Baroness Primarolo
Main Page: Baroness Primarolo (Labour - Life peer)(9 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker (Dame Dawn Primarolo)
I inform the House that Mr Speaker has not selected the amendment.
Caroline Flint
On a point of order, Madam Deputy Speaker. As I said in the House on 2 April 2014 and have done many times since—I reminded the House about this today—the price freeze will stop energy companies increasing their prices but will not stop them cutting them. Therefore I am afraid the Secretary of State’s statements are seriously misleading, albeit unintentionally, I am sure. Can you tell me how he can correct the record?
Madam Deputy Speaker (Dame Dawn Primarolo)
That is not a point of order; it is a continuation of the debate. The Secretary of State is responsible for what he says at the Dispatch Box. Fortunately, I am not, unless it is unparliamentary, and so far he has not been.
Mr Davey
I will try my best not to be unparliamentary, Madam Deputy Speaker. For the benefit of the House let me quote what the hon. Member for Leeds West (Rachel Reeves), a shadow Cabinet colleague of the right hon. Member for Don Valley, has been reported as saying on Andrew Neil’s programme this morning: She said:
“We didn't use the word ‘cap’.”
I can show the House the Labour advert for the price freeze. I see a block of ice, and I see the words “frozen” and “freeze” but I do not see a picture of a cap. There is no cap on that advert. It is that there has been a change and that the Opposition are in complete confusion.
Let me put on record the fact that I am grateful for the support of the right hon. Member for Don Valley—she has supported, rather belatedly, our support for the deepest ever investigation of energy markets by the Competition and Markets Authority, which is now under way. However, there is one major caveat. Labour’s support for the CMA would be more credible—Labour would be more credible—if Labour was prepared to wait until just later this year to see the report; Labour could wait for the independent advice of the CMA before anyone regulates. If the CMA says that new regulations are needed to protect the consumer, I, for one, will back that. I doubt that new regulations will be its main recommendation, but I am sure of one thing: any regulation the CMA comes up with will be far more effective, far better thought out and far more likely to work than the frankly daft regulations Labour continues to propose. The fact that Labour will not wait for the independent CMA exposes its policy for what it is: a cheap political gimmick.
That is my second argument: Labour’s regulation would be bad for consumers and would put up prices. The first issue is the utter incoherence and inconsistency of Labour’s proposed regulations. Labour wants to freeze prices and, at the same time, force retail prices to go up and down with wholesale prices. As we saw earlier, the right hon. Member for Don Valley cannot explain which policy Labour now prefers: a freeze or yo-yo bills. Worse still, it now seems that Labour’s price freeze is not really a price freeze. She keeps on trying to deny it, but I have quoted the hon. Member for Leeds West and shown the figures. I can also quote The Sun. Under the headline “Mili may ditch price freeze vow”, a senior Labour source is quoted as saying:
“If bills are coming down there will have to be a rebranding to make it a cap.”
Clearly, Labour’s high command is worried: it knows that its price freeze would mean higher bills, as some of us have warned all along.
Gregory Barker (Bexhill and Battle) (Con)
Will my right hon. Friend give way on that?
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. The Secretary of State will not be giving way. The right hon. Gentleman joined the debate late. He has not been in the Chamber very long. It is a timed debate that has to end at 4.30 at the latest, and I have 13 speakers. After nearly an hour into the debate, we still have not completed the opening speeches. The Secretary of State will resume.
Madam Deputy Speaker
Order. Perhaps the Secretary of State could be generous to all the Back Benchers who wish to speak in the debate as well as intervene on him.
Mr Davey
I will take your stricture, Madam Deputy Speaker, as you are the regulator.
My final point on the right hon. Lady’s proposal is that it would damage fixed-price deals. They are the leading deals on the market and would almost certainly go in her model of regulation. I do not believe that consumers want Labour’s yo-yo prices or to pay the extra costs for the privilege of having yo-yo prices.
We have two different policy options on offer. A policy of increasing competition, which is working, has seen energy bills frozen and cut. It is a competition policy that we want to see pushed further still to get more benefit for every bill payer, not least with the CMA investigation. That approach stands against a policy of ill-conceived regulation that even in the most charitable light will increase risk, uncertainty and volatility and, as night follows day, mean higher prices for consumers. Lower energy bills from the Government or higher energy bills from Labour—I look forward to putting that choice to the electorate.
Madam Deputy Speaker
Order. I am afraid that it will be necessary to impose a time limit on all speeches. The Front-Bench teams require 10 minutes each. Therefore, the time limit on Back Benchers, of whom 13 gave notice in writing before the start of this debate that they wish to speak, will be five minutes starting now. The first speaker is Peter Hain.
Mr Peter Hain (Neath) (Lab)
I thank the Secretary of State for his revelation that The Sun is now the house journal of the Liberal Democrats. It does him and the Government no credit that their attitude to Labour’s price freeze has veered wildly, initially denouncing it as Marxist, which was a revelation to all Marxist disciples, and now misrepresenting it with a patronising approach that belies the fact that my right hon. Friend the Member for Don Valley (Caroline Flint) and the leader of the Labour party have been proved right all along on this policy, as they will be proved right in the future.
One of the best vehicles for keeping energy prices low is the Severn barrage. This huge infrastructure investment boost makes the Severn barrage a no brainer, not least because it requires no Treasury funding. The £25 billion construction cost will be financed entirely privately, mainly from sovereign wealth funds and other large-scale institutional investors, because they would have a guaranteed revenue stream over a period of 120 years or more. The project will create 20,000 jobs during its nine-year build, and with multiplier effects another 30,000 jobs, making a total of 50,000 jobs and a £70 billion boost to the economy. Many of the jobs will be located in communities in south Wales and the south-west of England, which are crying out for such a boost of investment and high-skilled jobs. Some 80% of the spend will be in the United Kingdom, unlike wind power where 80% is spent abroad because countries such as Germany and Norway have stolen the lead on wind turbine manufacture.
The scheme would harness one of the world’s largest potential sources of renewable energy: the huge tidal range of the Severn estuary—the second highest in the world. Building an 18-kilometre barrage between Brean in England and Lavernock Point in Wales would be one of the world’s largest privately funded global engineering projects.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. I must reluctantly intervene on the right hon. Gentleman. This debate is about energy prices, not energy generation from things like the barrage. He needs to relate his comments to the impact on energy prices and passing on reductions to the consumer.
Mr Hain
I was about to do that, but I need—obviously with your permission, Madam Deputy Speaker—to describe the project in order to do so.
Most importantly, the barrage would produce the cheapest electricity in the United Kingdom—half the cost of alternative sources such as gas, nuclear and coal, as well as other renewables. Previous consortia interested in the project have looked to a period of consumer subsidy lasting less than 25% of its life—very small compared with other renewables. After that initial subsidy period, promoted by previous consortia backing the barrage, it would generate electricity at £20 per MWh for at least a century, less than half the wholesale market price that the economy has been used to.
The latest project backer does not want the consumer subsidy of contracts for difference, a point which I hope the Secretary of State will note. In meetings with him, I have discussed support for the barrage, which he has not been able to give. The barrage has attracted widespread criticism from wildlife groups, but it has considerable other benefits, including low electricity prices over its entire life if the current project is taken forward in this way. In addition, it would have other important effects on the economy. The 1,026 turbines required, each the weight of a jumbo jet, would be built at two factories in the region, most probably at Port Talbot and Bristol. The planned caisson-casting yard at Port Talbot deep-water docks could afterwards be converted into a port for ultra-large container ships. It would also enable us not just to keep prices low, but to export the technology and expertise in tidal barrage construction around the world. So it would keep prices low, which consumers desperately need, and it would support flood protection. Some 90,000 properties and 500 square kilometres of Wales and the south-west, including the Somerset levels, would be supported, and it would act as a barrier against storm surges. Therefore, prices would be kept low and there would be many other benefits from the project.
In conclusion, this is the biggest single investment project coming from the private sector, needing no consumer subsidy at all in contracts for difference, according to the latest backer of the project, which I hope the Government will meet. I hope that people will see this as something that should have been backed already, and that now all parties will back it as a—