Charles Hendry
Main Page: Charles Hendry (Conservative - Wealden)(12 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Julian Smith (Skipton and Ripon) (Con)
12. What progress he is making on ensuring that off-grid households have access to affordable heating fuels in the winter of 2011-12.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
On Tuesday, the Office of Fair Trading published its study of the off-grid energy market, which found that action is needed to protect heating oil consumers in some areas. Ahead of next winter, the Department has been working with industry and consumer groups in a national campaign to encourage customers to order early and ensure they are well prepared for winter. We have also reminded terminal operators to ensure that they have sufficient salt to maintain access to their depots in the event of snow and ice over the coming winter.
Dr Coffey
I welcome the study published this week and the debate yesterday, when a lot of contributions were made on this matter. I encourage the Minister, though, to think about extending Ofgem’s protection to consumers so that they can all enjoy greater focus and access to the energy ombudsman.
Charles Hendry
As my hon. Friend will be aware, I extended an offer to her and other colleagues yesterday to meet me to talk about how we can take forward the work of the Office of Fair Trading to identify potential market abuses that still need to be dealt with, to see how the gas grid can be developed and to check that the appropriate regulation is in place.
Julian Smith
The OFT report this week risked letting a number of companies who behaved pretty badly last winter off the hook. Is the Minister not tempted to send some of these issues to the Competition Commission?
Charles Hendry
The OFT was very clear on this matter. It said that it was looking for guidance from outside input on whether there should be a Competition Commission referral. It has said that it will continue to look into cases of potential market abuse to ensure that consumers are protected.
Gordon Banks (Ochil and South Perthshire) (Lab)
The Domestic Bulk Liquefied Petroleum Gas Market Investigation (Metered Estates) Order of 2009—excuse me for giving its full title—from the Competition Commission has failed abjectly to increase the ability of metered estates using LPG to change. What is the Minister going to do about that?
Charles Hendry
The hon. Gentleman raises an important issue. One of the most complex areas to try to get a market to operate in involves entire estates metered by a single access point. I am happy to talk to him further, and to other colleagues who have concerns about this matter, to see whether there are ways to take the situation forward. I share his concerns that people living in such estates do not always get the protection to which we feel they are entitled.
Mr Russell Brown (Dumfries and Galloway) (Lab)
It is the affordability aspect of this matter that concerns me deeply. The OFT report clearly indicates that the experience people once had of getting cheap fuel in the summer months, especially heating oil, no longer exists. We need to look seriously at the affordability aspect, especially for low-income households that have never before been in fuel poverty but are now being driven into that category.
Charles Hendry
The hon. Gentleman makes a useful point. This summer, we have not seen the drop that one would expect. After a year that has seen unrest in the middle east, it is clear that wholesale prices are higher. It is therefore understandable that the drop has not been so great. We should not fall into a trap, however, of assuming that prices will not ramp up again in the busy period before Christmas and the cold winter. There is a real sense that consumers are ordering early to ensure that their tanks are as full as they can be at this point, because one thing about which we can be absolutely certain is that as we move towards winter, prices will go up further.
Mr Nigel Dodds (Belfast North) (DUP)
A significant number of my constituents are dependent on home heating oil to heat their homes. There have been severe price rises in recent months. Is there not a clear case for regulation in off-grid as well as on-grid energy? Will the Minister consider that urgently?
Charles Hendry
This issue is more acute in Northern Ireland than any other part of the country. Many more consumers are off-grid in Northern Ireland than elsewhere. This issue therefore has a particular resonance there. The OFT investigation established that 97% of consumers have access to at least four independent providers—“independent” being the critical word. The OFT is prepared to look again at examples of consumers not having access to a sufficient number of operators. In addition, where there is a potential takeover, the OFT will require it to be investigated if it appears to be uncompetitive.
Nigel Adams (Selby and Ainsty) (Con)
3. What mechanism his Department has put in place to learn lessons on the safety of coal mining following recent deaths of miners.
John Glen (Salisbury) (Con)
8. What plans he has to support investment by small and medium-sized enterprises in energy efficiency schemes.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
There are a number of Government policies that support small and medium-sized enterprises. The green deal, for example, will be available to SMEs when it is launched next year. It will enable them to improve the energy efficiency of their properties, thereby reducing carbon emissions and energy costs. The green deal will also drive demand for energy efficiency products and services, from which SMEs will be able to benefit.
Mary Macleod
Ormiston Wire in Isleworth has previously won the Queen’s award for sustainable development, and has a wealth of experience in wind turbines, solar panels and energy-efficient lighting. Will the Government ensure that SMEs such as Ormiston Wire are represented in the discussions on the green deal, to ensure that SMEs are given real support for any energy-efficient schemes?
Charles Hendry
I am delighted to hear from my hon. Friend of the steps that Ormiston Wire has taken; they are typical of the measures that many companies have taken. The green deal is a way of encouraging SMEs to put in place energy efficiency measures, and I am glad to see that they are taking advantage of that. The feed-in tariff regime will also encourage them to look at microgeneration.
Charles Hendry
One of the key aspects of the green deal is that companies will be able to seek an assessment and take it to any green deal provider. This will provide real consumer choice. We have found it most encouraging that providers have been coming forward and offering their services, because they see this as good for growth in the economy as well as for energy efficiency.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
But may I urge the Minister to press the Department for Business, Innovation and Skills to do more to engage with SMEs on the green deal. The experience of a small enterprise in my constituency is that officials have stopped talking to them and that BIS is going ahead instead with trials with large organisations such as B&Q. More joined-up working is needed.
Charles Hendry
I am intrigued to hear what the hon. Lady has said and I would be grateful if she gave us more information about it. We have regular contact and a very constructive relationship with BIS, which is looking at a finance aggregator to try to help SMEs to take advantage of the opportunities available within this package. The whole issue of financing is at the core of the work that BIS is doing. If the hon. Lady would like to give us more information, we could respond in more detail to her particular concerns.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
With growth flatlining and unemployment rising we urgently need a plan to get our economy growing. That means creating jobs, particularly for Britain’s 2 million small businesses. That is why we proposed amendments to what is now the Energy Act 2011 that would have boosted small business. We suggested lowering the cost of administration to give small businesses, along with charities, social enterprises and co-operatives, fair access to the green deal marketplace. Will the Minister tell us why the Government voted in Committee against supporting small British businesses, and will he commit today to backing our plans in secondary legislation?
Charles Hendry
We are absolutely committed to small and medium-sized companies having access to these issues and we are keen to find the best way of dealing with it. In that respect, we are committed to bringing forward further measures. As for the delays, the hon. Lady should be aware that we proposed a green deal, exactly as it is now, in the Energy Bill of 2010—almost two years ago—and it was voted down in principle and in concept by the then Labour Government, who have lost us nearly two years in rolling out energy efficiency.
Pauline Latham (Mid Derbyshire) (Con)
9. If he will take steps to simplify energy tariffs for consumers.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
One of the main aims of the Ofgem retail market review is to reduce tariff complexity, making bills easier to compare. I welcome these proposals and look forward to Ofgem’s forthcoming consultation on its plans to simplify tariffs and boost competition.
Pauline Latham
In the light of the news that fewer customers are now switching supplier, despite the proven benefits of doing so, I welcome the Government’s new “check, switch, insulate to save” scheme, but how will the Minister ensure that consumers, particularly the elderly who do not necessarily have access to computers or computer skills, take up the savings available?
Charles Hendry
My hon. Friend raises an important issue. After yesterday’s debate, I think the whole House will be entirely aware of my own inability to switch because of the complexity of the regime online. We have required the energy companies to write to 4 million vulnerable customers this winter so that they understand that they could be on a lower tariff and what more might be available to them in terms of energy efficiency and they get what help is currently available.
Albert Owen (Ynys Môn) (Lab)
We have heard a lot about last Monday’s summit. Will the Minister tell us whether the Government directly asked the big six companies whether they were prepared to freeze gas and electricity prices or indeed reduce them in the future?
Charles Hendry
The hon. Gentleman raises an interesting point. The important point about the summit was that the industry, consumer groups and the Government were working together. Most of the energy companies have already said that they will freeze the prices right through this coming winter and that there will be no further increases. What we have also looked at is what can be done right now. Sometimes the cynicism—not from the hon. Gentleman but from some of his colleagues—about the measures to check and insulate in order to get the best savings is unfortunate because it means that constituents who could be doing more to help themselves and take advantage of what is already on offer might be inclined not to do so.
Chris White (Warwick and Leamington) (Con)
11. What recent discussions he has had on reducing fuel poverty; and if he will make a statement.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Prime Minister and the Secretary of State chaired a summit with consumer groups on Monday to launch the “check, switch, insulate to save” campaign and a package of measures to help consumers this winter. We are working with consumer groups, energy suppliers and the regulator Ofgem to ensure that consumers know how to save money on their energy bills by checking on their energy deal, switching their supplier if appropriate and insulating their homes.
Mr Nuttall
I do not know whether the Minister has had a chance to read a recent book entitled “Let Them Eat Carbon”, by Matthew Sinclair of the TaxPayers Alliance, but if he has he will have noted Citigroup’s estimate that this country will have to spend more on meeting environmental targets than Germany, France, Spain and Italy put together. Does he accept that when those costs are passed on they will result in even higher energy bills for consumers?
Charles Hendry
I have serious doubts about the information in that book about the relative costs, particularly compared with countries such as Germany. We have to deal with a legacy of a failure of investment over the past 13 years. Every year of this decade, we will have to secure investment in our energy infrastructure at twice the rate secured in the previous decade, which will entail a cost to consumers, who are picking up the tab for Labour’s failures.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I remind the Minister that a leading expert on energy said only this week in the precincts of the House that the real reason for the astronomical energy price rises was the privatisation of the energy industry and the sweating of assets over many years? Is that not the truth? Is that not why we have rocketing energy costs and our European neighbours do not?
Charles Hendry
The hon. Gentleman makes some of the points that I was just making. The sweating of assets to which he referred resulted from the lack of investment over the past 13 years in the building of new plants. It is 15 years since the last nuclear plant was opened, 25 years since it was commissioned and 40 years since the last coal plant was opened. We have not seen enough investment in plant, and that is a legacy issue that is now being addressed. As a result of competition, we ended up with some of the cheapest electricity and gas prices in the whole of Europe, but we have to make up for that legacy of failure.
Laura Sandys (South Thanet) (Con)
I want to return to consumers and their costs. Will the Minister urge Ofgem to reconsider the unit as a specification? What does “a unit” mean? Could we not look at cost per bulb hour, and other things that consumers understand? That will drive behaviour change as well.
Charles Hendry
Let me say in response to your comment, Mr Speaker, that I like to see myself as a source of endless renewable energy. As for the point that my hon. Friend has rightly made, clarity is indeed a real issue. People are confused because they simply do not know what the term “unit” might refer to. I hope that Ofgem and the industry will try to establish what more can be done to ensure that it is absolutely clear how much energy people are using.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
14. What information Ministers in his Department gathered on the policies of other countries on maintaining the competitiveness of energy-intensive industries during recent visits to Europe.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
My hon. Friend the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), visited Germany last month to see at first hand how German policy on the competitiveness of energy-intensive industries is put into practice. My officials are also working with the Department for Business, Innovation and Skills and the Treasury to prepare a package of measures for the most affected energy-intensive businesses, which we plan to announce before the end of the year.
Mr Hunt
Does the Minister agree that the German experience shows that it is possible to adopt both a strong commitment to moving towards a low-carbon economy and a comprehensive range of measures that protect the competitiveness of energy-intensive sectors? Will he take steps to ensure that the mitigating strategies that the Government will announce this autumn benefit not just the larger companies, but smaller energy-intensive companies such as those in the ceramics sector, which can help to rebalance the economy?
Charles Hendry
Let me begin by thanking the hon. Gentleman for the work that he is doing in the all-party group that he leads. It is extremely valuable to the whole sector. There must be a balance between moving in a low-carbon direction and ensuring that successful businesses are not driven abroad, and the measures on which we are working with BIS and the Treasury are intended to strike that balance. If those companies simply moved overseas, we lost the jobs and they continued to emit carbon in the same way, there would be no net gain for the world climate—or, indeed, the UK economy.
Mark Pawsey (Rugby) (Con)
I am pleased that the Minister recognises the concerns of energy-intensive industries such as those involved in packaging manufacture and CEMEX, in my constituency, which manufactures cement. CEMEX faces a £20 million bill for complying with carbon legislation, which is causing concern about the viability of its UK plant. Will the Minister do all he can to ensure that UK manufacturing industry is not placed at a competitive disadvantage?
Charles Hendry
Let me reassure my hon. Friend that we regularly meet representatives of industry and industry groups to ensure that we understand the full range of concerns. The work currently being done across Government is designed to ensure that we first understand where the challenges and threats are coming from, and then introduce sensible measures to protect companies of important national and strategic interest. I think that that strikes the right balance, but we are always keen to receive representations from Members on both sides of the House about specific constituency issues.
Phil Wilson (Sedgefield) (Lab)
18. What plans he has to involve local authorities in meeting the UK's targets for reducing carbon emissions.
Julie Hilling (Bolton West) (Lab)
20. What plans he has to provide support for households in meeting the cost of energy bills.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I refer the hon. Lady to the answer that I gave my hon. Friend the Member for Bury North (Mr Nuttall) a few moments ago.
Julie Hilling
I thank the Minister for that answer, but I still do not understand what he is going to do to prevent people from dying this winter. Will he also urge the Government to reconsider the decision to cut the winter fuel allowance?
Charles Hendry
As the hon. Lady well knows, the winter fuel allowance was introduced by the last Government. Had it not been for the fact that—as one of her colleagues who was then a Minister pointed out—there was no money left, we might have been able to consider some of these matters further. However, we have implemented the policy of the last Labour Administration, and in the meantime we are trying to ensure that people check their bills for accuracy, insulate their homes, and look for better arrangements to which they might switch. That makes evident sense, because it can bring significant benefits, and it should not be dismissed, because it will help many of the hon. Lady’s constituents.
Tessa Munt (Wells) (LD)
What has been done for customers with prepayment meters and keys? Their bills are more expensive per unit, and as they are not sent a bill there are limited opportunities for the energy companies to communicate with them, and so little choice is offered to them.
Charles Hendry
There is evidence, which Ofgem is gathering, that people on prepayment meters are paying less now than they were in the past. One reason we have been keen to take forward the smart meter programme is to ensure that people get absolute accuracy in their billing. That programme is furthest advanced in Northern Ireland, and people on prepayment meters there pay less than people on normal tariffs.
Ian Lavery (Wansbeck) (Lab)
T1. If he will make a statement on his departmental responsibilities.
Joseph Johnson (Orpington) (Con)
As a London MP, I am often struck by the energy inefficiency of office buildings in the capital, whose lights blaze throughout the night, regardless of whether anybody is working in them. Will the Minister say what steps he is taking to tackle light pollution and the energy inefficiency of office buildings? In particular, is there a case to be made for mandatory movement-sensitive lighting systems?
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
My hon. Friend raises an extremely interesting issue. I have the sense sometimes that Canary Wharf would be visible from Mars at night, and there are some lessons that we need to learn. The Government are showing leadership on this: simply by using energy-saving measures we have cut our own emissions by 20% in DECC over the year, and all Government Departments have cut theirs by 10%. We need to involve people who work in such buildings so that we can get their ideas about the contribution they can make, because this is as much about human endeavour as the advances in technology.
Derek Twigg (Halton) (Lab)
An increasing number of my constituents are telling me that they are not just anxious but frightened about whether they will be able to pay their winter fuel bills. I ask the Minister not what the regulator or the companies has done but what specific representations the Minister or the Prime Minister made to the six big energy companies about keeping the cost of energy down or freezing it? If he cannot give me the details today, will he write to me and set that out?
Dr Alan Whitehead (Southampton, Test) (Lab)
Will the Minister urgently investigate the impediment that his Department is imposing on new entrants in the energy market by back-charging for levy obligations after a company has a certain number of customers in its roster? Will he make proposals to deal with that anomaly so that such entrants are not impeded?
Charles Hendry
The hon. Gentleman makes an important point, and I would be happy to discuss it further with him. We have lifted the threshold at which those obligations start from 50,000 customers to 250,000 customers, which will greatly assist smaller companies to get involved in the sector. If there are barriers about which he wants to talk further, we are keen to remove them and will be happy to engage with him in trying to assist such companies.
Julian Smith (Skipton and Ripon) (Con)
Will the Secretary of State give us an update on the decision-making process for the location of the green investment bank? Does he agree that the bid by Leeds, in Yorkshire, looks particularly attractive?
Nigel Adams (Selby and Ainsty) (Con)
Will the Minister update the House on the progress being made by the Government on the renewable heat incentive?
Charles Hendry
The renewable heat incentive, as my hon. Friend will be aware, is a world beater and a new approach on which we are very glad to lead. We have taken it forward for commercial industrial premises. There has been a challenge from the European Commission that we are in the process of sorting out, and we are finalising the details for the domestic sector because we recognise that it is an important way of encouraging people to consider alternative ways of heating their homes.
Caroline Lucas (Brighton, Pavilion) (Green)
Analysis commissioned by G20 Finance Ministers shows that applying a carbon price to international transport fuels will both reduce emissions and generate billions of pounds for climate finance for developing countries. What assessment has the Secretary of State made of that report, and what discussions is he having with ministerial colleagues about agreeing a UK position on it in advance of the Durban climate conference?
Thomas Docherty (Dunfermline and West Fife) (Lab)
Yesterday’s news on Longannet was obviously deeply disappointing to my constituents, and to the whole of Fife. Will the Secretary of State set out what assessment he has made of the medium-term future of the station, and will his Department work with me to secure a long-term future for it? Will he also confirm that despite the bluster and spin from the Scottish National party Government, not a single penny has been offered by Mr Salmond?
Charles Hendry
May I first thank the hon. Gentleman for the very constructive way in which he has engaged in this process and for the support that he has given to his constituents? I think that there is joint disappointment that it has not been possible to take that project forward. The longer-term future of the plant will now be a matter for the company, and that was always going to be one of the problems of a retrospective regime at an old plant with the upgrading costs that would have been necessary. I am delighted that he will engage with us as Ministers and with our officials on the best way of taking things forward, because we are completely committed to seeing carbon capture and storage developed, preferably in Scotland. As far as I am aware, not one penny of support was offered by the Scottish Government.
Andrew George (St Ives) (LD)
In respect of the Minister of State’s responses regarding the Office of Fair Trading’s inquiry into off-grid energy supplies, which identified the importance of a diversity of suppliers, does he accept that the nature of the contracts that have been entered into restricts the opportunities for those who are supplied, particularly where they are forced to have a container to hold the liquefied petroleum gas?
Charles Hendry
The Office of Fair Trading has indicated that it will look at further examples of market abuse and anti-competitive behaviour, and that it is looking for evidence to be submitted to it in order to take that work forward, so there will undoubtedly be areas of further work that needs to be done. Some of that may need to be referred to the Competition Commission, and I hope that my hon. Friend will make forceful representations to that effect.
Naomi Long (Belfast East) (Alliance)
The extraction of shale gas by hydraulic fracturing carries with it significant environmental risks. What assessment have the Government made of those risks, and what discussions have they had with their counterparts in the Northern Ireland Assembly about those?
Charles Hendry
Let me reassure the hon. Lady that any shale gas extraction has to abide by exactly the same environmental and regulatory restrictions as any other oil and gas developments. There has been only very limited interest, and there is only one drilling application at the moment, in Lancashire, with Cuadrilla. It has potential for the United Kingdom but the issues here are very different from those in the United States in terms of land ownership rights, which I think will impede its development here compared with the rate in the US. It has a potential role to play, but it will be done within very strict environmental constraints.