Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Iain McKenzie (Inverclyde) (Lab)
3. What recent discussions he has had with power companies on their preparedness to deal with bad weather events.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Let me begin by saying that our thoughts and prayers are with the family and friends of Paul Goggins as we all celebrate his life and superb contribution on his funeral day.
I met the distribution network operators and key industry players on 8 January to discuss the power cuts over the Christmas period. I have organised a review of what worked and what did not, and I am due to receive a report before the end of March.
While there are clearly lessons to be learned, especially in regard to communications with customers, I want to record again my thanks to the thousands of people who worked so hard over their Christmases, mostly in difficult circumstances, to look after and reconnect those who were affected by severe storms and flooding.
Mr McKenzie
Who is responsible for ensuring that power companies are sufficiently prepared for bad weather, and have enough staff to be able to deal with both the weather and any power cuts that may result from it? Is that his Department‘s job, or is it Ofgem’s?
Mr Davey
As the hon. Gentleman will know, Ofgem regulates the distribution network operators to ensure that they perform adequately, but the whole industry does a huge amount of work—along with Ofgem and my Department—to ensure that proper preparations are made. Between 24 and 28 December, unprecedented severe weather affected all parts of the country, and it was not possible to make preparations that rely on mutual aid because all the distribution network operators needed their staff. We certainly have lessons to learn from that unprecedented set of events.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Our thoughts and prayers are with Paul Goggins and his family today.
In 2007, when we experienced severe surface water flooding, there was an audit of all the critical infrastructure, and a decision was made to move those who were most vulnerable to flooding to higher ground. Would another such audit be timely following the unprecedented flooding that occurred over the Christmas period?
Mr Davey
If an audit is recommended in the review that I have instigated, we will of course proceed with it. I must stress, however, that more than 750,000 homes lost power between 24 and 28 December, and 93% of them were reconnected within 24 hours. I do not, of course, underestimate the difficulties experienced by people whose Christmases were ruined and who lost power for more than 48 hours—15,000 houses were affected in that way—but I think that we should see them in proportion. The industry did a very good job, and its preparedness has greatly improved in recent years.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Paul Goggins used to sit next to me in the Chamber, and the difference between us when we used to make trouble on a Thursday was that he was nicer than me. He was a true Christian, whereas I am more the curmudgeonly type, but I am thinking of him today.
I worry about this question. I think that it should be seen in context. Is the new Minister for Portsmouth on side? Is he aware that flooding and the change in our weather patterns have something to do with climate change? Has he looked at the BP long-term survey of energy use, which was published this morning and which points to a very changed world market? That will also have an impact on our weather.
Mr Davey
I do not think the hon. Gentleman is curmudgeonly at all, and I welcome his question. I think it is important to think about whether events are connected to climate change. As he will know, climate change scientists are reluctant on this because the evidence does not suggest that particular weather events are connected with climate change, but the Intergovernmental Panel on Climate Change fifth annual report last year showed that there is increasing concern because both the theory and practice of climate change analysis suggests there are likely to be more severe weather events if we do not tackle it.
Andrew Jones (Harrogate and Knaresborough) (Con)
5. What steps he is taking to promote the exploration of UK shale gas resources.
Mrs Emma Lewell-Buck (South Shields) (Lab)
8. What steps he is taking to help households with their energy bills.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
We are very concerned about rising energy bills, so we are helping consumers in three ways: with direct help with money off their bills; with stronger competition; and through energy efficiency programmes. Last month, we secured an agreement with the energy companies for an average £50 cut off this year’s bill, and I am pleased to tell the House that my Department’s own work for greater competition for consumers will be enhanced following the appointment of Clive Maxwell, the current chief executive of the Office of Fair Trading.
Paul Farrelly
Frankly, the autumn statement was a great disappointment. Will the Government accept that they could do far more to help businesses and consumers who are facing crippling energy bills? The limited changes to green taxes are far too little, too late. Bills will still rise, and simply telling people to shop around is not a proper answer.
Mr Davey
I have to disagree with the hon. Gentleman. People are switching providers very effectively. In November last year, the month after the price rises were announced, 614,000 people used the benefits of the competition that we have enhanced to get better deals and save hundreds of pounds. When it comes to records on bills, the provisional 2013 gas and electricity figures have now been published and we can make a comparison between this Government’s record and that of the last Labour Government. Between 2000 and 2010—the last Parliament—gas bills rose by an average of 12% a year; in this Parliament, they have risen by an average of 6%.
Mrs Glindon
A new report by the Children’s Society says that about 5 million families are likely to turn down their heating because they cannot afford it, and children will suffer because their homes are simply too cold. Given that 3.6 million children last year thought that their homes were too cold in winter, does the Minister agree that it is now time for a price freeze to ensure that parents can keep their children warm during the cold winter months?
Mr Davey
No, I do not think it is time for a price freeze, because I do not think that will help the children the hon. Lady is talking about. We all know that Labour’s price freeze is a con and the energy companies will shove up the bills after the price freeze has ended. We want to give people permanent help, which is why the £50 average cut to people’s energy bills is welcome. In addition, we are ensuring that the warm home discount delivers £135 off bills for the most vulnerable people. That is a good record. We will be coming to the House later this year with our draft fuel poverty strategy, because we want to do more for the most vulnerable households in our society.
Mrs Lewell-Buck
A man in my constituency was recently arrested for stealing food. Upon escorting him home, the police found that not only did he have nothing to eat, but he had no heating or electricity at all in his home. He had turned to theft out of desperation. Why does the Minister not recognise that energy prices are a huge contributor to the cost-of-living crisis which is leading to such poverty and that this situation will only get worse until the Government adopt Labour’s energy price freeze?
Mr Davey
I do not know the case that the hon. Lady talks about, but the Government are as concerned as anybody about energy prices, energy bills and the impact on people around our country. That is why we have been hyperactive in this area; we have done far more than the previous Government. I mentioned the comparisons we can now make between energy bill rises under the previous Government and under this one. As I said, gas bills went up twice as much under the previous Government, but electricity bills increased by an average of 9% in the previous Parliament whereas in this one they have increased by 4%. We know that that still means bills are going up and we need to help people, but Labour’s record in this area was shocking.
Mr Philip Hollobone (Kettering) (Con)
If people are to be encouraged to switch supplier to cut their energy bills, we must make it as easy as possible for them to find an alternative supplier. One big barrier to that is utilities charging steep termination charges. Can the Department do anything to get rid of or reduce those charges?
Mr Davey
We certainly are looking at all aspects of switching to ensure that it is easier and quicker. Ofgem’s retail market review will make a big difference here and it is being implemented now, with simpler and clearer bills, and fewer tariffs. We are also working with the industry to reduce the time involved; I believe that before this Parliament finishes we will have halved the switching times, which will really help people such as my hon. Friend’s constituents.
Mr David Heath (Somerton and Frome) (LD)
The Secretary of State has been reminded by colleagues from all parts of the House this morning that this is not just about electricity and gas bills, low tariffs and dual fuel discounts; it is also about people in rural areas who cannot have any of those things because they rely on liquefied petroleum gas or fuel oil. I have long argued that the worst examples of fuel poverty are faced by people who are isolated in rural areas. Does he agree? Will he make them a priority in his new fuel poverty strategy?
Mr Davey
My hon. Friend has campaigned long and hard on this issue. It is clear that the House wants to bring it to our attention, and we are already working on it. As my colleagues have said, we need to address an issue of identification: getting good statistics and data, matching and so on. I can give an assurance that we will focus on this issue, and I invite right hon. and hon. Members to raise the matter with me and my Ministers, and bring forward ideas.
Christopher Pincher (Tamworth) (Con)
Our constituents are rightly concerned about energy prices. So does my right hon. Friend agree that it is irresponsible for any political party to attempt carbon tax changes to the Energy Act 2013 in the other place, which, had they been successful, would have added £125 to our consumers’ bills?
Mr Davey
I think my hon. Friend is referring to the one issue over which the Prime Minister said to the Liaison Committee there is a difference between the two coalition parties. The £125 figure that he quotes is from the Conservative party’s website. The figure from the Committee on Climate Change on the cost of the decarbonisation target is six times less. What that shows is that we need a debate on the decarbonisation target and what the actual costs will be.
Julie Elliott (Sunderland Central) (Lab)
The Secretary of State said last December that his Government would reduce the average household bill next year by £50, but three of the big six energy companies are not passing on the reduction to fixed-price tariff customers. Will he confirm that for some of those customers the measures he announced will not take a single penny off their energy bills?
Mr Davey
We negotiated a deal with the big six in which they agreed to deliver a £50 average bill reduction, and that is what we expect. We were clear at the time that it was an average bill reduction, because it is impossible to ensure that it goes to every single customer. Our analysis shows that they have largely complied already, and the House can be assured that we will not let up the pressure.
Julie Elliott
So that means there are customers who will not receive a single penny off their bills. Is it not a fact that average energy bills are still at least £60 more this winter than last winter? Why will the Secretary of State not admit that he and his Government are doing nothing to stop the big six energy companies raising prices?
Mr Davey
First, every customer will get something off their bills because of the rebate that we are putting through related to renewable and social costs, so it is not true that some people will not see any reduction. Furthermore, when the hon. Lady and her colleagues talk about the big six, they forget to mention that Labour created the big six. It was when Labour messed up the reforms of the energy markets in 2001 and abolished the pool in a bad way that we saw consolidation and the big six. We are now fixing that problem.
Tim Farron (Westmorland and Lonsdale) (LD)
9. What estimate he has made of the number of jobs that will be created in the renewables industry as a result of the provisions of the Energy Act 2013.
John Robertson (Glasgow North West) (Lab)
13. What steps he is taking to increase levels of competition in the wholesale energy market.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
There are two main initiatives to increase competition in the wholesale energy market led by Ofgem, which we have underpinned with new powers in the Energy Act 2013. First, Ofgem has worked with the industry to increase the amount of electricity traded in the “day ahead” market, with very encouraging progress. Over the past 12 months, over 50% of electricity has been sold on the day exchanges, compared with just 6% in 2010. Secondly, Ofgem’s new reforms—most notably, the market maker obligation—should be rolled out from 1 April 2014, which will force the big six to publish prices and require them to buy and sell electricity at those prices in the forward markets. That will increase liquidity, transparency and competition.
John Robertson
I thank the Secretary of State for that answer, but even he will agree that the biggest problem, particularly for the poorest in society, is cost. The energy companies that generate the power are getting 20% profit on generation, selling the electricity to themselves and then selling it on to customers in retail and getting anything between 4% and 6% profit. Surely that cannot be right. Is it not time we broke up the generation and retail sides of the business and stopped those companies dealing with themselves and undercutting the poorest members of society?
Mr Davey
I can agree with the hon. Gentleman on the cost issue and that we need reform in the wholesale market because of the vertically integrated model, but I have to remind him and Opposition Members that that model for the big six was created under the previous Government, and we are tackling the issue—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think that we have got the point.
Mr Davey
I am afraid that the hon. Gentleman was not listening. Ofgem’s proposals for the market maker obligation will have a big impact on the wholesale market. It will force the vertically integrated big six to tell competitors what they are prepared to charge and what they are prepared to pay for electricity in the forward markets. That will improve entrance, competition and transparency. The proposal of splitting the vertically integrated companies has real problems. It might work, but it could end up pushing up prices, which we do not want.
Mr Steve Reed (Croydon North) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Energy Bill received Royal Assent on 18 December and is now the Energy Act 2013. I have published the electricity market reform delivery plan, which sets out updated contract terms and strike prices alongside wider reforms to the electricity market that could unlock additional investments of about £40 billion in renewable electricity generation projects up to 2010. Renewables investment is increasing fast, with renewable electricity generation more than doubling since the coalition came to power. This is a clean, green record that we are proud of.
Mr Reed
Nearly 6,000 households are living in fuel poverty in Croydon North and, according to the Government’s own figures, the gap between their bills and what they can afford has grown to almost £500. Given that their energy bills will go up by another £60 this winter, does not this show why nothing less than a price freeze and action to stop these companies overcharging again afterwards will do?
Mr Davey
First, fuel poverty got worse under the previous Government and has been coming down under this Government; secondly, we are changing the way in which we measure fuel poverty so that we can better target the people in deepest fuel poverty; thirdly, the energy price freeze would be worse for consumers because prices would end up going up; and fourthly, later this year we will publish the first fuel poverty strategy for over a decade, and it will really address the problems that the hon. Gentleman has raised.
Mel Stride (Central Devon) (Con)
T2. The potential value of shale gas to our economy and to communities up and down our country is immense. Will my right hon. Friend therefore join me in congratulating the Government on having headed off the attempts by the European Union to regulate this sector? Does he agree that our success in heading off that attempt is very much due to the fact that we have among the safest regulation in this sector of any country in the world?
Mr Davey
I am grateful for my hon. Friend’s question, because I was very much involved in those discussions with the European Commission and European colleagues. The House needs to be clear that the European Commission is talking about something that we proposed—namely, publishing guidance about how existing European directives on things such as emissions, water and mining should apply to the new shale oil and gas industry. It is also worth noting that our regulations, which we have updated and ensured are fit for purpose, are the strongest in the world.
Ian Lucas (Wrexham) (Lab)
T3. When I met three businesses in Wrexham last Friday, they told me that the green deal was not working for them or for consumers. Will the Minister confirm that 99% of applications for the green deal do not proceed to completion?
Mrs Emma Lewell-Buck (South Shields) (Lab)
T4. Last year, the number of additional winter deaths in the north-east hit a 10-year high. Many vulnerable people living in my constituency would have benefited from having better insulated homes, but since the introduction of the Government’s energy company obligation the number of households having insulation installed has fallen by 90%. How does the Minister explain this shocking step backwards?
Mr Davey
We take the issue of winter deaths very seriously. If the hon. Lady looks at the numbers, she will see that, over a decade and a half or more, they have fluctuated. In fact, the largest amount of winter deaths we have known in the past decade and a half was under the previous Government. We need to have a sober, mature debate on how we tackle winter death, which is a very serious problem that needs to be dealt with through the health service, housing, and so on. The changes we made to ECO before Christmas are very good news for people in fuel poverty, because we have not only kept the amount of ECO that goes towards dealing with fuel poverty but extended it for two more years.
Mr Douglas Carswell (Clacton) (Con)
A number of homes in Clacton and Jaywick have been insulated under the “Insulating Jaywick” scheme using ECO funding, but I am told that the funding is no longer available, work has stopped and many local people who thought they had signed up to the scheme have been left rather disappointed. Will the Minister please meet me to discuss whether any funding may be available and from what source?
Tim Loughton (East Worthing and Shoreham) (Con)
Last week a constituent came to my surgery complaining of being bombarded with Government literature urging him to apply for the warm home discount and quoting the Secretary of State assuring the Select Committee that it was available to all pensioners, but, because my constituent is in sheltered accommodation and pays his energy bills via his housing association, he has been told that he does not qualify. Is the Secretary of State aware of this anomaly and is anything being done about it?
Paul Flynn (Newport West) (Lab)
T8. As Électricité de France has just agreed a strike price for nuclear-generated electricity in France of £38 per MWh, why have the Government agreed to pay nearly three times that price—£92 per MWh—to Électricité de France and guaranteed to index link that price for the next 35 years?
Mr Davey
I think the hon. Gentleman is referring to the statement by the chairman of INEOS, who claims he has made this particular arrangement. Clearly, we do not know the details of the contract, but I would be very interested to know them. I challenge INEOS: if it wants to sell cheap electricity to the UK, we would be very happy for it to come on to our markets. However, I do not think that this is a case of comparing apples with apples, as I am sure the hon. Gentleman is well aware.
Sir Nick Harvey (North Devon) (LD)
The offshore wind industry has seen some significant setbacks of late. What is the Government’s strategy now—are they effectively writing it off and looking to other renewable technologies to meet targets, or do they still want to exploit it, and if so, will they conduct a lessons-learned exercise?
Mr Davey
I can tell my hon. Friend that there is no need for a lessons-learned exercise, because the offshore wind industry is in very healthy form. Of course, one or two projects will not go ahead—that may be for geological reasons, such as the one off the north Devon coast—but that is nothing to do with our regime. Some offshore wind projects will not get contracts for difference, but that is because we are going for the best value-for-money projects.
The good news is that we have more installed offshore wind capacity in this country than in any other country. According to independent analysis, we are the best place to come and invest in offshore wind. When we announce those who have won the go-early CfDs in March, I am very confident that more offshore wind will come forward.
Ian Lavery (Wansbeck) (Lab)
The emission level of coal is roughly 820g of CO2 per kWh, and the emission level of natural gas is roughly 430g of CO2 per kWh. Will the Minister say what he expects the emission level of shale gas to be?
Charles Hendry (Wealden) (Con)
Will my right hon. Friend welcome the decision of Chevron this week to allocate at least 75% of the work for the Alder field development in the North sea to companies in the UK supply chain? Will he congratulate his officials in DECC’s office in Aberdeen on how they have worked tirelessly to achieve that outcome, which is a huge boost of confidence in the UK supply chain and will be worth many tens of millions of pounds?
Mr Davey
I am grateful to my hon. Friend for raising that issue. I will certainly congratulate my officials in the Aberdeen office, who do tremendous work both for the oil and gas industry directly and in helping the supply chain. The industrial strategy that my right hon. Friend the Secretary of State for Business, Innovation and Skills and I published last year has made a big difference in saying to those in the oil and gas supply chain that we want them to contract with British fabricators and other British companies.
Finally, I pay tribute to my hon. Friend for leading the all-party group set up under the industrial strategy to create better communications with the supply chain and to make it clear to international companies that they should consider using British companies as part of their projects.
Kerry McCarthy (Bristol East) (Lab)
As a Bristol MP, I have had many e-mails over the past few weeks about the use of Government subsidies to support building power stations to burn trees, such as the Helius Energy power station in Avonmouth. Will the Minister give me his assessment of the environmental impact of burning trees for power?
Mr Davey
The hon. Lady raises the issue of biomass. We are, indeed, trying to promote biomass in this country, but we have made sure that there is a cap on new dedicated biomass. We want to focus on coal stations that are converting to biomass, because that will mean a much better carbon gain. We have also published the strictest sustainability criteria for biomass in the world. We believe that biomass has a role to play in the transition to a green economy, but we realise that we need to take account of sustainability concerns as well.
Roger Williams (Brecon and Radnorshire) (LD)
This morning, a report was launched by the foundation industries, which are the core of our economy. Some of them, such as the steel, cement and glass industries, use enormous amounts of energy. They have made it clear that if they are to remain competitive, energy prices should not be out of kilter with those of their competitors. Will the Secretary of State work with his colleagues in the Department for Business, Innovation and Skills to ensure that these industries are attended to?