the path to a climate change treaty in Paris this December.

I thank the Minister for that response. The community energy stuff will go down well in Bristol, which is European green capital of the year, as I think I have mentioned in every DECC questions. Although we welcome the measures in the Budget, what does the Secretary of State plan to do to diversify skills in the North sea towards low-carbon and renewable technologies, given that the North sea is a mostly mature basin? Does he agree that we need a long-term transition plan for places that are currently heavily reliant on the oil and gas industry?

We are seeing a huge amount of activity in the North sea for offshore wind, and the beginnings for carbon capture and storage. About 18 months ago I brought together representatives from the oil and gas industry with representatives from the renewable industry working in the North sea. We need them to work together, particularly on issues such as regulation and the way infrastructure will develop. We need a longer-term plan, and we have been kicking that work off.

T4. Will the Minister confirm to the House that it is not the policy of this Government, or indeed the next Conservative Government, to freeze energy prices just as the wholesale market starts to reduce in price? (908185)

Absolutely. It is not the policy of the Government to freeze energy bills, not least at the level they were 18 months ago when we first received representations to do that. We have not chosen that path because we would end up with millions of consumers paying an average of £100 more for their electricity, and we would undermine investment, which is so critically needed, in the future of our energy system. It is a bad mistake and we will not do it.

I join the Secretary of State in thanking you, Mr Speaker, and others. Thursdays have become the ticket to have in questions, and there is no doubt that over the past four years energy has been front and centre of pretty much every debate across the policy range. I wish those on the Government Front Bench a happy retirement.

On a serious note, the devastation wrought by Cyclone Pam in Vanuatu has reminded us that climate change is a national security threat, not just overseas but in Britain. It is vital that the UK plays a leading role to secure a binding global agreement to tackle climate change at the Paris conference later this year. Does the Secretary of State agree that we will secure influence abroad only if we show leadership at home, and will he reaffirm his support for Labour’s Climate Change Act 2008?

I am grateful to the right hon. Lady, who makes a serious point about the impact of climate change on some of the most vulnerable people on our planet. We need to lead in the world, as indeed we are doing. She will also know that not only the Liberal Democrats but the Prime Minister, on behalf of the Conservative party, and the Leader of the Opposition recently signed a letter to confirm their support for the Climate Change Act 2008. That had huge consensus across the House—[Interruption.] As the right hon. Member for Hitchin and Harpenden (Mr Lilley) notes, five people voted against it, and nine Members also voted against the Energy Act 2013, which I put through the House and is the practical way of delivering on the Climate Change Act 2008. It is important that the world should understand that across the parties there is a lot of agreement on this issue.

T5. In my constituency, we have seen some dreadful flooding over the last decade, and I wanted to rise to thank the Department for making available the funds to complete the lower Thames flood alleviation scheme, which will save tens of thousands of homes and thousands of businesses and really help my constituents have a better quality of life with greater economic outcomes. (908186)

Order. I am tempted to think that that would ordinarily be a matter for the Department for Environment, Food and Rural Affairs, but if ingeniously the Secretary of State can contrive to fashion a response that relates to his own important responsibilities, and if he can give us what he described a few moments ago as his “considered view”, the nation will be enriched.

Mr Speaker, you are just too kind.

The Government, whether the lead has been taken by a different Department, such as DEFRA, or another Department, have done their best to deal with flooding issues. I speak as one of the Ministers with responsibility for flooding. We have done a lot of work in the south of London to assist with this matter, including on aspects of the Thames flood alleviation, but the real issue for me, as Secretary of State for Energy and Climate Change, is that if we do not tackle climate change, this country will be badly hit by more flooding. We can build the flood defences we need, but in the long term if we are to reduce the cost of climate change to this country we need to tackle climate change itself.

T2. Over the last five years, one of the biggest problems, particularly for elderly constituents of mine, has been complicated, high-tariff energy bills. On 17 occasions, the Prime Minister has said he would force energy companies by law to put their customers on the lowest energy tariff, but three out of four households are still on energy tariffs that cost on average £180 more than the lowest one. What are the Government going to do about that? (908183)

We inherited an energy market that was completely broken and a situation where energy bills were complicated and opaque, but we and the independent energy regulator, Ofgem, have acted. We now have simpler bills, fewer tariffs and increased levels of switching, which are helping huge numbers of people. On the specific point the hon. Gentleman raises, Ofgem, in its retail market review, proposed the policy he refers to and is making sure it goes through, but if he has examples suggesting that any suppliers are not delivering on that new regulation, he should bring them to the independent regulator’s attention.

T6. Does my right hon. Friend agree that the single biggest boost to the British and world economy has been the halving of the oil price, and does it not follow that forcing British industry to use energy that costs twice as much as conventional energy will have a depressive effect on the British economy? Why oh why is he insisting on our moving to wind, which costs twice as much, and this Swansea tidal power, which, according to the Financial Times, will involve a price three times that of conventional fuels for 35 years? Is that not going to depress the British and Welsh economies? (908187)

I have a lot of respect for the right hon. Gentleman, who is known for his intellectual abilities and knowledge, but I am afraid that on this occasion they have failed him, and for this reason: we do not use oil to produce electricity—we haven’t for a long time. His point relates to transport. Oil is a substitute for transport fuels. I think he is talking about gas, but the price of gas has not come down by very much. Moreover, the fall in the price of gas was taken account of in the way we produced the levy control framework, which is the support for low-carbon electricity.

T3. Earlier this month, I spoke at North East Call to Action’s time to act day, which brought together organisations and people from across the region who wanted the UK to lead in combating climate change through decarbonisation and to build a long-term sustainable economy based on clean energy, green technology and skilled jobs. When I reminded them of the Prime Minister’s promise that this should be the “greenest Government ever”, there was widespread laughter. Why does the Secretary of State think that was? (908184)

Because some people have not looked at the facts. This is the greenest Government ever, but as I have said—[Interruption.] Well, we have seen massive increases in low-carbon energy and a big increase in energy efficiency, so I am afraid that the hon. Lady is completely wrong. Let me explain why some people laugh. It is because the bar for being the greenest Government was not very high—the last lot did such an appalling job. I want to make sure that if Liberal Democrats are in the next Government, it will be the greenest Government by a long way, which is why we have published proposals for five green Bills. We need to build on the success of this Government and go a lot further.

T9. By when does the renewable energies Minister think it might be possible to generate solar energy without subsidy? (908190)

Solar energy has been a great success under this Government. As my right hon. Friend the Secretary of State pointed out, 99% of solar energy developments have taken place under this Government, not least because of the great boost given by my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), who put together the solar strategy in 2014, for which we are very grateful. The great news about solar energy is that it is likely to become subsidy-free in the next five years. That will be a classic example of investing in renewable energy and making sure that, as it increases, it becomes subsidy-free.

T7. Hundreds of jobs are still waiting on a state aid application from UK Coal. The Minister promised an announcement would be made before the Dissolution of Parliament. Will he confirm when it will take place and whether it will be before the Dissolution? (908188)

This is an important issue for the two coal mines owned by UK Coal—two of the three remaining deep coal mines. I pay tribute to the hon. Gentleman, who has been steadfast and hard working in delivering on this issue. There will absolutely be a decision before the Dissolution of Parliament.

I warmly welcome the Government’s commitment to expanding renewable energy generation, but does the Minister agree that we should not tolerate the payment of renewables obligation certificates or feed-in tariffs to unlawful developments?

T8. The Secretary of State will be well aware that he promised me at the last Question Time that he would come back to me on the report on vulnerable customers that I produced with the Energy and Climate Change Select Committee. Is this going to be another one of the Government’s unfulfilled promises, or will he come forward as soon as possible with a reply to this important report on how to ensure that vulnerable people will be taken care of when they most need help? (908189)

I am surprised that the hon. Gentleman asked that question. He knows that I have read the report, because I have talked to him about it. I have told him in this Chamber that I wanted to respond to it. I thought that the reply had winged its way to him. If it has not, I shall chase it up. Let me say to him and the House that I read his report and thought it was very good.

I recently met senior management at the Phillips 66 refinery in my constituency. The refinery has the lowest per barrel SO2 emissions in the country, but it fears that the continuing demands of the industrial emissions directive will increase costs with little benefit to the environment. Does the Minister share my concerns, and what action is he taking to protect the industry and the jobs?

It is important to ensure that we have clean emissions and that we abide by our international obligations. None the less, I am looking forward to my visit to Cleethorpes and the refinery to see the impact for myself and to make sure that, locally, whatever changes need to be made will be implemented as carefully as possible.

T10. An elderly constituent recently contacted me about her confusing energy bills. She had to make a payment, but the complicated bill structure meant that she had no idea of how the charges had been calculated, causing her some distress. It is obvious that Ofgem’s reforms to make bills simpler, clearer and fairer have not worked. Is it not about time that the Government started to stand up for consumers and treat ordinary people fairly and honestly by ensuring improved transparency in energy bills? (908191)

I am surprised to hear the hon. Gentleman make that point. There has been a great improvement in bills, which are much simpler now. Furthermore, the energy suppliers must now inform consumers if a lower tariff is available, even if it involves different payment methods. However, if there is an issue I shall be happy to look into it. and the hon. Gentleman should also contact Ofgem.

One of our purposes in setting up and investing in the Big Energy Saving Network was to ensure that vulnerable people could obtain face-to-face advice, and organisations such as citizens advice bureaux, Age Concern and National Energy Action are funded and trained to deliver that advice.

A few minutes ago, my right hon. Friend the Minister of State gave a very helpful answer to a question about demand-side response. In support of the Government’s fully justified claim to be the “greenest Government ever”, which I congratulate them on achieving, may I press him a little further? Is he aware that some people in the demand-side management industry are worried about the way in which the capacity market auction operated just before Christmas, and will he undertake to look into exactly how it is working in good time before the next auction, with the aim of establishing a level playing field as between different types of demand?

I met representatives of the demand-side response industry in the autumn. I can give a commitment that we will review the way in which the market operates before the next auction, which we expect to take place this autumn.

May I take this opportunity to pay tribute to the Secretary of State? Although we are members of different parties, we have worked extremely closely, and I think that he has been a terrific Secretary of State. His support for the nuclear industry has been revolutionary, not least in his own party; his support for market-based solutions to renewable subsidies has been first-rate; and his support for my right hon. Friend the Chancellor’s proposal for a Swansea bay tidal lagoon has been exemplary. It has been a pleasure to work with him, and I wish him all the best.

You will know, Mr Speaker, that I hate to be the curmudgeon at the party, but I must inform the Secretary of State that, according to findings published this morning by the Leeds university research team, we have entirely failed to meet proper carbon emission reduction targets, and must redouble our efforts if we are going to take account of all the goods that we import from China and other parts of the world.

The hon. Gentleman has clearly not read the report, and he has clearly not read what the Chair of the Energy and Climate Change Committee, and indeed Greenpeace, has said about it. Not only are we more than meeting our carbon emission reduction targets, but as the hon. Gentleman will see if he reads the report, there are different ways of accounting—we have made that point a number of times—and we are accounting in the way that is internationally recognised. If the hon. Gentleman wants to change that system on the eve of climate change talks, he must be completely barmy.

Does the Minister agree that, when the history of the coalition comes to be written, the Department of Energy and Climate Change will be seen as outstanding in terms of effectiveness and impact, and as a cut-out example of two parties, Conservative and Liberal Democrat, coming together to govern in the national interest? In that context, may I also pay tribute to the terrific leadership of the Secretary of State, his effective ministerial team, and the brilliant officials—[Interruption.]

Order. I must say to the House, in response to a sedentary interjection from an Opposition Member, that the use of the word “barmy” is a matter of taste rather than order.

Talking of taste, Mr Speaker, I thought that the question from my right hon. Friend for Bexhill and Battle (Gregory Barker) was very tasteful, and that he made a very sensible point. I am grateful to him. I think it is clear that, although there are some differences between us on some aspects of energy policy such as onshore wind, the two parties have been able to work together in the country’s interest to achieve our objective of providing affordable, secure, green energy. I am grateful to the Minister of State for what he said earlier, although he did make me laugh when he claimed that the Chancellor was the force behind the tidal lagoon.

What discussions has the Secretary of State had with the Chancellor about the damage that could be caused to community energy co-operatives by the proposed exclusion of co-operatives from future tax allowance schemes?

We have discussed the matter extensively with the Treasury, and we have introduced something called social investment tax relief. It is better than its predecessor, because it gives community energy companies tax relief not just on equity finance but on debt finance, thus expanding the instruments.

There is an issue concerning which types of organisation should be able to claim the tax relief. The whole purpose of supporting community energy is to support schemes that give real benefits to the community, and energy co-operatives do not necessarily do that, although they benefit their membership. However, we have been working with the community energy sector as well as the Treasury, and I think that if the hon. Gentleman reads today’s update, he will see that we have come up with a very effective solution.

Before the last election the Prime Minister, when he was Leader of the Opposition, said:

“I think we all feel that when the gas prices or the oil prices go up, they rush to pass the costs onto us and yet when we read in the papers that the oil price has collapsed…we wait for a very long time before we see anything coming through on our bills, and I think the first thing you’ve got to give the regulator the teeth to order that those reductions are made and that is what we would do.”

Why did he break that promise?

That is exactly what is happening. At that time, in 2009, when the Leader of the Opposition was the Secretary of State for Energy and Climate Change, nothing happened: bills did not come down and the Secretary of State did not lift a finger. Instead, this time I called in the big six and as a result they cut prices: they cut prices to pass on in full the wholesale reductions, and consumers benefit in a way that they could not if the energy price had been frozen at the high level suggested by Labour.

At the Paris negotiations the central words will be “common but differentiated,” and while I entirely agree with the Secretary of State’s response on the subject of consumption emissions, does he accept that consumption emissions will play into that debate about common but differentiated responsibilities?

I have met a range of climate change negotiators, particularly the Chinese negotiator Minister Xie, and interestingly they have never raised that issue. They have raised many other issues, but they have never raised that specific one, so it would be a first for the negotiations. There are other issues that we need to focus on, however, and we set out our position in a publication last September.

Order. I think we will leave it there. I am sorry to disappoint remaining colleagues, but we have quite a lot to get through.