Energy Company Licence Revocation
Debate between Ed Davey and Huw Irranca-Davies(9 years, 7 months ago)
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Mr Davey
No, I am not saying that. If the hon. Gentleman waits for a second, I will put a lot of emphasis on tough regulation, but there needs to be a balance. There needs to be competition as well, because it can often work more quickly and more effectively, and it really hits the firms that are losing customers. Some of the big six have lost tens of thousands—in some cases, hundreds of thousands—of customers because we have enabled competition. I accept that things are not perfect yet, which is why we are working so hard.
Huw Irranca-Davies
The right hon. Gentleman is making a good point in that competition can drive improvement in a number of areas. But badly regulated competition leading to market failure is an issue not just with the big six but with potential new entrants, which could be doing well at the moment but they could fail or overstretch themselves. May I suggest to him that there is a straightforward analogy that any football or rugby supporter will understand? As rules are imposed on that game, players know that if they do something stupid, they will end up in the sin bin for 10 minutes on a rugby pitch. If they do it again, they will be off the field. If they do a spear tackle, they will be red-carded and could be banned for months. If they assault somebody on the field, they could end up in jail. We are not saying that these things should not be used. Companies will want to avoid them being used. The fact that they are there drives good behaviour.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I am sure that the hon. Gentleman intended to be brief.
Mr Davey
Obviously, I am grateful to my hon. Friend for his helpful comments. Smart meters have been well tested, and there is a lot of enthusiasm for them. One million have been rolled out, and consumers have embraced them. I was asked to quote Sir Bob Geldof at the launch of Smart Energy GB, but I do not think I will. I promised to give way to other hon. Members.
Huw Irranca-Davies
The right hon. Gentleman has been very courteous in giving way. I suggest to him that he does not close his mind entirely to our proposal because what he has described in some detail is, in effect, a series of yellow cards, following which there is no red card—there is nothing more serious. It is like saying to a player each time, “You have committed a misdemeanour, and now we will wipe the record clean.” The result of that would be appalling behaviour, and that is what we are seeing in some parts of the energy sector. I ask the right hon. Gentleman to keep an open mind because we want an escalation that is clear to energy companies, to consumers and to the investor community.
Mr Davey
I am grateful to the hon. Gentleman for his measured comments. The process in the law that I have described does end in a red card, and I hope that when he and the right hon. Member for Don Valley look at it in more detail, they will see that it can result in a red card. I said that I would give way to the hon. Member for Bolton South East (Yasmin Qureshi).
Cost of Living: Energy and Housing
Debate between Ed Davey and Huw Irranca-Davies(9 years, 10 months ago)
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The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Yesterday’s Gracious Speech marks another step in this coalition’s work to secure Britain’s economic recovery. With the infrastructure Bill, the small business Bill and the Childcare Payments Bill, this Queen’s Speech continues the central purpose of this coalition—not just to rebuild the shattered economy we inherited, but to promote a new economy with sustainable growth and employment for all, so the British people can enjoy a stronger economy and a fairer society.
The coalition’s long-term economic plan is all about raising living standards for everyone in our country, but to do that we have to tackle the country’s economic problems head-on. We cannot duck the difficult decisions even when they come at a political price. To do the right thing for our country in the appalling circumstances in which we found ourselves in 2010 was always going to take courage and I am genuinely proud to serve a Deputy Prime Minister and a Prime Minister who have both had that courage even though both have experienced difficulties in our respective parties as a result. Let us look at where their courage has taken our country.
Our economy is growing again; indeed, no other major economy grew faster in the last year. Our deficit is falling steadily, responsibly—not as fast as some people argued for, but at a pace that has kept interest rates low and enabled employment to rise. There is nothing of which my colleagues and I are more proud than this coalition’s record on jobs: unemployment down in the last year alone by over 300,000 and employment up at record levels, increasing by over 720,000 last year alone.
Huw Irranca-Davies (Ogmore) (Lab)
I thank the right hon. Gentleman for giving way so early in what sounded like his peroration. Will he comment on the UK’s decline in stature in terms of the renewables industry, which has come out in recent reports, and also on the speculation that numerous applications for onshore wind energy have been declined by the Secretary of State for Communities and Local Government? Can the Energy Secretary tell us how many have been declined against official advice?
Mr Davey
Renewable electricity has more than doubled under this Government. The situation we inherited from the last Government was that we were at the bottom of the European league—no, I should correct the record: we were above Malta and Luxembourg—but now our position has improved significantly. I would have thought the hon. Gentleman would have welcomed that. We have put in place an excellent regime for investment in renewables and all low-carbons. The Ernst and Young report he refers to shows us to be the best place in the world to invest in offshore wind and tidal energy, and my right hon. Friend the Secretary of State for Communities and Local Government Secretary and I are very proud of the fact that we have increased onshore wind so substantially and that there is such a healthy pipeline of future investment in it.
Oral Answers to Questions
Debate between Ed Davey and Huw Irranca-Davies(10 years, 2 months ago)
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Huw Irranca-Davies (Ogmore) (Lab)
10. What steps he is taking to help households with their energy bills.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Energy bills are a real concern, so we are helping households with them in three ways: direct financial help, energy efficiency measures and increased competition. Direct financial help includes the warm home discount, the winter fuel allowance and cold weather payments. Energy efficiency measures are delivered in a variety of ways, but especially through the energy company obligation and the green deal. Our relentless focus on increasing competition ranges from Ofgem’s retail market review to our focus on new suppliers and making switching quicker and easier.
Huw Irranca-Davies
In July 2012, off-grid fuel was selling for as low as 56p per litre, but by December the price was as much as 65p per litre, so a pensioner couple with an average 1,800-litre tank of oil in their garden could have saved £150 if they had bought in July. To put it another way: their winter fuel payment was half wiped out by December. Will the Secretary of State bring forward early payment of winter fuel payments for pensioners on off-grid energy?
Mr Davey
We have been working extremely hard and the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon) in particular has been leading the work to promote the “buy early” campaign so that consumers can buy oil when it is available at a lower price. Moreover, we have a six-monthly round-table with the industry to make sure we are doing everything we can.
The hon. Gentleman asked about winter fuel payments and he will know that they are a matter for the Secretary of State for Work and Pensions. We are working with the Department for Work and Pensions and other Departments on the fuel poverty strategy, and that issue and others will be dealt with as part of those discussions.
Energy Bills
Debate between Ed Davey and Huw Irranca-Davies(10 years, 4 months ago)
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Mr Davey
It is worth pointing out to the hon. Gentleman, first, that disconnections are at an historical low and, secondly, that he is wrong about the impact of the statement for the fuel-poor. It is actually very good news for the fuel-poor: not only are we maintaining the programmes as previously planned, but we are extending them for two additional years, which one would have thought the Labour party would welcome.
Huw Irranca-Davies (Ogmore) (Lab)
On energy efficiency, we know that contractors who sometimes literally bet their house on green deal installations have tragically been let down by this Government, with only just over 200 out of an anticipated 10,000. Precisely how many fewer solid wall external cladding insulations will there be next year because of the reforms that the Secretary of State has announced today?
Mr Davey
First, the hon. Gentleman is wrong about the green deal; he was referring to green deal finance plans. He talked about insulations, but an awful lot more have gone on because of the green deal, with the success of green deal assessments—more than 100,000 of them—even though they have not necessarily been financed by a green deal finance plan, so he is completely wrong.
One thing we have done to reassure the industry is to have a minimum of 25,000 solid wall insulations a year for the next four years. I hope and believe that there will be a lot more than that, but that will give the industry the reassurance and confidence that I think it needs.
Cost of Living
Debate between Ed Davey and Huw Irranca-Davies
Mr Davey
My hon. Friend is absolutely right. It is worth reflecting on the Government’s record on jobs. The Opposition do not like to talk about it, but the truth is that, despite the difficult circumstances—despite the Government having no money because we must pay down the deficit, and despite not having the growth that we would like in the world, European or UK economies—we have created jobs. That is a very good record.
Huw Irranca-Davies (Ogmore) (Lab)
Against the glowing backdrop that the Secretary of State paints, why do I now have a food bank in every single village in my constituency when there was only one three years ago? Why has there been a quadrupling of food banks under this Government? His record cannot be that good, given the backdrop of the inexorable rise of food poverty.
Mr Davey
People who run food banks are doing an extremely good job and deserve credit for their work. However, it is completely wrong to suggest that there is a statistical link between the Government’s benefit reforms and the provision of food banks. It is good that people are helping others. I hope the hon. Gentleman supports that.
I wish to make progress and to talk about energy and climate change policy. My Department has three major objectives. The Department wants to ensure that energy is as affordable as possible for consumers and business; that we keep the lights on with energy security; and that we decarbonise the power sector. With the Energy Bill, the green deal and many other policies, we have the most coherent energy and climate change policy of any Government in Europe—and indeed of any Government in this country for many, many years. Our approach also tries to maximise the jobs and growth potential from our energy and climate change policies. We also try to ensure that the impact on the bills of consumers and businesses is as low as possible, and we have policies to try to meet the climate change challenge.
Mr Davey
I am sure my hon. Friend is right. In a previous incarnation, I was Minister with responsibility for competition and was extremely keen to make sure that the UK had the most robust and rigorous competition regime in the world. The changes going through this House have delivered on that. I am not an expert on every single utility sector, so I will be careful about making any particular points about the water industry, or any other industry, but I am sure he is right that competition has an important role to play.
The impact of our climate change and energy policies has been to reduce household bills by 5%. By 2020, bills will be 11% less than they otherwise would have been. We know, of course, that energy prices are going up globally, but we have the policies to try to cushion people. As a result, people will pay lower bills than they otherwise would have done.
Huw Irranca-Davies
I thank the right hon. Gentleman for giving way, and I will not abuse his graciousness any more. Against that backdrop, why is it that independent analysis from the Fuel Poverty Advisory Group shows that an additional 300,000 people went into fuel poverty last year, and the Hills review suggests that 200,000 will be driven further into fuel poverty in the next four years? Against the glowing backdrop he has set out, why is that happening?
Mr Davey
I agree with the hon. Gentleman that fuel poverty is a real problem. [Interruption.] Opposition Members, from a sedentary position, say that the number of those facing fuel poverty is going up. Indeed, with global gas prices going up we have a challenge to keep bearing down on fuel poverty, but we are completely committed to doing that. Later this year we will produce a fuel poverty strategy, the first to be produced for more than a dozen years. One reason why he can quote the Hills review is that the Government commissioned that review to look into the exact nature of fuel poverty to ensure that it is being measured correctly. It shows that the previous Government could not even measure fuel poverty correctly. We will ensure that we measure it correctly, so that our policies can be targeted far more effectively to help the fuel poor. Opposition Members are not the only people in this House who are compassionate about the fuel poor.
It is important that we are concerned about the high cost of energy for all businesses, and energy-intensive industries in particular. That has to come through greater energy efficiency and we have a number of programmes to deliver that. There also has to be compensation and extra help for energy-intensive industries. I am grateful for the work and co-operation of the Treasury and the Department for Business, Innovation and Skills to ensure that we have a package to address the problem, particularly for energy-intensive industries. We have not had one before.
Energy Bill
Debate between Ed Davey and Huw Irranca-Davies(11 years, 4 months ago)
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Mr Davey
I shall make some progress first, and then I shall take some more interventions.
I pay tribute to the many people who have contributed to producing a Bill which, let’s face it, could not be described as having been rushed. Even before the pre-legislative scrutiny so ably undertaken by the Select Committee on Energy and Climate Change—I thank it for its work—it was long, long in the consultation. Some have even argued that the fingerprints of the Leader of the Opposition can be found on the first designs for it, but in the event of a paternity test, I think that the name of my right hon. Friend the Member for Eastleigh (Chris Huhne) would probably end up on the birth certificate. Its careful nurturing owes much to my hon. Friend the Member for Wealden (Charles Hendry). Indeed, Members in all parts of the House have played a role in its production, and it is a better Bill for that level of cross-party development and scrutiny.
The reason why members of all parties recognise the need for a major change is easy to explain. First, about a fifth of Britain’s existing power plants are scheduled to close during this decade, which will reduce supply. Secondly, even if we are heroically successful in terms of energy efficiency and reducing energy waste, overall demand for electricity is set to rise—partly because of population growth, but also because our transport system is likely to be more electrified over the next two decades, as are our heating systems. What with supply falling and demand increasing, we would have a real energy problem if we sat back and did nothing. Energy security—keeping the lights on—is a critical rationale for the Bill.
Huw Irranca-Davies
May I make a point about the reasoned amendment? It is because of the go-ahead for licences for a new fleet of combined cycle gas turbine power stations, the potential for shale gas, and the current absence of the development of carbon capture and storage technology in this country that it is necessary to top up with a 2030 decarbonisation target. I think the Secretary of State is more than sympathetic to that idea, and that he would implement it if he were not encumbered by Cabinet colleagues.
Mr Davey
I am grateful for the hon. Gentleman’s intervention. He has merely convinced me more that this will be a hot topic of debate. However, I can confirm to him and the House that one of the purposes of the Bill is to decarbonise our electricity supply. That is a critical purpose. We need to move from coal to gas, from fossil fuels to low carbon. We need a more diversified energy mix, with renewables, carbon capture and storage, and new nuclear all playing their part in enhancing the security of our electricity supplies. Low-carbon energy security will help to insulate consumers from fossil fuel price spikes and will help us to meet our climate obligations, including our emissions and renewables target.
The key challenge that prompted the Bill was the need to attract tens of billions of pounds of investment, including investment in low carbon, while keeping energy bills affordable. Given that global gas prices had almost doubled since 2007, which was already putting huge upward pressure on bills, the need to stimulate that essential energy investment as cheaply as possible became a central consideration. Whatever the many debates in which we will rightly engage today and during the Bill’s passage, let no one lose sight of the three core challenges that it was designed to meet: attracting more than £100 billion of investment, creating the world’s first ever market in low-carbon energy, and helping people and businesses around our country who were struggling in the face of rising world energy prices. I think that those aims are widely shared across the House.
Energy Market Reform
Debate between Ed Davey and Huw Irranca-Davies(11 years, 6 months ago)
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Huw Irranca-Davies (Ogmore) (Lab)
I thank the Secretary of State for giving way so early in his contribution. We face the start of a cold snap at the end of this week, and it seems that we are getting into the cold spell of the year. Will he consider, if not legislating immediately, at least calling in the big six and the other energy providers to encourage them, instruct them and demand that they provide the lowest-cost tariff to the over-75s? We know that the older someone is, the more vulnerable they will be to cold snaps this winter, not just next winter.
Mr Davey
The hon. Gentleman may or may not be aware that two or three months into my time as Secretary of State, I secured a voluntary agreement with the big six. I negotiated it and the Deputy Prime Minister announced it in April. The agreement was clear, and the big six are delivering on the promise that they made to us, namely that they will inform people of the lowest tariff available to them. That was part of a range of policies that we have agreed with them. For example, there is the warm home discount, which is often forgotten in this debate. We legislated for that discount to ensure that £130 will go straight off the bills of the poorest pensioners and the poorest people in our society next year. That will get money to the people who really need it and help them with their energy bills.
Oral Answers to Questions
Debate between Ed Davey and Huw Irranca-Davies
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.
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?
Jobs and Growth in a Low-carbon Economy
Debate between Ed Davey and Huw Irranca-Davies
Mr Davey
I certainly do not recognise that description of this Government. It has been commented in one or two places in the press that the one thing to which I have been most committed throughout my political life is environmentalism—my first political activity was in the environmental movement. I can therefore tell the right hon. Lady of my complete commitment to that agenda.
The motion contains some good points. Cross-party support, for example, for the Climate Change Act 2008 makes the UK an attractive place to do clean-energy business—the right hon. Member for Don Valley was gracious enough to admit that the coalition parties supported the Act, which is important. A consensus on many such issues, whether energy infrastructure investment or climate change, is extremely important, because they are about investors investing over decades. If we are to hit our 2050 target, we need to give those investors and the wider economy a lot of confidence.
Huw Irranca-Davies (Ogmore) (Lab)
I welcome the Secretary of State to his post, in which he has the opportunity to set a new course for the Government. May I suggest constructively that, first, he needs to give certainty to green investors, big and small? The Government have shaken that certainty—he should not listen to his officials. Secondly, he needs to avoid carbon leakage from existing energy-intensive users, whose confidence his predecessor managed to shake. If he can deal with those two things, which have gone deeply downhill in the past two years, he will do this country, green jobs and the green economy a service, in both steel and wind.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. There seems to be a lot of wind in these long interventions from both sides. Can we have shorter interventions? I should say to Front Benchers, and let Back Benchers know, that it looks like we will have to introduce a limit of six minutes because of the amount of time that has been taken.