Oral Answers to Questions
Debate between Caroline Flint and Chris Huhne(12 years, 3 months ago)
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Chris Huhne
The absolute key to what is happening with solar panels is the collapse in the cost. The idea that something might not be attractive commercially today does not mean that it will not be so in pretty short order. What has been happening over the past 18 months is an enormous increase in the production capacity of China. Essentially, what has happened is that the Henry Ford of solar panels—who happens to be Chinese these days—has introduced the Model T, and we are getting an enormous reduction in costs as a result of economies of scale.
Caroline Flint (Don Valley) (Lab)
When the cuts to solar were announced, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker) claimed that they would create jobs. Paragraph 73 of the impact assessment, signed off by the Minister on 2 November 2011, says that
“there could be around 1,000 to 10,000 gross additional jobs in this sector in the three years to 2014/15”.
Can the Secretary of State confirm today that those 1,000 to 10,000 jobs are not additional jobs, but the total number that the industry will support, which, for a sector that currently employs nearly 30,000 people, means tens of thousands of job losses?
Chris Huhne
What is absolutely crucial for the sector is that there should be a sustainable pathway for growth in the future. What the right hon. Lady has completely failed to address is the fact that if we continued to over-subsidise at the previous rate, we would have fewer than half the installations that we can afford to subsidise today with the new rate. It was not an accident that the British Photovoltaic Association intervened on our side in the courts, precisely as a result of that calculation.
Caroline Flint
Seven times I have asked the Minister of State what these cuts will mean for jobs; seven times he has tried to hide the fact that his cuts will put thousands of people out of work. According to his figures, released on Friday,
“in the 2012/13 to 2014/15 period…the total number of gross full-time equivalent jobs will be 1,000 to 10,000.”
That is not additional jobs; that is the total number. Nothing can hide the sheer incompetence of the Government’s handling of this. Is it not about time that the Government stopped thinking about saving face, creating more uncertainty and wasting even more money on more legal challenges, and sat down to work out how we are going to put the industry on a sustainable footing?
Energy Prices
Debate between Caroline Flint and Chris Huhne(12 years, 4 months ago)
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Chris Huhne
The hon. Gentleman makes a good point. One of the first things I did on becoming Secretary of State was to ask for a serious look at the issue. It is unfortunately much more complicated than one might suppose at first glance, not least because there is such an enormous variation in energy use in different income groups. For example, among the poorest people measured by income, the variation in energy use, off the top of my head, was as much as a multiple of six. There could be dramatically different effects from a rising block tariff, which do not correspond neatly to what the hon. Gentleman and I would want.
We want the companies to take more account of the wholesale market. Up like a rocket and down like a feather—that was the old days, and it must end. I agree with the right hon. Member for Don Valley in her points on that, although I note that Ofgem did not find evidence that that was the case. We are helping, through greater competition, to get the consumer the best deal and we have done a great deal to defend the consumer interest over the past 20 months—rather more, I would say, than the right hon. Lady’s Government did in 13 years.
Caroline Flint
Will the right hon. Gentleman answer my question? How many consumers have switched since the energy summit?
Chris Huhne
I will let the right hon. Lady know the information as soon as we have it. When it is available, I will write to her.
It is important to get the message across that households can save money not only by switching supplier, but by using less energy. Insulating lofts and walls can cut energy bills. The six largest energy suppliers all offer free or cut-price insulation, yet many households still have not taken up the offer. That is why the Government are writing to 4 million of the most vulnerable energy customers to tell them that they are eligible for free or heavily discounted loft or cavity wall insulation, and I am pleased to say that the initiative has been funded by suppliers.
Durban Climate Change Conference
Debate between Caroline Flint and Chris Huhne(12 years, 5 months ago)
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The Secretary of State for Energy and Climate Change (Chris Huhne)
With permission, Mr Speaker, I wish to make a statement on the outcomes of the United Nations climate change conference in Durban, which concluded only yesterday. I was present for the last week and a bit of the conference, along with my colleague the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), who has responsibility for climate change.
After the disappointment of Copenhagen, last year’s Cancun conference showed that the UN climate process was back on track. The Durban conference was designed to build on that outcome and our aims were therefore higher. At our most optimistic, we hoped to agree a road map to a new global legally binding agreement to replace or supplement the Kyoto protocol. Unlike Kyoto, it would incorporate emissions targets for all countries other than the poorest and least developed. It would be accompanied by agreement to a second commitment period of the Kyoto protocol from 2013. We also aimed to encourage countries to strengthen their voluntary pledges to reduce emissions in the years before any new agreement entered into force and we hoped to establish the green climate fund.
I am pleased to say that, following two weeks of intense negotiations, we achieved each of those key aims. The talks resulted in the adoption of the Durban platform, a road map to a global legal agreement applicable to all parties. Negotiations for the new agreement, which will begin early in 2012, are to conclude as early as possible and not later than 2015 and the commitments in the new agreement will take effect from 2020.
The conference explicitly recognised the global gap between countries’ existing emissions reduction pledges to 2020 and the global goal of limiting average temperature increases to below 2° above pre-industrial levels. It launched a work programme for ratcheting up ambition, a process that will be reinforced by a forthcoming review of the scientific evidence.
The conference also agreed to adopt, next year, a second commitment period of the Kyoto protocol. Many details remain to be worked out over the coming months, including specific emissions reduction targets, the length of the commitment period and a process for dealing with surplus emissions allowances, but the headline message is clear: the Kyoto architecture—the rules and legal framework for managing emissions—has been preserved and can be built on in the future.
The conference also resolved to establish the green climate fund to support policies and activities in developing countries. The UK is one of the few countries to have pledged climate finance beyond the initial fast-start period, and we will make an announcement on the green climate fund once its design is completed.
The conference also resolved to establish a work programme to consider sources of long-term finance for developing countries with the aim of mobilising at least $100 billion a year by 2020. Progress was made on several other parts of the international climate regime, including reporting guidelines for developed and developing countries; the creation of the adaptation committee, which will provide advice and ensure coherent action on adaptation; the establishment in 2012 of the technology executive committee to facilitate the development of low-carbon technologies; further details of the framework for reducing emissions from deforestation and forest degradation; and a process for establishing new market-based mechanisms to deliver effective reductions in emissions at least cost.
As well as the substantial diplomatic and technical outcomes I have outlined, the Durban conference saw a highly significant political realignment. More than 120 countries formed a coalition of high ambition in support of a road map to a global legally binding deal. Many African and Latin American states, the group of least developed countries and the Alliance of Small Island States joined the EU to argue for the road map to a new agreement. That realignment has laid a firm political foundation, grounded in common interest, on which we can build future achievements.
I am sure that the House will wish to join me in paying a sincere tribute to the British team of negotiators. Drawn from across government and supported by the Foreign and Commonwealth Office and its posts, ours was one of the smallest of the G8 countries’ delegations, but what it lacked in quantity it made up for in quality. Its members played a key role in many of the detailed negotiating groups, sometimes on behalf of the entire European Union. The UK operated within and through the EU delegation, co-operating closely with representatives of other member states and the European Commission. By working together with our European partners, we were able to deliver more effectively for the British national interest and for our shared ambitions.
In conclusion, the Durban conference represents a significant step forward. It has re-established the principle that climate change should be tackled through international law, not through national voluntarism. It has persuaded the major emerging economies to acknowledge, for the first time, that their emissions commitments will have to be legally bound. It has encouraged all countries, also for the first time, to admit that their current climate policies must be strengthened and it has established the green climate fund to support the poorest countries in tackling and responding to climate change. It has also preserved the invaluable legal framework of the Kyoto protocol while at the same time opening the path to a new, more comprehensive and more ambitious global agreement. It was a clear success for international co-operation.
We still have much to do. Durban alone will not limit global warming to 2° above pre-industrial levels, but we have taken a clear and vital step towards our goal. I commend the statement to the House.
Caroline Flint (Don Valley) (Lab)
I thank the Secretary of State for early sight of his statement and join him in paying tribute to the British team of negotiators. Whatever our differences with the Government over their handling and delivery of policies at home, there is consensus across the House that the only way we will tackle climate change is by getting all countries signed up to a legally binding framework to cut their carbon emissions. In that vein, the progress made at Durban is to be applauded.
First, I welcome the recognition in the Durban agreement of the emissions gap—the difference between the action that countries have committed to and the action we need to take to prevent dangerous climate change. The gap is too large and I hope that the Secretary of State will say a little more about how the UK will be leading efforts to narrow it.
Secondly, I welcome the fact that Durban has re-established the principle that climate change must be tackled through a framework of international law that incorporates both developed and developing countries. It is undeniable that developed countries bear responsibility for significant historical emissions and, in the light of that, I welcome a second commitment period for the European Union to the Kyoto protocol. However, it is equally true, given the rate at which many developing countries’ economies and emissions are growing, that any meaningful treaty on cutting carbon emissions must be legally binding and include developing countries too. The Secretary of State will know, for example, that while developed countries are likely to meet the collective Kyoto target of a 5.2 % reduction in greenhouse gas emissions by 2012, global emissions of carbon dioxide rose by 45% between 1990 and 2010. The challenge now, as I am sure the Government recognise, is translating the principles and aspirations that were agreed at Durban into a treaty that can actually deliver the cuts in greenhouse gases we need.
As the Secretary of State himself has admitted:
“There are still many details to be hammered out”.
May I ask him to give the House a little more detail on the following issues? What safeguards were put in place at Durban to ensure that the next round of negotiations will deliver a legally binding global agreement by 2015? How does he intend to use our strong relationships with countries such as the United States and Canada, as well as India and China, to help to broker a global agreement? Also, and importantly, how does he plan to monitor the progress that is being made and to keep the House up to date?
Thirdly, I welcome the establishment of the green climate fund, negotiations for which started at Copenhagen under the stewardship of my right hon. Friend who is now the Leader of the Opposition. If properly financed, it will provide vital support to the poorest countries to cut their carbon emissions, mitigate the effects of climate change and underpin the positive support for a global legal framework. Again, although important details are yet to be agreed, this serves as a warning about the length of time it can take for an idea shared to become an idea implemented. On the detail of the fund, will the Secretary of State say a little more about how he expects the necessary resources to be raised so that it is up and running as soon as possible, and what contribution he expects the UK to make?
Although progress has been made at Durban, it has also shown the scale of the challenge we face and the need for a strong European voice making the case to tackle climate change. The Secretary of State himself said that the Durban conference showed that we can achieve more working with our partners in Europe than we can on our own. We can only compare that with the outcome of last week’s EU summit, which left us isolated. As the Deputy Prime Minister’s chief parliamentary and political adviser, the hon. Member for North Norfolk (Norman Lamb), put it:
“Our new position comes with very real risks. To be in a minority of one is not good.”
Will the Secretary of State reassure us that the UK’s voice within Europe on climate change will not be undermined as a result of the Prime Minister’s actions?
Finally, does the Secretary of State agree that reducing carbon emissions and preventing climate change are as much about example as exhortation? He has been generous enough to recognise the record of the previous Labour Government. We reduced the UK’s greenhouse gas emissions by more than 21% compared with emissions in 1990, thereby exceeding our Kyoto target. We also passed the Climate Change Act 2008, which was a world first, binding the UK Government in law to reduce carbon emissions by a third by 2020 and by 80% by 2050.
The Secretary of State will know that there is genuine concern across the House about the Government’s commitment to being the greenest Government ever, not least today when the cuts to the feed-in tariff for solar power come into effect. We hear that the Green investment bank will be delayed, and the future of carbon capture and storage is in doubt, so I ask him to reassure me and the House that alongside our international efforts to reach agreement to cut carbon emissions and tackle climate change, the Government will not lose sight of the need to make the UK cleaner, greener and a world leader in the low carbon economy.
Chris Huhne
I very much welcome the right hon. Lady’s response. It is very valuable, when going into negotiations such as those at Durban, to know that there is widespread consensus across the House on the key goals we are aiming for. I pay tribute to hon. Members on both sides of the House, particularly those who have been following these issues closely, in helping to sustain that consensus.
The emissions gap is too large and we will work on it. As the right hon. Lady rightly said, one of the key issues has been the importance of monitoring. One thing that the UK Government have actively encouraged has been the development of the emissions gap report from the United Nations Environment Programme. I had a very fruitful meeting with Achim Steiner in Durban, and I know that the programme will continue to build on that. I very much hope that that monitoring will build gradually over time to become the environmental and climate change equivalent of the sort of regular reporting that we have from the OECD and particularly from the International Monetary Fund on the world economic outlook. It would be good to have a regular world climate change outlook or global climate change report.
On the legal side, the step forward is very significant. As the right hon. Lady will no doubt have read in the press, there was an attempt, right up to the last moment, to insert into the final text the words “legal outcome”, which had been defined in the past by India and China as merely decisions of the conference of the parties. That would not have been adequately legally binding for our purposes in terms of an overall treaty. It was therefore an essential objective of the European Union’s team to take out those words and insert words that could not be interpreted as a voluntarist approach but could mean only that there was a legal agreement with real force. The compromise from the Brazilians which we finally adopted does exactly that—on the advice we received from the very able international lawyer on the UK team. That was confirmed at the time by our legal advisers—under some great pressure, I have to say, as we huddled at 4 in the morning, or whatever time it was, in the plenary room. They also advised some of our partners in that coalition of the willing. I think that we got a good deal that means exactly what it says.
I very much take on board the key point that we need to ensure that our environmental goals are not seen as an obstacle to development. That is an agenda on which I want very much to work with the Indian Environment Minister to ensure that there are viable and effective pathways to development at every level of income per head. I was particularly proud to participate in the launch of Ethiopia’s zero-carbon growth programme with the support of the Mauritian and UK Governments. Prime Minister Meles was at the launch as well. At the middle-income level, there is the example of Costa Rica. At the high-income level, let me respond to the right hon. Lady’s point about what we are doing domestically. I was very pleased that an objective assessment of what is being done by European countries, which was produced last week by Germanwatch, concluded that the UK had the second-best framework for dealing with carbon emissions of all 27 member states of the EU, behind only Sweden. However, our ministerial team likes to come first, so we will work on that.
On the key issue concerning our allies, such as the US and Canada, the right hon. Lady is absolutely right that we need to build our relationships there and ensure that they can be brought into that agreement as well. She asked for details of the global climate fund and about our support for it. We stand ready to support it and we have already disbursed £1 billion of the £1.5 billion allocated for fast-start finance. We are one of very few countries to have a programme of financial commitments for developing countries beyond the fast-start finance period. We have allocated £2.9 billion in total for the comprehensive spending review period and, as I said in my statement, I very much hope that we will be able to make an announcement in due course when we have concluded the arrangements on the shape of the green climate fund.
Finally, the right hon. Lady rightly mentions the importance of working with our European partners. This is a particular example of the success of European diplomacy. As one member state we would not be able to achieve anything like as much as we have been able to achieve working closely with the other 26 member states and contribute to that with the undoubted expertise we have within the UK team. Importantly, when it came to the key negotiations, it was perceived in the plenary that the European Union was acting together, and that we were very much prepared to carry through on our threat. Often in these negotiations a good bit of leverage is needed, and we were prepared to carry out our threat that we would not go ahead with the second commitment period of the Kyoto protocol unless we had those key assurances that the future agreement would be legally binding.
In addition to the change that I described in the politics of the conference, it is highly significant that China, India and Brazil, but particularly China and India, have moved substantially in the direction of accepting that we need an overall agreement which will reach a global solution to the problem.
Oral Answers to Questions
Debate between Caroline Flint and Chris Huhne(12 years, 5 months ago)
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Chris Huhne
I thank my hon. Friend for his question. He is right that anaerobic digestion is one of the technologies that we want to encourage. Indeed, it falls broadly within the renewables remit of the Green investment bank, but my understanding of the problems with anaerobic digestion is that they relate principally to planning and objections, rather than funding. Funding is not the key issue with AD.
Caroline Flint (Don Valley) (Lab)
As we heard on Tuesday, because of the Government’s cuts, which are going too far and too fast, the economy is flatlining, unemployment is rising and the Government will miss their borrowing targets. In his autumn statement the Chancellor lauded the Green investment bank as proof of his green credentials, but on 9 September the Government confirmed in a written answer that the Green investment bank would have full borrowing powers only from April 2015, subject to public sector net debt falling as a percentage of GDP. Will the Secretary of State confirm that the Government’s policy is that we will not have a proper Green investment bank with borrowing powers until 2016 at the earliest?
Chris Huhne
I thank the right hon. Lady for her question. When the Green investment bank will be able to borrow has been set out clearly from the beginning. She wants to make the point that the borrowing powers of the Green investment bank are delayed, but the reality is that we are the only leading industrial country never to have had an infrastructure bank, despite the common experience of the 1930s and despite 13 years of Labour government. I very much hope that we will meet the net debt-to-GDP target as soon as possible, and when we do the GIB will be able to borrow.
Annual Energy Statement
Debate between Caroline Flint and Chris Huhne(12 years, 5 months ago)
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Caroline Flint (Don Valley) (Lab)
I thank the Secretary of State for briefing the media about his statement today, before informing either the House or the Opposition. Is it any surprise that he is becoming increasingly rattled by growing opposition from his own Benches to the Government’s cuts in the solar power sector, and has chosen to bring his statement forward in order to squeeze time in our Opposition day debate this afternoon? Perhaps he is also trying to put a gloss on the Government’s energy policy before the energy statistics are published tomorrow—or perhaps advisers or lobbyists with “excellent contacts” with Ministers advised him to bring his statement forward. Whatever the reason, disrespect has been shown to the House today.
The Secretary of State said, “The consumer is at the heart of everything we do.” Will he start by telling us what the Government will actually do to deal with soaring energy prices? Energy bills are up by 20% this year, and standard tariffs rose by £175 between June and November alone, driving up inflation and squeezing household budgets. The Government, however, are so out of touch that their only answer is to tell people to shop around, and their only policy is to cut help to pensioners this winter. Can the Secretary of State explain why, with the end of the Warm Front scheme, for the first time since the 1970s a British Government are not offering grants to help to reduce fuel poverty?
The most effective and sustainable way of cutting bills is to reduce energy use, but the Government’s flagship energy efficiency programme, the green deal, has been delayed and is in chaos. We were expecting the green deal consultation back in September. More than two months later, it has finally appeared, but we are still not clear about what incentives households will be offered to take up the green deal, or what the Government will do to ensure that the 10p rate for a green deal package is low enough to secure the widest possible range of energy efficiency measures and the best deal for bill payers. Can the Secretary of State confirm that the Government’s forecast of the number of jobs to be created by the green deal has been slashed from 100,000 to just 65,000 by 2015?
Earlier this year, my right hon. Friend the Leader of the Opposition set out bold plans to break the dominance of the big six by requiring energy companies to sell power into a pool, thus allowing new suppliers to enter the market, increasing competition, and driving up choice for consumers. Will the Secretary of State explain why he is so afraid of standing up to vested interests in the energy industry, and delivering the reform that our energy market needs?
The green economy currently employs 800,000 people. It is estimated that the global market for low-carbon goods and services will be worth £4 trillion by 2015, with the potential to create 400,000 new jobs, but as a direct result of the uncertainty that the Government have created, the UK is falling behind. Last year, when we left office, it was ranked third in the world for investment in green growth. We are now ranked 13th, behind Brazil and India. That is bad for our economy, bad for our energy security, and bad for the prices that consumers pay, because it makes us ever more reliant on events overseas that are beyond our control.
Just yesterday, the Science and Technology Committee in the House of Lords accused the Government of complacency over the skills required for the nuclear industry. Given that power stations in the UK already import staff from the southern hemisphere to run them, given that many of the firms currently providing solar power are about to go to the wall, and given that British Gas has just announced that 850 jobs are to go, will the Secretary of State tell the House how he plans to halt the worrying decline in investment in the UK?
We look forward to the Government’s forthcoming announcements on how they propose to support energy-intensive industries, and we hope that their proposals will extend to both gas and electricity, but will the Secretary of State tell us exactly how much of the proceeds of CRC are going back into Treasury coffers? Under Labour's scheme, the money was returned to the hands of businesses to be invested in energy efficiency.
We shall have time to deal with the Government’s cuts in feed-in tariffs later this afternoon, but what sort of message does this whole debacle send out? How can the Government encourage investors to support the renewable heat incentive, the green deal or any other green policies in the future, when a growing sector, built on a flagship policy that had cross-party support, has been cut off at the knees with just six weeks’ notice? How can anyone have enough confidence to make the investment that we need when the Government are so short-sighted and so short-term, and chop and change their policies at every turn?
Today’s statement is just more evidence that the Government are out of touch, are cutting too far and too fast, and have no plans for jobs and growth.
Chris Huhne
The right hon. Lady asked what we were doing to help those who face substantial increases in energy bills. Over the last year there has been a 38% increase in world gas prices for delivery this winter, and that will inevitably be reflected in both gas and electricity bills. We have tried to protect consumers by taking the renewable heat incentive off the levy system and into general public expenditure, and by taking similar action in relation to carbon capture and storage. We have capped the feed-in tariff, and we are helping the consumer as much as we possibly can.
Far from our being afraid to take on the big six, Ofgem has clamped down on mis-selling, and we have ensured that the big six must inform people before raising tariffs. We have reduced the period within which consumers can switch suppliers to three weeks, and we are considering giving Ofgem powers to require companies to provide redress. All those steps constitute clear evidence of the determination of the Government and Ofgem to make this a highly competitive retail and wholesale market, which is the best guarantee for consumers that they will be given the best possible deal now and in the future.
The right hon. Lady mentioned the Warm Front scheme. She gave us no credit for the fact that the consultation documents on the green deal that were published today clearly show that we are replacing that scheme with the affordable warmth obligation referred to in the ECO consultation, or for the fact that the warm homes discount scheme is now statutory—it is not a voluntary scheme like that operated by the Labour Government—and will make the discounts available to those experiencing fuel poverty two thirds higher than those provided by the old voluntary scheme.
The right hon. Lady asked about incentives. The Chancellor of the Exchequer could not have made it clearer in his Budget speech that he would consider them. I believe that if the right hon. Lady waits for a matter of weeks, all will be made clear in regard to the Chancellor’s commitment to ensuring that the green deal is a great success. She should also bear in mind that we have already provided incentives, in addition to those that the Chancellor is considering. For example, all F and G-rated homes in the private rented sector will have to be upgraded by 2018 so that tenants can enjoy the benefits of energy saving.
Finally, the right hon. Lady asked what we were doing to encourage investment. The whole purpose of the electricity market reform which will be the centrepiece of the energy Bill that we will present in the second Session in May, and which we have already announced in the White Paper, is to provide the certainty that will lead to investment which, for years, the last Labour Government failed to deliver. A quarter of our power stations are going offline in the next 10 years: a quarter of our capacity. What did the last Labour Government do? Nothing—absolutely nothing. Yet the right hon. Lady, seemingly arriving from Mars, has had the temerity to come here today and pretend that we are not taking action, as if the last Labour Government had. I have to hand it to her: for sheer brass neck, she gets the prize.
Solar Power (Feed-in Tariff)
Debate between Caroline Flint and Chris Huhne(12 years, 5 months ago)
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Caroline Flint
I will make some progress because a lot of people want to speak in this debate.
At the outset, let me deal with a few of the myths that the Government have desperately resorted to peddling in defence of their plans and that appear in their motion today. The first and most bizarre is the idea that we were opposed to the introduction of feed-in tariffs and that somehow the Tories and the Liberal Democrats introduced them. It takes some audacity to try to claim credit for a scheme that was enacted, introduced and came into force under the previous Labour Government, but to try to take credit for a scheme that they are scrapping really takes the biscuit. The record will show that while Labour began this growth industry, the Government’s policies have all but killed it in its infancy.
The second myth is the Government’s claim that the reason they are cutting the tariff level is that they are worried about energy bills.
Caroline Flint
I will give way to the right hon. Gentleman in a moment. This from a Government who have cut help for more than 12 million pensioners with their heating bills this winter and who have stood back and done absolutely nothing as customers’ bills have soared and energy companies’ profits have rocketed.
If the Secretary of State really wants to talk about energy bills, I will tell him a thing or two. Let us start with how much the average annual energy bill costs under this Government—£1,345—and how much feed-in tariffs cost the public. From what the Government have said, one might think that this is costing us all hundreds of pounds a year, but it is not. Is it perhaps £50 a year, or £20, or even £10? No, the actual figure, according to the independent regulator, Ofgem, is less than £1 per household per year—less than £1 at a time when the average energy bill stands at £1,345, when pensioners are seeing their winter fuel payments cut by £50 or more, and when standard tariffs are up by £175 only since June. Labour and I will not take any lectures on energy prices from this Government.
Caroline Flint
If the Secretary of State really wants a debate about this, let us start one.
Chris Huhne
There was only ever one vote in the House of Commons on feed-in tariffs, in April 2008, when the right hon. Lady voted against. What has made her change her mind?
Caroline Flint
There was an amendment tabled by the former Labour Member, Alan Simpson. My right hon. Friend the Member for Croydon North (Malcolm Wicks) said at the time:
“I sympathise with, and fully support, people’s yearning for appropriate incentives to encourage the faster take-up of microgeneration.”—[Official Report, 30 April 2008; Vol. 475, c. 393.]
He told my hon. Friend and the House that he wanted to go away and look at what could be possible. On 5 November in the same year, the Labour Government tabled an amendment in the House of Lords that paved the way for the scheme that we have today. We do not need any lectures by the Secretary of State on who created the opportunity for feed-in tariffs in this country—it was the Labour Government.
Chris Huhne
Let me come back to the point my hon. Friend made about social schemes and social housing, about which I care. Sadly, however, another design flaw that emerged from the inception of this scheme—again, the right hon. Member for Doncaster North was responsible for it—was that it did not have the ability to recognise social housing or social schemes. If we wanted a special scheme to help non-profit-making companies, we would not have the legal basis for achieving it.
Caroline Flint
If there was a provision for communities to take advantage of solar power, why are so many local authorities and housing associations cancelling projects? As a result of the right hon. Gentleman’s initiative, 100,000 social homes will not have solar power. Did not the Labour Government set in train a review to be completed by 2013, implicit in which was the need for a “staircasing down” of the tariff to achieve value for money?
Chris Huhne
The right hon. Lady makes a good and serious point, which returns me to what I was saying before. We need to consider, and consult on, whether there should be a separate tariff for social schemes. Many social housing providers offer their tenants free electricity to encourage take-up—free electricity that has been rising in value because of the rise in world gas prices and the rise in UK electricity prices. That is an important part of the rate of return. If providers give all that to their tenants, the amount that is left from the feed-in tariff to compensate for their financing costs will be less. However, we are not legally able to provide a separate tariff, because the Labour party did not implement such an arrangement when it was in government. I regret that, because it would have given us some flexibility.
Oral Answers to Questions
Debate between Caroline Flint and Chris Huhne(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Huhne
My hon. Friend is right. A key focus of the energy company obligation will be on householders who cannot achieve significant energy savings without an additional measure of support. That will include, through the affordable warmth target, specific assistance to the poorest and most vulnerable people to help them keep their homes warm affordably. We are consulting this autumn on secondary legislation for the green deal and the ECO, as I have said in answer to colleagues before, and we intend to launch them in autumn 2012.
Caroline Flint (Don Valley) (Lab)
I welcome the Government’s support for Labour’s motion yesterday, which said:
“with a cold winter forecast and Government support cut, millions of families will struggle to heat their homes”.—[Official Report, 19 October 2011; Vol. 533, c. 1006.]
I am glad that the Secretary of State agrees with that. What is he going to do about it this winter?
Chris Huhne
The right hon. Lady should be aware that under the warm home discount scheme—a statutory scheme, not a voluntary grace-and-favour one of the sort operated by the Labour Government—we will be providing substantial support to 600,000 particularly vulnerable key pensioners. That amounts to £120 off their bills, and is a two-thirds increase on what was available under the voluntary scheme operated by the previous Government.
Caroline Flint
I understand that the benefit of the warm home discount is less than the profits that the energy companies make. Yesterday, Government Members also supported our demand
“that energy companies use their profits to help reduce bills this winter.”—[Official Report, 19 October 2011; Vol. 533, c. 1007.]
How and when will the Secretary of State make that happen?
Chris Huhne
On Monday, at the energy summit, we discussed with the energy companies exactly how they could help, and there are a number of ways in which they are doing that. For example, they have made a voluntary commitment, which they will implement this winter, to state in every bill whether cheaper tariffs are available, to provide energy-saving advice and to promote the “check, switch, insulate to save” campaign, which I hope will—with the right hon. Lady’s backing, I am sure—be a great success.
Chris Huhne
Energy tariffs are a matter for Ofgem. It has put in place rules to prevent unfair price differentials such as those between different payment methods and has reported on the effectiveness of those changes. It has found that prepayment meter customers now pay on average about £20 less than standard credit customers for their gas and electricity. It has also found that direct debit customers now pay on average £70 less than others, which falls within the £88 indicative cost difference between providing direct debit accounts and other types of agreement.
Caroline Flint (Don Valley) (Lab)
The Labour Opposition day motion, which the Secretary of State supported yesterday, calls on the Government
“to investigate mis-selling and ensure consumers are compensated”.
He seems to believe that that can apply only to future mis-selling, but examples such as payment protection insurance and lawyers charging additional fees to coal health claimants prove that that is not the case. Will he back our demand for an urgent inquiry into mis-selling, with redress for those who have already suffered?
Chris Huhne
The clear advice that I have received is that, legally, we will have to legislate to ensure that redress is available for energy consumers—but I am happy to look at any evidence that the right hon. Lady has to the contrary, and if we can move further and faster, we will. However, our advice at present is that we will need new legislation, and it is a matter of great regret to me that the Labour Government did not implement that.
Energy Prices
Debate between Caroline Flint and Chris Huhne(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Caroline Flint
I will continue to expand on my theme a little, if I may, but I will be happy for the hon. Lady to intervene again if I have time.
If we want to get to the root of the problem, we must talk about reform, and our plans would provide immediate help for millions of families. First, we must deal with the sheer number and complexity of energy tariffs, which are extremely confusing and unfair. They hit loyal customers and penalise those who use less energy, and they really must be reformed. We propose a simple new tariff structure, which will be clearer and fairer and which will help all energy customers to get a better deal. It would work like a phone bill, with a daily standing charge and a cost per unit for the energy used.
Simplifying the pricing of energy would make it much easier for people to compare deals, work out which is the cheapest for them, and ditch the ones that are ripping them off. We need to get rid of expensive primary units and unregulated standing charges, so that people are no longer penalised for being low energy users, which is quite ridiculous. Instead of his “Check, switch, insulate” mantra, could the Secretary of State not try “Simple, honest, straightforward”? That might work better for customers.
What about redress? I understand that only two days ago, on breakfast TV, when asked about our proposal for a thorough investigation of past mis-selling and compensation for customers who have been ripped off, the Secretary of State suggested that that was not worth doing because it would delay other reforms. Labour Members will accept new protection measures as they are introduced, and we agreed that that should happen throughout Europe when we were in office. However—let me challenge the Secretary of State by repeating this—we are saying today that a full investigation into past mis-selling must be initiated, and that those who have been ripped off must be fully compensated.
The Secretary of State for Energy and Climate Change (Chris Huhne)
In fact, what I said was not worth doing was referring the matter to the Competition Commission, because of the delays that it would involve.
Caroline Flint
I am not sure whether that means that the Secretary of State now supports our demand for a full investigation and redress for consumers who have been ripped off.
Chris Huhne
I announced some weeks ago that we were considering redress for consumers. Moreover, we have said that it should not be just a question of a rap across the knuckles or indeed a fine, but that there should be a possibility of redress for consumers as well.
Caroline Flint
Obviously we will explore that in a little more detail, but I think it is clear that those who have mis-sold a package must pay back to people what they have lost through that, and must pay them compensation. It is clear that the fines are not working, because every time a consumer organisation conducts another survey, it finds more evidence of mis-selling. I think that this is quite straightforward, and I do not see why we need to go on talking about it. Let us just get on with it.
Chris Huhne
I am going to make a bit of progress before giving way again. The hon. Member for Angus (Mr Weir) has already intervened once, so he will have to wait until I have taken interventions from some of the other hon. Members.
This winter, energy bills will show customers how to save money, encouraging them to call their supplier and check online for savings. They will also have access to advice.
Caroline Flint
The Secretary of State makes much of the fact that people will be able to save if they switch. What about the people who cannot use direct debit? What about the people who have not got access to the internet or those who, even if they did, would find it difficult to navigate their way through?
Chris Huhne
The sort of people the right hon. Lady is talking about are the sort of people we are particularly targeting with our warm homes discount. I heard some of the interventions from Labour Members with mounting surprise, because one of the things that this Government have done, of which I am very proud, is to concentrate help on those most in need—those most vulnerable to rising fuel prices. Through the warm homes discount we have altered the previously voluntary arrangement. I say to Labour Members that their Government operated a purely voluntary arrangement with the big six, so cosy was the relationship between the big six and the right hon. Lady’s boss. It was a voluntary, grace and favour arrangement, whereby support was provided for the most vulnerable. We did not have any truck with that. We decided that we were going to legislate on this, which is exactly what we did. As a result, we will have a two thirds increase in the support made available for these social discounts compared with what was available under the previous Labour Government. So on the matter of fuel poverty, we have been doing exactly the right thing, which is to concentrate support where it is most needed and to make sure that that support is available.
Chris Huhne
I certainly will congratulate the hon. Lady’s local council and every council, of all parties, on that work. I hope that we can maintain a cross-party and consensual view on this. Many councils, some Liberal Democrat-led, some Conservative-led and some Labour-led, have been pioneers in this area, and I want to see them do more. Leading on that is really important for our constituents, and it is something to which I pay great tribute.
People can save money on bills, but they can also save by using less energy in the first place. Far too many UK homes are not properly insulated. Loft and cavity wall insulation can save more than £100—we are talking about very simple changes. The big six energy suppliers, which supply 99% of UK households, all offer free or cut-price insulation, yet many householders still have not taken up the offer. So from December, 4 million of the most vulnerable energy customers will receive letters to tell them they are eligible for free or heavily discounted insulation to their loft or cavity walls. Many of these people will not necessarily save energy because they are currently too cold and keep their bills down. By having that insulation, they will be able to increase their comfort, and that is a very good thing to get through an extremely tough winter. The right hon. Lady is absolutely right to say that one of the scandals in this country, which underpinned the work of the Hills fuel poverty review, is that 25,000 people die each winter because of the cold. We have to deal with that. As has been pointed out, it is a multiple of the number of people killed on the roads and it is a scandal that across this House—I am not going to cast further aspersions on the record of the previous Government—we have not tackled this issue with more vigour until now.
These letters will direct people to a dedicated independent helpline, as part of our programme to ensure an extra 3.5 million homes are properly insulated by the end of 2012. Next year we will also be rolling out the green deal to help even more households save money through energy efficiency.
We must also make sure that help is getting to those who need it most—the most vulnerable households. As I pointed out, discounts have risen very sharply under the coalition, and the extra support will be available this winter. We are requiring energy companies to provide help to about 2 million low-income households through the warm home discount.That is a discount of £120 for 600,000 of the poorest pensioners—substantially more than they have been getting until now. We are spending £110 million on heating and insulation for low-income and vulnerable households through Warm Front.
Caroline Flint
Is it not the case that only about one in 20 pensioners will benefit from the warm homes discount, whereas our social tariffs went to all vulnerable households? In addition, there are cuts of £100 in the winter fuel allowance for those over 80 and cuts for older people of £50. This all adds up when one takes into account the VAT increases and everything else that people have to pay the price for under this Government.
Chris Huhne
The right hon. Lady again makes a point about winter fuel payments which I should have picked her up on previously. She may not be aware of this, as she was not in the Department previously, but we have adopted precisely the policy of the previous Labour Government on winter fuel payments. We have left it completely unchanged. They increased winter fuel payments on a temporary basis and then proposed to bring them down, and we have kept exactly in line with that policy, so I am in no position to accept lectures on this matter from the Opposition as we are implementing the policy that they agreed.
Of course, cold weather payments will also be paid to households in areas with extended periods of very cold weather. Part of the green deal scheme will be designed specifically to provide affordable warmth to low-income, vulnerable households through heating and insulation measures. Those policies will make a difference this winter, next winter and every winter thereafter. However, we also need to take the right long-term decisions so that energy does not become unaffordable in future. We need to keep the lights on in the cheapest, cleanest way and to make sure that households get the best deal in the long term as well.
Chris Huhne
We will be bringing forward the consultation document on the green deal and the ECO subsidy shortly, and all those issues will be addressed. Clearly, we have to make sure that we are getting value for money on both the carbon reduction side and in reducing fuel poverty because they are both very important.
I want to make some remarks on carbon capture and storage, which was raised in Prime Minister’s questions. Despite the fact that all the parties have worked extremely hard on the first carbon capture and storage demonstration project at Longannet, we have not been able to reach a satisfactory deal, as the Prime Minister pointed out. We will not, therefore, be proceeding with the project. That decision is purely about the viability of that particular project and is not a reflection on our commitment to the CCS programme; indeed, hon. Members will have heard me commit us to that very clearly a moment ago.
The long-term need for CCS remains as strong as ever. We will continue working across Government to start a more streamlined selection process as soon as possible and £1 billion will be available, as it was allocated in the comprehensive spending review, for that new process. Over the coming weeks, we will ensure that the lessons from that first process are fully learned and we now know that commercial-scale CCS projects are technically viable and are likely to be financially achievable. We also know more about the best way to procure these first-of-a-kind projects. Our findings will be published and made freely available on the Department of Energy and Climate Change website to help to speed up deployment of CCS both here and abroad. We will study those lessons closely as we develop the forthcoming CCS road map setting out our vision for CCS deployment.
Caroline Flint
I thank the Secretary of State for referring to the situation with carbon capture and storage projects around the country. Will he explain to the House how the Government will look to use the great deal of work and research that have been done at the plant in Scotland to make sure that the endeavours, hard work and ingenuity there are not lost but are supported?
Chris Huhne
I am grateful for that question. It is absolutely right; we have learned an enormous amount from that. A lot of work has gone into the negotiations and a lot of good engineering work has been done with the front-end engineering and design studies. They will all be published, if they have not been already, and will be made available to everyone. We are absolutely confident, as a result of this process, that we are able to go ahead with the CCS project within that budget. Unfortunately, at Longannet the difficulties were specific to that project, including the length of the pipeline between Longannet and the reservoirs, as well as other issues concerning the rest of the plant such as its upgrading to comply with the large combustion plant directive. As a result of the knowledge that we have acquired in that negotiation and as a result of those feed studies, we are confident that we will be able to take a project forward.
Chris Huhne
Let me say clearly that one of the things we will do is attempt to align our deadlines on this with the European Commission’s new entrant reserve competition. One of the conditions of that competition is that the CCS plants have to be up and running and ready by 2016. That is in answer to the earlier question about the deadline. We do not foresee a slippage in deadlines.
There is money available from the European budget to support those projects. Money will be available. That £1 billion from the UK Treasury is secure. In addition, there may be help for running costs from the electricity market reform contracts for difference. With all those things we ought to be able to make sure that we get commercial-scale carbon capture and storage up and running. The projects that have been proposed to the Commission are a mixture of coal and gas. We want to make sure that we are doing both.
I hope the House will come away knowing that we are fully committed to the programme and the technology. What happened at Longannet is a disappointment. We would have liked it to go ahead if we could have done it within the affordability envelope that we had and if we had not hit those specific project problems there, but we will now go ahead elsewhere and we are confident that we will be able to get the commercial-scale CCS.
Our proposals to reform the electricity market—I have already mentioned contracts for difference—will deliver the best deal for Britain and for consumers because they will keep prices down and ensure that consumers are protected. We are working on giving Ofgem powers to force companies to give money back to consumers if the companies break the rules. That is the point about redress that the right hon. Lady mentioned.
Caroline Flint
Will that include customers who have already been victims of mis-selling or is the policy only for those who might be misled in the future?
Chris Huhne
The right hon. Lady knows that unfortunately it is a strong principle right across the House, and I am sure she will agree, that we should not have retrospective legislation. Legislation is for matters going forward. I agree that it would have been good if we had had legislation allowing for redress some years ago, but we have been in government only since the last election. For 13 years that was not done by the Labour Government.
Caroline Flint
At Prime Minister’s Question Time today the Prime Minister suggested that he supported the opening up of the energy market to a pool. Does that mean that the Government agree with the Labour Front-Bench team that the pool should be opened up in such a way that the big six should put all their energy into a pool for everybody to compete for?
Chris Huhne
I certainly agree. We have been talking to Ofgem about this and we have been talking with the big six. I found it a very interesting proposal from Scottish and Southern that it was prepared to trade a substantial amount of its electricity in the wholesale market. Scottish and Southern said 100%—of course, that is 100% of the spot market; it does not mean that Scottish and Southern is prepared to trade 100% of its electricity. The devil is in the detail. We have to make sure that the forward market is also liquid.
I am absolutely committed. I am not in favour of the Opposition’s proposal that we should refer these matters to the Competition Commission, because for two to five years that would put a freeze on the whole market. None of the big six would need to do anything at all. They would be able to put their prices up with impunity, they would be able to cut their investment, they would be able to pay more dividends to shareholders, and we would have an awful long time to wait before we had any real reform. The reality is that we think that we understand enough about what is not right in the market, at the retail end and the wholesale end, and are working very hard with Ofgem to ensure that it is put right, which is exactly what we will do.
Weightman Report (Fukushima)
Debate between Caroline Flint and Chris Huhne(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
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Chris Huhne
All I can say is that I am delighted; I could not expect anything less from the hon. Gentleman, who is a member of the Gorsedd of Bards: what he lacks in facts, he is able to make up for in poetry and rhetoric. Let me a deal with a couple of his key points.
I believe that the e-mail exchange reported in The Guardian, to which the hon. Gentleman drew attention and quoted, came from an official in the Department for Business, Innovation and Skills rather than from the Department of Energy and Climate Change. No, I do not approve at all of the tenor of those remarks; nor are they the tenor of the policy making we conduct in DECC. We are very clear that safety is absolutely the No. 1 concern. The hon. Gentleman will be aware that we made a clear provision in the coalition agreement that nuclear power could go ahead, providing that there is no public subsidy and providing investors are prepared to do that. That is exactly what is going on.
I think the hon. Gentleman misinterprets what Dr Weightman said about the issue of costs. The situation is exactly as I said. Dr Weightman could have looked at costs had he wanted to; the reality is that he, quite rightly as the chief nuclear inspector charged with safety, takes the view that safety comes first—regardless of the cost issues. That is why he has come up with a report that does not look into whether the measures he puts forward will or will not have excessive costs. That is for the potential operators to judge, not for Dr Weightman, and the operators will do so.
Let me end my response to the hon. Gentleman by pointing out that a published study, commissioned from Arup, available on the DECC website, puts the costs of nuclear at £71 per megawatt-hour in comparison with the lowest marginal cost at the moment, which would be a gas plant operating at £77 per megawatt-hour. Although he is absolutely right that stringent safety measures might add to costs, the other factor that needs to be taken into account is that precisely because some other countries have not gone through the same process as we have—of assessing the facts and attempting to base our policy on the evidence—they have pulled out of new nuclear construction. The result of that is that demand for new nuclear power stations has fallen. Normally, according to my basic economics, when demand falls and supply stays the same, the price goes down, not up.
Caroline Flint (Don Valley) (Lab)
I join the Secretary of State in thanking Dr Weightman for preparing the report, and thank the Secretary of State for allowing early sight of it.
The terrible events in Japan earlier this year reminded us that the Government must ensure that our regulatory regime in the nuclear industry is robust, and that there can be no compromises on safety. In that light, the Government were entirely right to ask the Office for Nuclear Regulation to examine the events in Japan and their implications for the United Kingdom.
I welcome the recommendations in today’s report, which will of course need to be closely examined, but given that the situation in Japan is clearly still ongoing, will the Secretary of State tell us what further monitoring he has planned? Will he also clarify two points? Can he confirm first that Dr Weightman was satisfied with the amount of time that he was given in which to prepare the report, and secondly that he had enough access to UK sites to inform his recommendations?
In our view, nothing in the report calls into question the importance of a continued role for nuclear power as part of a more sustainable future energy mix. Given the concern expressed in recent days about the Government’s commitment to tackling climate change, along with the worrying news of Scottish and Southern Energy’s decision to pull out of a nuclear project in Cumbria and speculation about the future of RWE’s nuclear programme in the UK, may I ask the Secretary of State what he is doing to ensure that the Government give investors the support and confidence that they need to deliver the construction of new capacity in the nuclear industry on time and on budget?
Chris Huhne
I congratulate the right hon. Lady on her first outing in her new role. She was right to say that the events in Japan are ongoing, but we feel—and Mike Weightman certainly feels—that the circumstances are clear enough to render it unlikely that any substantial new information will necessitate a change in the recommendations. However, one thing that emerges from the review is the fact that the culture of nuclear regulation in the UK is, appropriately, one of continuous improvement. If new facts come to light, we shall be able to take them on board and improve the regulatory environment.
Dr Weightman certainly feels that he was given enough time in which to complete the report, but had he wanted more time it would have been available to him. I was particularly pleased that his expertise—of which the right hon. Lady will know, as he was appointed by the last Government to inquire into the Potters Bar rail disaster—his independence and his impartiality were recognised by the international community when he was appointed by the International Atomic Energy Authority to conduct its review of the lessons of Fukushima. He has been running that operation in parallel with this.
I think we can be confident that we have an extremely solid piece of work here, and that the lessons are genuinely being learned. Dr Weightman—who is, after all, the chief nuclear inspector—had all the access that he needed not just to the reactors, but to all the UK sites. In this final report, he deals with some of the lessons that may emerge from the silo and pond issues at Sellafield. The ministerial team is seized of the need to deal with those important issues, and to make certain that no resource constraint prevents us from acting as quickly as possible to ensure the proper security of the sites.
The right hon. Lady asked about the speed of nuclear projects. Some delay will inevitably have been introduced into the process because of the lessons of Fukushima, but we are confident that all the key elements of the process that we, as a Government, need to undertake to get things going have been undertaken. We have produced national nuclear policy statements, discussions continue between the operators and the regulator on the generic design assessment, and we have put through the regulatory justification. I understand that, either today or yesterday, planning permission was requested for the first new reactor at Hinkley Point, which is due to be completed at the end of the decade. I believe that investors in nuclear power are content that we are moving as rapidly as we could expect to move.
Oral Answers to Questions
Debate between Caroline Flint and Chris Huhne(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Huhne
My hon. Friend is absolutely right to point to the increasing dangers of flash flooding in areas where, in some cases, there can actually be floods at the top of hills. Around the world over the past year there have been mudslides in China, floods in Pakistan and forest fires in Russia, and there is no doubt among the hard-nosed businesses that insure against risks that they have been attributable to climate change, which is a wake-up call. I am afraid that floods are a departmental matter for my colleague the Secretary of State for Environment, Food and Rural Affairs, but I am sure that she will take my hon. Friend’s points into account. I know that she is very aware of the dangers of flooding and the importance of flood defence.
Caroline Flint (Don Valley) (Lab)
I was encouraged to hear the warm words earlier about reducing our energy use, but when I contacted my energy supplier recently to acquire a smart meter, I was told that it was no longer supplying them. That was a change made following the election, brought about partly because of a lack of direction from the Government about support for smart metering. Will the Minister write to me about what representations or discussions the Government have had with energy companies about providing consumers with smart meters, and about how they intend to encourage them, so that we can take ownership of reducing our energy usage?