Oral Answers to Questions

Debate between Ed Davey and Julie Elliott

Thursday 19th March 2015 Commons Chamber

[Mr Davey]

In answering my right hon. Friend’s question, may I pay tribute to him for the role he played in this boom, particularly in the renewable heat incentive? We have seen more than 25,000 domestic installations. I cannot give him the figure for non-domestic installations, but we are seeing a big increase. Now that this renewable heat scheme has really got going, the next Parliament will need to build on our success.

[Julie Elliott (Sunderland Central) (Lab)]

Every few months, the consultancy firm EY publishes its renewable energy attractiveness index. This month, the UK fell yet again. In November 2013, we were fourth in the world. In February 2014, we fell to fifth; in May 2014, to sixth; and in September 2014, to seventh. This month, the UK fell to eighth, which is a 12-year low. The Secretary of State’s sole solution to our broken energy market is telling people to switch. In order to reverse that appalling record, is it not time we switched to a Labour Government so that we can drive the investment, create the skilled jobs and produce the clean energy that our country needs to succeed?

[Mr Davey]

The hon. Lady has scored a massive own goal. She trailed us going down the attractiveness index for future investment, but she should realise that the closer we get to the election, the more worried investors are. Members do not have to believe me about the potential threat of a Labour Government to investment; they can believe the Secretary-General of the OECD, Angel Gurria, who said that Labour’s energy price freeze could bankrupt investors. That is why the index is going in the wrong direction. The hon. Lady might also want to know that that index was prepared as a snapshot before the recent successful contracts for difference auction, which saw 27 new renewable energy plant contracts issued. This Government are seeing huge investment. The only thing that can stop that investment is the election of a Labour Government.

Energy Supply Market

Oral Answers to Questions

Debate between Ed Davey and Julie Elliott

Thursday 5th February 2015 Commons Chamber

[Mr Davey]

My right hon. Friend is right. The evidence is clear, not just to everyone in this House, but to every voter: if we had implemented Labour’s proposal, people would be paying higher energy bills now.

[Julie Elliott (Sunderland Central) (Lab)]

This week, the consumer body Which? added to the growing body of evidence that energy companies do not pass on reductions in wholesale costs to their consumers. Which? confirmed that cuts to consumer bills should have been larger and made far sooner. Does the Secretary of State regret that he voted as recently as last month not to back Labour’s plan to give the energy regulator the power to cut energy prices when wholesale costs fall?

[Mr Davey]

This is a very important issue, and when I considered it last year, I looked at the record of a predecessor of mine as Secretary of State—now the Leader of the Opposition—when wholesale prices fell far faster and further. He did nothing. We have acted all the way. I agree with much of the analysis by Which?, especially on the need to work even harder to make our markets more competitive. The markets we inherited in 2010, with Labour’s big six, needed reform. We have undertaken that reform, and that is why the big six’s market share has fallen so significantly, and why we have backed, unlike Labour, a reference to the independent competition authority, so it can look at the energy market.

[Julie Elliott]

As usual, the Secretary of State did not answer the question. Will he explain why Ofgem estimated only last week that profit margins for the big energy companies are set to soar to £114 per household, citing expected future falls in wholesale costs as the reason for the increase? Is that what a functioning, competitive market looks like?

[Mr Davey]

Of course we all want to see falling prices, not increased profits, and that is one of the reasons why we are increasing competition. It is ironic that Labour is now quoting Ofgem—the regulator it introduced, tried to improve and now wants to abolish. The hon. Lady and her party must come behind our policy of increased competition, must start backing the Competition and Markets Authority reference, and should change their policy in the face of the evidence. They should say that they will abide by the recommendations of the CMA and will stop playing party politics with a very serious issue.

Oral Answers to Questions

Debate between Ed Davey and Julie Elliott

Thursday 6th November 2014 Commons Chamber

[Mr Davey]

I would be delighted to meet my right hon. Friend. One design issue in the green deal was ensuring strong consumer protection. I do not know whether his constituent went to the green deal ombudsman, but I am sure we can look at those issues in our meeting.

[Julie Elliott (Sunderland Central) (Lab)]

Last month, the Secretary of State for Environment, Food and Rural Affairs announced that solar farms would no longer be eligible for common agricultural policy payments, under the guise of ensuring that more agricultural land is dedicated to growing crops and food. The Government have since admitted that they have made no estimate of the potential annual reduction in energy capacity; that they have no idea how many solar farms include livestock grazing; and that they do not even know how much arable land has been taken out of production as a result of solar farms. They do not like onshore wind and they do not like solar, so will the Secretary of State tell us whether they support any clean energy?

Oral Answers to Questions

Debate between Ed Davey and Julie Elliott

Thursday 3rd April 2014 Commons Chamber

[Mr Davey]

I have to tell my hon. Friend that we are favouring other renewables. Offshore wind and other renewables get much higher strike prices. With regard to the spend from our low-carbon electricity budget, under the levy control framework they get more support because they are less mature technologies. As the technologies mature, we have been reducing support, whether for solar or onshore wind, in particular. Onshore wind is playing a vital role. It is the cheapest large-scale renewable technology, and I would not want to do anything to reduce its deployment.

[Julie Elliott (Sunderland Central) (Lab)]

That last answer was very interesting because

“Onshore wind is by far the cheapest large-scale renewable energy source that can be deployed at significant scale.”

Those are not my words, nor the words of the onshore wind industry, but those of the Department of Energy and Climate Change. Yet it was reported this week that the Prime Minister wants, in effect, a moratorium on onshore wind. What impact does the Secretary of State think such loose talk has on investment, and does he support the Prime Minister on this issue?

[Mr Davey]

The coalition’s policy is to continue to support the deployment of onshore wind. We already have 7.2 GW operational—a very big increase under this coalition—as well as 5.2 GW that have been consented and 6.5 GW in planning. We do not expect all that to come forward, but it does suggest that investors believe that Britain is a good place for onshore wind.

Oral Answers to Questions

Debate between Ed Davey and Julie Elliott

Thursday 16th January 2014 Commons Chamber

[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.

Oral Answers to Questions

Debate between Ed Davey and Julie Elliott

Thursday 28th November 2013 Commons Chamber

[Mr Davey]

I do not see it quite as my hon. Friend does. We were initially disappointed when the decision on the Atlantic array was announced, but when we learned that it was for technical reasons and that the further analysis of the seabed that was needed would have increased the cost, we understood why it had been taken. My hon. Friend should be reassured, because the number of applications that we have received for final investment decision-enabling contracts for difference—the “go early” CFDs—has far exceeded our expectations. I believe that there will be some good news on offshore wind shortly.

[Julie Elliott (Sunderland Central) (Lab)]

As has been said, RWE pulled the plug on the 240 turbine, 1.2 GW wind farm in the Bristol channel this week, saying that it was not the right time to invest, although I accept that it also cited some technical reasons. That is the pattern with this Government: investment has gone down from £7.2 billion in 2009 to a point where it is expected to be £1.9 billion this year. Nearly four of the five projects coming on line since 2010 were started under Labour. Does the Secretary of State accept that his refusal to adopt a 2030 power generation decarbonisation target now is scaring away investment, damaging green jobs and jeopardising our future energy security?

[Mr Davey]

That, of course, is absolutely not the case. If anything is damaging green jobs, it is the Leader of the Opposition and his irresponsible position on freezing energy prices. That has had a damaging effect on investment, and the right hon. Member for Don Valley (Caroline Flint) knows it. We have a very good record in this area, and I am looking forward to making more announcements of more investment.