Fuel Poverty (Wales)

Simon Hart Excerpts

Tuesday 19th March 2013 Westminster Hall

[Nia Griffith]

That is a real inversion of priorities.

Many other companies are carrying out that practice. In fact, there are few that offer tariffs that do not involve a fixed standing charge. However, the one to which I am referring is particularly obnoxious, because a high proportion of the money that a low-income family ends up paying goes on just the standing charge.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I have a brief question arising from the previous intervention. Will the hon. Lady inform us whether the contracts that resulted in those big pay-offs were entered into under the previous Government?

[Nia Griffith]

I expect that the hon. Gentleman will answer his own question when he has the chance to speak later, but it is certainly not something that I am going to deal with now.

I want to get back to the families I have been dealing with and the people I see from day to day. I ask the Minister to examine very carefully the ways in which energy companies set their bills and to consider whether there is any way in which he can alleviate some of the desperate fuel poverty that we are seeing in our communities.

--- Later in debate ---

[Paul Flynn (Newport West) (Lab)]

I am reminded of a debate that took place when I was the Opposition spokesman on pensions—if hon. Members can remember that; it was in the dark age of Thatcherism—in which the then Minister suggested that elderly people should go to jumble sales and buy coats to put on, saying that they would get good value. That was only a few months after Edwina Currie suggested that the elderly should go to bed with bobble hats on—that was the then Government’s Dickensian approach. It was a happy occasion, because a group of Welsh MPs had the only fax machine in the House at that time, because faxes were suspect and not allowed—all that could be attached to a telephone line was a telephone. A group of officials came to inspect the installation of our wood-burning fax machine, which cost an enormous amount and was built like a steam engine. However, that meant that we could ensure that news of the Tories’ answer to fuel poverty—jumble sales—went out to the nation so that people would realise what it was.

I was struck by what the hon. Member for Montgomeryshire (Glyn Davies) said in his speech. I welcome the fact that he is acquiring the same reputation for wisdom and restraint as his predecessor in the House, and we look forward to further improvement. He drew attention to, but did not dwell on, the fact that fuel prices are crucial. Something extraordinary has happened, which nobody forecast: America has had a huge boost to its economy because it has low fuel prices, mainly as the result of fracking.

A new gas-fuelled power station recently opened in my constituency, the gas for which comes from Scandinavia. It is situated precisely on the confluence of the River Usk, through one window, and the River Severn, through the other window. Fuel comes all the way across to Wales, but twice a day a huge cliff of water comes up the Severn and down the Severn, and up the Usk and down the Usk, wasted and unused. The cheapest electricity in the world comes from the tidal power station at La Rance in Brittany, which has been going for 47 years. The capital costs were paid 27 years ago, so the fuel is of course free. The turbines are in pristine condition and it produces electricity regularly and cleanly from a non-carbon, eternal fuel source, and no one takes a cut. There is a similar, slightly bigger, power station in South Korea.

In Wales, the tides washing around our coast 24 hours a day are our North sea oil, but we neglect them. There are serious problems with the barrage—building a wall across the channel—because it is open to so many environmental objections and has a huge cost, but a very acceptable alternative, which would be equally rich in providing power, would be a series of turbines in the water, perhaps in lagoons, linked to a pump storage system such as the one in Dinorwig, meaning that when pulses of energy arrive at 3 am, we can store that, as with a large battery, for use later in the day. That is the cleanest, cheapest, most sophisticated and best way to produce energy.

We have heard about the dearest way to produce energy this afternoon, as we are going ahead with a nuclear power station. While it is not in Wales, a large part of Wales is within a radius from it that is the size of the uninhabitable area around Fukushima. What if there was a disaster? There have been tsunamis in the Severn channel—they were many years ago, but they have taken place. We did not get much information about that from the Secretary of State, who had said, when he was a Liberal Democrat, that nuclear power could come only through either a rigged market or a “vast”—his word—subsidy from the taxpayer, yet he has managed to get both in the proposal. The current negotiations started with a strike price of £50 per megawatt-hour, but The Times and The Daily Telegraph now tell us that the price being negotiated on is £97 per megawatt-hour—nearly double.

[Simon Hart]

One or two of my constituents who are watching the debate would be interested to know when the hon. Gentleman might make some points about fuel poverty as it affects constituents in Wales.

[Paul Flynn]

Fuel poverty is about the cost of the fuel. I am sure that there will be great cheers in the main Chamber tomorrow if we hear the expected announcement that the price of petrol and diesel will be frozen—[Interruption.] Hon. Members will be cheering and it will be welcomed. The consequence, however, is that fuel will be cheaper, so there will greater congestion, more pollution and more accidents. The more the price of fuel goes down, the more unnecessary journeys are made. We have less congestion now, fewer accidents and less pollution. Many people—almost half the population—are directly involved in that, but everyone is involved in paying for gas and electricity. They should be the first consideration, but there is no attempt to freeze those prices.

An extraordinary deal is on offer. We have seen fuel prices drop in the US. We are, however, in a position whereby Centrica, E.ON and RWE—all of them—have left the proposed deal, so the only people in the negotiations at the moment are Électricité de France, which has a €33 billion debt. If it was not nationalised, it would be bankrupt. It wishes to do a deal in the short term in which British taxpayers pay it £30 billion in subsidy. According to Tom Burke, an expert in nuclear power, the subsidy will be £150 billion over 35 years, and a Liberal Democrat spokesperson today suggested that it would be £99 billion. That is from a coalition that said that there would be no subsidy on nuclear power. We will be told the result only when it has been negotiated, but the deal will burden those in fuel poverty for 35 years. We are betting for that period. Who will benefit? Not British industry, but French industry, so the advantages will go there.

The Government seem to be hellbent on producing fuel that will be increasingly dear. Fuel poverty will not go away if we irresponsibly decide on the dearest means of producing energy in the world. If hon. Members want another example of that, they can look at the two other Électricité de France new nuclear power stations at Flamanville and in Finland. One is four years late and the other is six years late; one is €5 billion over budget and the other is €7 billion over budget. Who can suggest that the one at Hinkley Point is going to be any different? It will cause anxiety throughout the area, because every 10 years we have a nuclear disaster, and there is likely to be another one, either due to terrorism, an accident or—