Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr William Bain (Glasgow North East) (Lab)
1. What steps he is taking to increase protection for consumers in the energy market.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
As the independent regulator of the gas and electricity markets, Ofgem’s primary duty is to protect consumers, and it has consulted on proposals to improve consumer protection and competition in its retail market review. The Government have consulted on new powers for Ofgem to compel energy companies to provide redress to consumers who have lost out because of a regulatory breach.
Mr Bain
According to the Government’s own figures, fuel poverty in England is set to rise by 400,000 this year. In Scotland, more than one in four people are in fuel poverty, in Wales the figure is one in three and in Northern Ireland it is nearly one in two, yet 5 million customers are still being overcharged by the big six energy companies. When will the Government take the strong action that is needed with those companies to ensure that over-75s are always put on the cheapest tariffs—a change that would help 6,299 people in my constituency and 4 million pensioners across the country?
Mr Davey
The Government have consulted on how we can change the measure of fuel poverty so that it is more exact and so that we can ensure that we tackle the worst fuel poverty. The previous Government could not even measure fuel poverty properly. As regards ensuring that the big companies give a fairer deal, Ofgem’s retail market review is considering everything from standards of contact to improving billing and tariff simplification. Those and other measures will help people.
Mr John Baron (Basildon and Billericay) (Con)
The Government have accepted the billing stakeholder group’s recommendation that information should be put on all energy bills, by this Christmas, detailing how much a customer could save if they were on that company’s cheapest standard direct debit tariff. Understandably, Ofgem cannot confirm whether it will implement that, so what will the Government do to raise the matter with the Prime Minister and the big six in any forthcoming deliberations?
Mr Davey
First, I thank the hon. Gentleman for all his work on this important issue. He has made a valuable contribution. We are raising the matter, because we take it very seriously. Ensuring that consumers have the right information so that they can switch to cheaper tariffs is very important.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
It is not just households that need better protection in the energy market. Small businesses are also consumers under pressure from soaring bills. In the debate on the Queen’s Speech on 16 May, my right hon. Friend the Member for Don Valley (Caroline Flint) asked the Secretary of State to end unfair roll-over contracts, stop small businesses being subject to six years of back-billing and ensure that energy companies act responsibly towards small firms that have fallen into difficulty. On that occasion, he was not able to give an answer. Now that he has had a chance to reflect on those issues, will he give an answer and indicate whether the Government are serious about Britain’s small businesses having support in the energy market if they are to help us to get out of recession?
Robert Halfon (Harlow) (Con)
Sixty-five Members of Parliament of all parties have signed a Back-Bench motion calling for an Office of Fair Trading inquiry into the uncompetitive role of oil companies in keeping prices high at the pump. Will my right hon. Friend put pressure on the OFT to carry out that inquiry?
Mr Davey
My hon. Friend will know that my right hon. Friend the Secretary of State for Transport and I have been looking into that issue, but as a former competition Minister in the Department for Business, Innovation and Skills I am clear that independent competition authorities are critical to effective competition policy. I would not want to be seen to be putting undue political pressure on a valuable independent institution.
Mrs Mary Glindon (North Tyneside) (Lab)
2. What assessment he has made of the potential effects on consumers of proposed changes to the Consumer Credit Act 1974 regarding early repayments and the green deal.
Andrew George (St Ives) (LD)
4. When he plans to announce the outcome of the renewables obligation banding review.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I plan to announce the outcome of the renewables obligation banding review very shortly.
Andrew George
To secure essential jobs and investment, the industry needs certainty, clarity and rational decisions based on evidence and not on emotion. That is especially true of wave energy in my constituency. Will the Secretary of State reassure the House that decisions will be clearly evidence-based?
Mr Davey
I pay tribute to my hon. Friend for his work on promoting renewable energy in his constituency and his county of Cornwall, particularly in respect of marine energy. I can reassure him that the Government will make decisions based on the evidence. We will crunch through the more than 4,000 responses we have had—an awful lot of evidence, including some substantial new evidence—and our decisions will reflect the evidence.
Caroline Lucas (Brighton, Pavilion) (Green)
Does the Secretary of State share my concern about the mooted 25% cut to onshore wind support? Does he agree that it would disastrous for wind? Does he also agree that the recent announcement of a £1 billion loan from the Department for Business, Innovation and Skills to Petrobas for deep-sea drilling in the south Atlantic completely undermines any progress on renewable energy?
Mr Davey
I congratulate the hon. Lady on asking three questions, but I will not anticipate the announcement that we will make shortly. We support onshore wind—we believe it is a cost-competitive renewable technology, and it has an important place in decarbonisation and in a secure energy supply.
Chris Heaton-Harris (Daventry) (Con)
As my right hon. Friend will know, if onshore wind is cost-competitive, it will not need support. If, as he has said in previous answers to me, of our 13GW target, 5GW have been built, 6GW are through the planning gate and 8GW are in planning in the summer of 2012, the level of subsidy is surely way too high.
Mr Davey
I have to disappoint my hon. Friend. The fact that we are supporting the industry is one reason why investment has come forward in large numbers. The 6GW that have been consented and the 6.5GW in the planning system would not necessarily go ahead if there were dramatic cuts in subsidies.
Caroline Flint (Don Valley) (Lab)
In the year in which the solar industry was undermined, there are fears that the Government are turning their fire on the cheapest form of clean energy—onshore wind power—by proposing a cut of 25%. In the words of one industry expert, that would “kill dead” new wind developments. Perhaps some Government Members would like that. The Secretary of State has briefed the press that he does not support such a cut—neither do the Opposition—so why does he not stand up to his Conservative colleagues who want to kill off the British wind industry?
Mr Davey
I have to disappoint the right hon. Lady, because my Conservative colleagues and I are working very closely on this matter. Both Government parties support decarbonisation and understand the critical role that renewables can play, whereas under Labour renewable investment did not occur and we had one of the worst records in Europe. She will have to be patient, but we will make the announcement, and it will be a very good announcement.
Caroline Flint
The mixed messages coming from Government Members have blighted policy in this area. Investors, who want to bring new jobs and industries to this country, are crying out for certainty and confidence, but I am afraid the Secretary of State just does not get that. The message from the Government seems to be that Britain is closed for green business, which is why Vestas has scrapped its plans for a factory in Kent and Siemens is warning that its plans for a new factory and port complex could be put at risk too. Before any more firms axe jobs in Britain, will he tell us today, before the House rises, that the Government will scrap the 25% cut and get behind British low-carbon jobs once and for all?
Mr Davey
Once again, the facts do not support the right hon. Lady’s case. There has been a large increase in investment in renewables in the past year, which has created more than 20,000 jobs, and confidence in the sector is actually extremely high. When we make our announcement, I believe we will see billions of pounds of investment coming forward.
Peter Aldous (Waveney) (Con)
5. What estimate he has made of the level of investment in generating capacity (a) under the existing renewables obligation and (b) in the future.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The renewables obligation has succeeded in providing support worth about £2 billion a year to renewable electricity in the UK. Industry announcements over the last financial year amounted to renewables investments totalling £6.9 billion, which potentially will support more than 20,800 jobs. We plan to publish details of the additional investment arising from the RO banding review shortly.
Peter Aldous
To maximise investment in the offshore renewables sector, it is important to provide investors with certainty on electricity market reform as soon as is possible. Will the Secretary of State confirm that progressing the draft energy Bill will be given the highest priority when the House returns and that he will take all other steps necessary to provide this certainty?
Mr Davey
My hon. Friend is absolutely right, and has been a champion of the offshore wind industry. I congratulate him on that. The draft energy Bill has been widely welcomed by many people in the offshore wind industry because they see that it contains the instruments needed. We are pressing ahead with the timetable in the White Paper that we published last July. I am grateful to the Energy and Climate Change Committee for how it has gone about is rapid pre-legislative scrutiny. We will look carefully at its report, and we hope to publish the full Bill in the autumn.
Mr David Hanson (Delyn) (Lab)
Will the Minister welcome the creation of more than 100 jobs at Mostyn docks in my constituency, based on the development at Gwynt y Môr offshore wind farm off the north Wales coast, which was supported by the previous Labour Government? Will he recognise that wind farms and wind generation are not just about cheap electricity but about economic development? Will he therefore heed what my right hon. Friend the Member for Don Valley (Caroline Flint) said about supporting the wind industry both onshore and offshore?
Mr Davey
I agree with the right hon. Gentleman. It is very good news that jobs are being created. The story of onshore, offshore, the renewables industry and our energy policies generally is to bring forward new investment and jobs. We are proud of that, and will continue with that support.
Kelvin Hopkins (Luton North) (Lab)
6. What steps he is taking to help households improve their energy efficiency.
Huw Irranca-Davies (Ogmore) (Lab)
20. What assessment he has made of the potential effects of the provisions of the draft Energy Bill on the competitiveness of the energy market.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The draft Energy Bill focuses on encouraging greater investment and competition in the energy market as we make the transition to a low carbon future. The provisions in the Bill are about removing barriers to entry and allowing all forms of low carbon generation to come forward and compete on a level playing field. In addition to the provisions in the draft Bill, Ofgem has consulted on liquidity proposals and the Government have issued a call for evidence regarding the availability of long-term contracts for independent generators.
Graeme Morrice
I thank the Minister for his answer. A report by the Institute for Public Policy Research, a respected think-tank, shows that if the energy market was more competitive, efficiency savings alone would knock £70 a year off the average energy bill. So why will the Government not get behind Labour’s plan to break up the dominance of the big six by requiring them to sell power into a pool? That would allow new businesses to enter the market, increase competition and drive down energy bills for families and businesses.
Mr Davey
Because Labour’s plan would not work. The critical factor for independent generators—the new competitors in the current and future markets—is liquidity in the futures market, not in the day-ahead market. Liquidity in the day-ahead market has increased significantly, and the pool proposal that the right hon. Member for Don Valley (Caroline Flint) has made would be about the day-ahead market. So we have already sorted that problem, and Ofgem is focusing on managing auctions for the futures markets, which is where the competition issue is.
Huw Irranca-Davies
Yet the Secretary of State knows that the whole sector of independent generators is sceptical about whether the necessary radical reforms are enshrined within the energy market reform as currently proposed. Does he think he will need to go further to have a more fundamental shake-up of the electricity market so that his vision of a genuinely competitive market for the interests of business and individual consumers will actually happen?
Mr Davey
The draft energy Bill is a fundamental shake-up of the electricity market, and it is widely recognised as such. That is why it has created such heated and interested debate. I have to say that I do not recognise the views the hon. Gentleman ascribes to independent generators. I have met groups of independent generators, and they welcome much of the Bill. They argued—and we listened—that more work needs to be done to ensure that finance is available, so we recently published a call for evidence to see whether we can make sure that the power purchase agreement market is as healthy as possible. That is another critical way in which we are trying to help competition.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
11. What steps he is taking to encourage biomass-based generation in appropriate and sustainable locations.
Julian Smith (Skipton and Ripon) (Con)
12. What recent discussions he has had on the subsidy received by wind farm operators.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Throughout the renewables obligation banding review and the comprehensive review of feed-in tariffs, I have had discussions with many stakeholders and with my officials and ministerial colleagues on subsidies for wind farm generators.
Julian Smith
The Coates family near Skipton were recently offered a bribe of £275,000 to put one wind turbine on their farm. They also received late-night bullying calls from the company, ConEnergieKontor. This behaviour is happening right across North Yorkshire. Does the Minister agree that the only way to fix it is drastically to cut the subsidy paid to these companies?
Mr Davey
I do not agree with my hon. Friend’s last point, but I would say that any bullying tactics by developers are completely unacceptable, and I join him in condemning them. The wind industry generally is committed to a good standard of community consultation and to providing community benefit. If my hon. Friend would like to send me the details of what he raised with me, I will take them up with RenewableUK. I do not believe such practices are widespread or that they are a consequence of renewable subsidies, but they are unacceptable.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
14. What assessment he has made of the report by the Royal Society and Royal Academy of Engineering on shale gas extraction in the UK.
Neil Carmichael (Stroud) (Con)
17. What assessment he has made of the likely implications for his Department’s energy policy on the green investment bank.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The UK green investment bank policy is one of a number of policies that together will support the Government’s green and growth objectives. The bank, funded with £3 billion over the three years to 2015, will tackle gaps in the financing of green infrastructure projects. It will operate to a “double bottom line” of both achieving green impact and making positive financial returns. The initial priority sectors for the bank are offshore wind, waste and recycling, energy from waste, non-domestic energy efficiency, and support for the green deal.
Neil Carmichael
Does the Secretary of State agree that the green investment bank is emblematic of the Government’s determination to promote economic growth, and does he recognise the importance of ensuring that small and medium-sized enterprises are part of that story?
Mr Davey
My hon. Friend is absolutely right: our energy infrastructure and climate change policies are very much part of our growth strategy, and are bringing forward serious investment. He is also right that SMEs play a critical role in this regard, particularly in respect of innovation and the supply chain that is developing in many of the new and existing markets that we are developing.
Joan Walley (Stoke-on-Trent North) (Lab)
How is the Secretary of State following up representations from ceramics companies in Stoke-on-Trent, who are intensive users of energy and who have an agenda for innovation and investment, and who very much want to have the support of the green investment bank for the work they do?
Mr Davey
As the hon. Lady will know, a Department for Business, Innovation and Skills and Department of Energy and Climate Change consultation that has now closed looked at policies to help such energy-intensive industries. My right hon. Friend the Business Secretary will introduce some of the proposals, and we hope they will cover a range of industries.
Graham Stringer (Blackley and Broughton) (Lab)
18. What steps he plans to take to reduce the cost of energy bills for consumers.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
My Department is taking a number of steps to help consumers with energy bills. Programmes such as the carbon emissions reduction target, Warm Front, the green deal and the energy company obligation are helping to make more homes energy-efficient. The warm home discount provides direct help—worth £1.1 billion until 2015—to cut bills for 2 million low-income and vulnerable households. The voluntary agreement announced by the Deputy Prime Minister means suppliers will ensure that all consumers have good information on their supplier’s best tariff.
Graham Stringer
Those measures are trivial compared with the amount of subsidy going into wind farms, which has the effect of making rich landowners filthy rich, and by 2020 will put £1,000 per head on consumers’ energy bills. When is the Secretary of State going to change those policies so the consumer benefits, rather than rich landowners?
Mr Davey
I am afraid that the hon. Gentleman has got his facts wrong. The support for renewable energy costs 6p a day per household, and in this financial year the warm home discount will result in 1 million of the poorest pensioners getting a discount of £130—so I have to say the hon. Gentleman is wrong.
Mr Mark Spencer (Sherwood) (Con)
19. How many solar panels were installed in the most recent month for which figures are available.
David Morris (Morecambe and Lunesdale) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Since my Department’s last Question Time we have published a draft Energy Bill for pre-legislative scrutiny, set out the next steps for the green deal, publishing the detailed plans and secondary legislation, and we have helped to broker an EU energy-efficiency directive. There is also decarbonising power generation, a new market for energy-efficiency and European leadership on international climate change—it is an ambitious agenda.
David Morris
I thank my right hon. Friend for that comprehensive answer. However, may I ask him what steps his Department is taking to ensure that Horizon Nuclear Power switches from its current owner, E.ON, to a new one with the minimum of disruption to nuclear build in Britain?
Mr Davey
My hon. Friend will know that, ultimately, this is a commercial decision for the owners of Horizon Nuclear Power—RWE and E.ON—but we have been working with them to facilitate investors coming forward to talk to them. We are very optimistic that we will see the Horizon project sold to another consortium and that new nuclear build will continue.
Caroline Flint (Don Valley) (Lab)
Since this Government came to power, we have seen: the chaotic mismanagement of cuts to solar power; delays to the green deal; delays to the borrowing powers of the green investment bank; cuts to the Warm Front scheme, with far fewer people getting a chance to avail themselves of that support, as my hon. Friends have said; and an Energy Bill that was laughed out of the room by the Select Committee. We have also heard in questions today that the assessments for that Bill are going to have to be further revised. This week, we also learned that the Department has underspent its budget by nearly £400 million. Nobody is against the efficient management of office budgets, but this is a ministerial team who fudge decisions, make the wrong choices, cannot keep to timetables and are incapable of managing the budget. Is this not another example of the omnishambles that is spreading through this Government like a virus?
Mr Davey
She says £400 million, but I am afraid that she needs to look at the facts, because the real figure for underspend is £266 million. That is still a large underspend, but I have to tell her that £177 million of that comes from higher energy trading income from the Nuclear Decommissioning Authority’s programme. So better performance by one of our non-departmental bodies is producing more money for the Treasury—I would have thought that she welcomed that.
Amber Rudd (Hastings and Rye) (Con)
T2. The residents of Hastings and Rye are looking forward to cheaper energy bills following the implementation of the green deal. What plans does the Minister have to make sure that residents of social housing also get the benefit of that? May I also invite him, as Minister and constituency neighbour, to come to Rye to share that information with AmicusHorizon?
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
T4. Since this rather miserable Government came to power, pensioners in my constituency have seen their energy bills rise by £200. If the Government insisted that the big energy companies put those pensioners aged over 75 on the cheapest possible tariff, 5,500 pensioners in my constituency would see their bills drop by £200. Is it not time that the Government stood up for senior citizens rather than the big energy companies?
Mr Davey
I have good news to cheer up the hon. Gentleman. Under the warm home discount, 1 million of the poorest pensioners will get £130 off their bills in this financial year. Under the voluntary agreement negotiated by my Department and announced by the Deputy Prime Minister in April, the big six will ensure that customers who are getting the warm home discount are informed that they can move to the cheapest tariff, if they are not already on it, which will augment the benefit from the discount.
Graeme Morrice (Livingston) (Lab)
T5. What steps is the Secretary of State taking to ensure that energy bill standing charges do not unfairly hit the fuel poor and other low-income consumers, especially pensioners?
Mr Davey
The hon. Gentleman will know that Ofgem is undertaking a retail market review that is considering standing charges. We expect its deliberations to be published in the autumn. Given that it is an independent regulator, I am sure that the hon. Gentleman will agree that I should not pre-judge its conclusions.
Tessa Munt (Wells) (LD)
Investing in a balanced mix of low-carbon energy projects has huge job creation potential. The CBI’s analysis has shown that the green economy currently supports 940,000 jobs, two thirds of which are outside London and the south-east. Does the Minister agree that that reveals how the green economy can support a balanced nationwide economic recovery?
Mr Davey
I strongly agree with my hon. Friend and pay tribute to the work she does in her constituency to promote energy efficiency and renewables. She mentions the CBI report and it is clear that the CBI’s director-general, John Cridland, is very supportive of the Energy Bill and our attempts to increase investment in energy infrastructure, which he sees as a key part of this Government’s growth policy.
Lilian Greenwood (Nottingham South) (Lab)
T6. Under Nottingham’s decent homes programme, more than 15,000 tonnes of carbon will be saved each year. Nottingham City Homes, the local arm’s length management organisation, can use decent homes funding to lever in additional benefits from the green deal’s energy company obligation, but that funding remains indicative for 2013 to 2015. What discussions has the Secretary of State had with the Department for Communities and Local Government on decent homes funding and will he join me in praising the environmental benefits achieved by Nottingham’s “Secure Warm Modern” programme?
Chris Heaton-Harris (Daventry) (Con)
The Department’s own figures suggest that, in 2009, 50,000 people were put into fuel poverty because of the wind element of renewable energy. Will the Secretary of State give up-to-date figures on that?
Mr Davey
I saw the press reports that made that allegation and I am afraid that I do not agree with them at all. The press article was trying to suggest that particular amounts of money that come from consumer bills to support the renewables industry was the top bit that would push people into fuel poverty. It was a very poor analysis and we completely reject it.
Graham Stringer (Blackley and Broughton) (Lab)
T7. The Minister failed to answer the question earlier about when shale gas would come on line, yet this source of energy would create real jobs and partially decarbonise the energy industry as well as lowering fuel bills. Why does he not get a move on?
Neil Carmichael (Stroud) (Con)
Does the Minister welcome the news that nearly a third of the 900,000 new jobs have come into the green economy, which is obviously underlined by the excellent news that Sharp is moving to this country from Germany?
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
There is real concern, especially among small innovative companies, that the Department’s smart meter programme, which should help reduce energy bills, is behind schedule, disorganised, has no technical standards to help small companies take part and is unco-ordinated with either the smart grid programme or spectrum release. Will the Minister provide some reassurances?
Mr Davey
As we said earlier, work is under way on this. Ofgem, through its retail market review, is looking at tariff simplification, which is important. As my hon. Friend will know, since becoming Secretary of State, I have been pushing the idea of collective switching and collective purchasing, and simpler bills will be a big facilitator for that.
Jessica Morden (Newport East) (Lab)
Like my hon. Friend the Member for Scunthorpe (Nic Dakin), I have concerns about what the Government are doing to maximise the use of UK steel in the low carbon economy and all the opportunities that that brings. I understand that the Minister’s answer was encouraging, but does he appreciate that we must get this right now, because the deteriorating market for steel is impacting on workers in my constituency today?
Peter Aldous (Waveney) (Con)
Following on from the CBI’s report, the New Anglia local enterprise partnership has just published its manifesto for promoting green growth over the next three years. Will the Secretary of State and his colleagues across Government work with the LEP to discuss how its manifesto can best be implemented?
Dr Alan Whitehead (Southampton, Test) (Lab)
Has the Minister spoken with the developers of large-scale wind farms who have difficulties because their development periods straddle the end of the renewables obligation and the start of—if they come to pass—contracts for difference? Does he consider that the end of the RO, if that is necessary, should be in 2020, rather than 2017, in order to accommodate those problems?