Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
1. What steps he is taking to help households improve their energy efficiency.
Chris Williamson (Derby North) (Lab)
4. What steps he is taking to help households improve their energy efficiency.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The thoughts of the House will obviously be elsewhere today, in remembering our late colleague Paul Goggins, on the day of his funeral, and I associate myself and my colleagues with the many tributes that have already been paid across the House.
The coalition is committed to transforming the energy efficiency of Britain’s homes and helping consumers control their energy bills. The green deal and energy company obligation have together improved over a third of a million homes in their first 10 months of operation, but even more importantly we have established the conditions to grow a genuinely economically sustainable energy efficiency market as part of our long-term plan to transform British homes.
Tom Blenkinsop
I, like everyone in the House, would like to associate myself with the Minister’s comments about Paul Goggins.
The Minister said last March that he would be having sleepless nights if fewer than 10,000 people signed up for a green deal by the end of 2013: just 1,030 households have signed up. Will he confirm that at this current rate of progress it will take until 2023 for his target to be met?
Gregory Barker
The hon. Gentleman is right. We anticipated that more green deal finance plans would have been taken out by this stage, but we have seen, and been taken aback by, how popular green deal measures have been. There have now been more than 117,000 green deal assessments, and new research published this morning shows that only 5% of people are not installing green deal measures as a result. If people choose to pay for these measures themselves, that is a good thing. The main thing is that people are installing green deal measures using green deal installers and that the green deal market is off to a good start.
Chris Williamson
It would be helpful if the Minister supported Labour’s energy price freeze, but clearly the long-term solution required to end the scandal of people dying because they live in cold homes is a massive energy efficiency programme. As we know, the green deal has been an abject failure, with 1,030 households signing up so far and a 93% fall in the number of loft installations last year. Will he explain why his Department’s policies are failing so badly?
Gregory Barker
Labour’s price freeze is a con, and everybody now realises that it would harm investment and damage the interests of consumers and hard-working families. Fuel poverty is a long-term challenge, but when the Leader of the Opposition was Secretary of State fuel poverty rose to record highs, just as it did in every year of the last Parliament under Labour. The coalition still has a lot more to do, but the fuel poverty figures have been falling, so perhaps the hon. Gentleman should read less rhetoric and more facts.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
May I press my right hon. Friend to put extra effort into those rural areas where poorer people predominantly live in solid-wall, stone-built properties and where, because they are off the gas grid, they are dependent on expensive fuels, such as oil and liquefied petroleum gas?
Gregory Barker
My right hon. Friend makes a very good point. The coalition has put new emphasis on tackling the deep problem of fuel poverty in rural areas. We are looking at this with renewed vigour and will come forward with further improvements to our fuel poverty schemes to ensure they reach those who need help in rural areas.
Huw Irranca-Davies (Ogmore) (Lab)
Precisely how many measures have been installed under the energy company obligation or the green deal among those special rural sub-populations and off-grid users?
Gregory Barker
I am afraid I cannot off the top of my head give the specific figure, but I will happily write to the hon. Gentleman with it and make it available to the rest of the House. I can tell hon. Members, however, that we are doing, and are determined to do, much better than the previous Labour Government.
Mr Mike Weir (Angus) (SNP)
One way to increase energy efficiency is to have modern boilers. The current affordable warrant schemes under the ECO, however, do not include home fuel oil or LPG boilers, discriminating against those in rural areas who are off the gas grid. The Minister has said that the coalition wants to do something for rural areas, so will he look again and ensure that, as he has promised before, all such schemes will be technologically neutral?
Gregory Barker
We take this issue very seriously. We are meeting suppliers again next month, and I can assure the hon. Gentleman that there will be progress. That has eluded Governments in the past, but we are determined to make progress.
Lyn Brown (West Ham) (Lab)
The over-75s are most likely to live in homes with poor energy efficiency, most vulnerable to the cold weather and least likely to switch energy supplier, so they often pay more than they need to. Given the Prime Minister’s promise to put everyone on the cheapest tariffs, this does nothing to help 90% of the people, so will the Minister back Labour’s plan to put all over-75s on the cheapest tariff?
Gregory Barker
The Labour Government had 13 years in which to legislate and sort out the problem but did nothing. We have legislated to put everybody on to the cheapest tariff for their needs. This winter, more than 2 million households, including over a million of the poorest pensioners, will automatically receive the warm home discount of up to £135.
Jim Shannon (Strangford) (DUP)
The boiler replacement scheme for Northern Ireland cost £12 million over the three years; it has been an outstanding success and achieved the high energy efficiency targets that were set. Will the Minister have discussions with the responsible Minister in Northern Ireland with a view to reintroducing a similar boiler scheme here on the mainland UK?
Gregory Barker
We already have live and up and running a cashback scheme to help people with boiler replacements. We think this is an important market and we are looking at it as part of our stamp duty rebate bonus to help drive the green deal and see what more can be done in the boiler market. I am going to Northern Ireland next month; if there is an opportunity to discuss this issue, I will certainly take it.
Mr Stephen Hepburn (Jarrow) (Lab)
2. What steps his Department is taking to tackle fuel poverty.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The coalition is committed to tackling fuel poverty. In 10 months, the green deal and energy company obligation have transformed more than 336,000 homes, of which about 250,000 are low income and vulnerable households, helping to cut people’s bills and keep them warm. In addition, this winter more than 2 million households, including more than 1 million of the poorest pensioners, will receive the warm home discount, worth up to £135.
Mr Hepburn
Since this Government came to power, the big six energy companies have made an unprecedented profit of up to £3.5 billion, while household gas and electricity bills have almost doubled. When are the Government going to catch up with the Labour party and the general public, take these greedy vultures into hand and freeze bills, rather than give what is effectively a taxpayer’s subsidy to the energy companies to give us a miserly £1 a week off our bills?
Gregory Barker
It is a great shame that the hon. Gentleman did not have that view when Labour was in government. Let us not forget that Labour created the big six. There were 14 major energy companies when Labour took office and those were driven into the big six. The big six are Labour’s creation. We are on the side of competition, technological change and the consumer; under this Government, we are putting the consumer first.
Charles Hendry (Wealden) (Con)
Will my right hon. Friend look at taking some specific measures to tackle fuel poverty for those who are off the gas grid? Will he encourage the use of syndicates, which can buy oil and LPG more cheaply? Will he look again at whether this vital sector should be regulated by Ofgem, and will he explore whether some of the revenues from future shale gas development could be used directly to extend the gas grid?
Gregory Barker
I take my hon. Friend’s points extremely seriously, not least because he did a great deal for this group of people when he was an energy Minister. Speaking as someone who is off the gas grid, I am delighted to say that I recently joined my local community’s syndicate for buying heating oil, and it has delivered a very good price. I encourage others to do the same. The good point that my hon. Friend raises is under review. We are looking at more effective data matching to identify those in fuel poverty in rural areas who are often much harder to find than those in similar circumstances in urban areas. We are absolutely on it; I can assure my hon. Friend of that.
Lilian Greenwood (Nottingham South) (Lab)
There was anger and deep disappointment in my constituency this week when British Gas announced that, as a direct result of the Minister’s changes to the ECO, it is pulling out of the scheme that was due to deliver external wall insulation to up to 4,700 concrete houses in Clifton by March 2015. Will the right hon. Gentleman agree to meet me and local partners urgently to discuss whether there is a possible future for this scheme?
Gregory Barker
I will certainly meet the hon. Lady, and I shall be happy to look at the matter in more detail. It is primarily a matter for British Gas, which has an obligation to deliver, at scale, measures to help the fuel poor, but we are determined to ensure that those measures are enforced.
The ECO is now in good health, and we have extended it to 2017. Unlike the programmes introduced by the last Government, which were very stop-go and hand-to-mouth—for instance, the carbon emissions reduction target was initially scheduled to apply to one year but was then extended for another year and then another—the ECO will provide investor certainty until 2017, which is good news for the fuel poor.
Guy Opperman (Hexham) (Con)
Identifying those who live in fuel-poor households is of paramount importance, and Members of Parliament, the Church and credit unions have a role to play in that. We in Northumberland invented oil-buying clubs in this country, and we now have 13 of them, covering almost all the off-grid provision. We have produced a leaflet of which we are particularly proud, which explains how people can reduce energy bills, and we are sending it to individual households.
Gregory Barker
I commend my hon. Friend for his excellent work on an issue that is so important to his constituents. I should love to see a copy of that leaflet. We are keen to find out more about the ideas that my hon. Friend is pioneering with his community, and to learn from good practice and spread it throughout the country. Perhaps we shall have an opportunity to do that when we launch our community energy strategy.
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.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
The Government have taken a number of recent steps to promote shale gas exploration. We confirmed fiscal measures in the autumn statement to incentivise exploration activity, we published a regulatory road map in December setting out clearly for operators the regulatory requirements for shale gas projects, and the Prime Minister announced 100% business rate retention for local authorities for shale projects on Monday. We are also consulting on the strategic environment assessment for a potential 14th onshore licensing round, which would enable further areas of the country to be explored.
Andrew Jones
I thank my right hon. Friend for that answer. Does he agree that, far from being a bribe, the decision to allow councils to keep 100% of business rates is about ensuring that local communities and local people can benefit and get a fair share of the development in their area?
Michael Fallon
Yes, it is important that the benefits of shale gas exploration should not just go to the economy more widely, or to the companies doing the exploration or, indeed, wholly to the Chancellor of the Exchequer. It is important that local people and local communities share in those benefits as well.
Graham Jones (Hyndburn) (Lab)
The Prime Minister has said the Government are going all out for shale, but the Treasury is taking a whopping 62% while offering a minuscule offer with business rates. The Minister’s Department will have received a letter last week from Lancashire MPs—united, cross-party—and Labour-controlled Lancashire county council opposing the business rates offer. I think he received comments from Members on his own side, too—from the hon. Member for Wyre and Preston North (Mr Wallace) saying it is “pathetic and insulting” and from the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), who said it is simply not enough. When is the Minister going to address this issue of fairness?
Michael Fallon
We will, of course, reply to the letter from the hon. Gentleman and his colleagues from Lancashire. However, the decision to give local authorities 100% business rate retention could mean up to £1.75 million a year per well site, and the decision to allocate 1% of the revenues to local communities could mean up to £10 million for a well site. These are formidable sums, and I think it is right that local communities share in any of the benefits that arise from shale.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Can my right hon. Friend confirm that nearly 200 wells in this country and over 2 million wells worldwide have used hydraulic fracturing technology and not a single person has been poisoned by contaminated sub-surface water supplies and not a single building has been damaged by the resultant minuscule earth tremors?
Michael Fallon
I can certainly confirm that hydraulic fracturing is a well-established technique. It has been used the world over. We also have experience of onshore drilling in this country for nearly 100 years now, since the end of the first world war, and hydraulic fracturing will be permitted only if it is safe not only for those involved but for the environment and the local community.
Caroline Lucas (Brighton, Pavilion) (Green)
On Tuesday the Prime Minister said people objecting to shale gas on climate grounds are irrational, yet climate scientist experts and investors all warn that the vast majority of existing fossil fuel reserves must remain underground—they are unburnable if we are to avoid catastrophic climate change—and just today we hear of the BP report that shale gas will not help cut emissions and that essentially fuel switching does not make a difference as coal just gets exported and is emitted elsewhere. In the light of that, will the Minister tell us whether he agrees with the Prime Minister: does he think climate scientists are irrational as well?
Michael Fallon
I think it is wise for all members of the Government to agree with the Prime Minister. Shale gas is one of the greener fossil fuels, and the hon. Lady certainly ought to support its extraction rather than that of coal. We need to reduce our dependence on volatile wholesale international prices for gas and oil, and we need more home-grown energy here under our own control.
Martin Horwood (Cheltenham) (LD)
A recent American report has suggested that, apart from the absolute volumes of water used in fracking, 90% of the water used remains beneath the surface and is removed from the local water cycle. Has that environmental impact been assessed by the Department, and if not, can it be?
Michael Fallon
We will certainly look at all reports and international expertise in this area, but Water UK—the industry body for water—has looked at the management and treatment of water. Let me reassure the House that hydraulic fracturing will be allowed in this country only if it is absolutely safe for the environment, and that of course includes the protection of ground water supply.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
First, may I thank the Secretary of State and the Minister for their kind words about our friend and colleague, Paul Goggins, whose funeral takes place today? He was a regular contributor to these questions, and he was as assiduous in standing up for his constituents in fuel poverty as he was on so many other issues during his time in the House. As you will be aware, Mr Deputy Speaker, my right hon. Friend the Member for Don Valley (Caroline Flint) and my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) are absent this morning, along with many other Members, in order to attend the funeral mass. I know that the whole House will join them in remembering Paul’s tremendous record of public service, and in sending our deepest condolences to his family and loved ones at this very sad time.
May I ask the Minister to tell the House how many jobs he expects to arise from shale gas extraction in the UK?
Michael Fallon
The survey conducted by the Institute of Directors estimated that more than 70,000 jobs could be created by the shale gas industry. We are in the initial stages of the industry, and we expect to have two to three years of exploration, so it is not possible at this stage to make a firm forecast of the number of jobs, but that is the Institute of Directors’ best estimate. In other countries where shale gas has been successfully extracted, however, there have been huge benefits to the economy and reductions in household and business bills.
Tom Greatrex
I thank the Minister for that reply, repeating the figure that was used by the Prime Minister, by Tory central office and by others earlier this week. Does the Minister understand that addressing the legitimate environmental concerns about shale gas will require the Government to be careful, proportionate and responsible regarding what they say about a yet unrecovered energy source? In that context, will he explain why neither he nor—as far as I am aware—his Secretary of State has referred this morning to the findings of the detailed strategic environmental assessment undertaken by AMEC on behalf of his Department? Those findings put the likely figure for full-time equivalent jobs at between 16,000 and 32,000 during peak construction in the next licensing round.
Michael Fallon
There have been a number of estimates, but, as I have said, it is far too early to be sure about the pace of shale gas extraction when we are still at the exploration stage. We have seen estimates from AMEC, and I have quoted the estimate from the Institute of Directors.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
6. What steps he is taking to help households with their energy bills.
Mrs Mary Glindon (North Tyneside) (Lab)
7. What steps he is taking to help households with their energy bills.
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.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
Directly, and indirectly through supply chains, the Government’s electricity market reforms could support up to 250,000 jobs by 2020, the large majority of which will be in renewable electricity.
Tim Farron
In Westmorland, we are extremely proud of having one of the largest and most important hydro manufacturing firms in the world in Gilkes of Kendal, which is a reminder that, unlike other energy sources such as nuclear and shale gas, 95% of the supply chain of the hydro and tidal energy industry is British. Given that and the almost infinite potential of the industry around this island, will the Minister commit to creating tens of thousands of British jobs by making hydro and tidal energy the centrepiece of Britain’s energy policy?
Michael Fallon
I will certainly commit to supporting renewable technologies and a mix of renewable technologies. My hon. Friend will have seen that we have confirmed the strike price for tidal and wave power in the final electricity market reform delivery plan that we published in December.
Julie Elliott (Sunderland Central) (Lab)
Investment in low-carbon energy has halved under this Government, costing jobs and threatening our energy security. Does the Minister agree that the two best things that the Government could do to improve their woeful investment record is to set a 2030 power sector decarbonisation target and stop the internal Government rows that are creating uncertainty and killing confidence?
Michael Fallon
I must tell the hon. Lady that this country has more offshore wind than any other country in the world. We have seen half a dozen large offshore wind farms commissioned and operating, and another four are under construction this year. We are leading the way in the deployment of renewable technologies, and those renewables contributed around 15% of our electricity in the third quarter of last year.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
10. What assessment he has made of the effectiveness of recent investment in the UK’s energy infrastructure.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
Since 2011, 8% of our generating capacity has closed under European legislation, and a further 10% to 12% of current generating capacity is due to close over the decade to 2023. We must continue to invest across the energy landscape to ensure that we maintain robust infrastructure. We have agreed terms for a new nuclear power station, the first in a generation, at Hinkley Point C, and we are also ensuring that new and existing gas generation stays on the system by establishing the capacity market under the Energy Act. We will run the first auction for that later this year.
Stephen Metcalfe
Intergen is keen and ready to build a new super-efficient gas-fired power station in my constituency with Siemens as the contractor. The pension fund and Chinese owners, however, will not commit to the £500 million investment required until Intergen has won a contract to supply at the capacity auction in December. Does the Minister agree that that is causing an unnecessary delay and will he agree to meet me and Intergen to see what we can do to bring forward this important investment?
Michael Fallon
I am certainly happy to meet my hon. Friend and any potential investors and to reassure them that we are now seeing a wave of potential investment under the Energy Act. As I said, we plan to run the first capacity auction later this year, in which we expect considerable interest in gas-fired stations.
Albert Owen (Ynys Môn) (Lab)
Many people who are off grid are in fuel poverty—the figure in rural areas is almost double that in urban areas. DECC’s own figures show that there is potential for 800,000 households to be connected to the gas infrastructure. Would the Minister and his Department consider putting aside some money from shale gas exploration in a levy so that we can extend the gas grid, giving people choice and cheaper fuel?
Michael Fallon
As I explained earlier, money will be made available from shale gas exploration for local communities and it will be up to local communities to decide in which projects to invest it. We are already taking action to improve the position of those who happen to be off grid, as my right hon. Friend the Secretary of State has explained, through better identification and data sharing through the agencies and by encouraging earlier and collective purchasing schemes.
Andrew Stephenson (Pendle) (Con)
11. What steps he is taking to protect the fuel poor whilst seeking to reduce energy bills.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
In December the coalition announced a package of policy changes to save hard-working families an average of £50 off their energy bills. The package also included proposals to extend the energy company obligation, which provides direct support to the fuel poor through to 2017. That gives crucial investment certainty to those rolling out our long-term plan to cut fuel poverty.
Andrew Stephenson
I thank the Minister for his answer. My constituent, Peter Chester, who runs Green World Energy Solutions, a company whose work focuses on households that qualify for ECO funding, is very concerned that the changes to ECO funding might prevent vulnerable households from being able to improve the energy efficiency of their homes. Can the Minister provide any assurances that that will not be the case?
Gregory Barker
Let me reassure my hon. Friend, who is a very effective local champion for entrepreneurs such as Mr Chester and for those struggling with high energy bills in Pendle. I assure him that the coalition has a long-term plan to slash fuel poverty. As we have extended the ECO out to 2017 and increased the number of people it will help, Green World Energy Solutions and other firms like it can now plan with real certainty to continue to improve the homes of thousands of families and help them to cut their bills.
Dr Alan Whitehead (Southampton, Test) (Lab)
12. What progress he has made in developing renewables obligation grace periods for renewable energy developers able to demonstrate financial closure of projects prior to March 2017 but commencing operations after that date.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
The Government have consulted on grace periods for developers able to demonstrate substantial financial decisions and investments by the end of July 2014, in relation to renewable electricity projects that are expected to commission before the end of March 2017. We are analysing responses to the consultation and will issue a formal response setting out the policy on renewables obligation grace periods in due course.
Dr Whitehead
Does the Minister accept that there is considerable demand for such grace periods? Will he say now that he will agree that all qualifying projects will be given the relevant RO during the grace period? Does he accept that a far simpler way of ensuring that the substantial demand is met would be to extend the transition period between the RO and contracts for difference?
Michael Fallon
The consultation only closed a few weeks ago and we must consider all the responses carefully and ensure that the final policy has considered all views. We want to do that as quickly as possible, but it would be a little premature if I announced any conclusion today.
David T. C. Davies (Monmouth) (Con)
14. Given that the ice caps have not yet melted, tropical islands have not been submerged and there has been no rise in temperatures for 16 years, is it not about time we questioned the entire concept of renewables obligations and started worrying a little more about people going into the red than about all of us going green?
Michael Fallon
We certainly worry about those who are struggling with bills, as my right hon. Friend the Secretary of State has said. We have announced a number of measures to encourage competition and easier switching between suppliers.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Renewable energy developers in my island constituency would be helped if, instead of generators being charged to export electricity and consumers being charged to import it, the reality of a domestic island market for production for local consumption was recognised. Will the Minister and his Department look at that possibility to help ease energy bills on the islands?
Michael Fallon
I am happy to look at that specific proposal. The hon. Gentleman will know that the Department has already been looking hard at the Western Isles project in general.
Sarah Newton (Truro and Falmouth) (Con)
Constituents of mine involved in marine renewable energy are finding that the contracts for difference are attracting developers and jobs into Cornwall. Will my right hon. Friend add his support to the launch of the Plymouth city deal tomorrow, which will see Cornwall working with Plymouth to grow new renewable energy businesses, jobs and prosperity for people across the south-west?
Michael Fallon
I am very happy to welcome the Plymouth city deal, particularly the importance of energy in it. As I have said, we have confirmed the strike prices for all types of renewable energy, including wave and tidal. I think that there are some exciting prospects for the industry in Cornwall.
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.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I remind the Secretary of State that it was the Conservative Government who privatised the electricity industry and, crucially, John Major who lifted the restriction and allowed that vertical integration. In an article in The Guardian on Monday, the Secretary of State wrote that the big six
“either supplied themselves or opted for over-the-counter deals, with no transparency”
and that vertical integration
“raised concerns about the wholesale market.”
Will he therefore answer the question that my hon. Friend the Member for Glasgow North West (John Robertson) asked: does he agree with the policy of separating the generation and supply arms of those big businesses?
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?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Certainly not; I do not recognise that figure at all. In fact, new research published today says that over 80% of people who have a green deal assessment are extremely satisfied with it, and only 5% of those who have an assessment—over 117,000 have been undertaken so far—do not go on to install some of the measures that it recommends. We are not only assessing but implementing, and Labour Members need to get over it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We need a little brevity to get through topical questions.
Andrew George (St Ives) (LD)
T6. I was interested to see that the Prime Minister confirmed this week that people living near shale gas sites would enjoy an additional financial benefit. Ministers have confirmed the principle that that should be available to those who live near large-scale onshore wind and large-scale onshore solar array projects. Can the Minister confirm that people who live near such projects will definitely, and on every occasion, enjoy that benefit?
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
Yes. What has been proposed for shale gas is exactly the same as what will apply for large-scale wind farms and large-scale solar farms. Local authorities will be able to enjoy the benefits of 100% business rate retention, and it is only right that local people should therefore get some of the benefit.
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?
Gregory Barker
I would be very happy to meet my hon. Friend. The message we have tried to give this morning is that the ECO scheme has actually been extended, rather than shortened, and the number of people who will be helped by ECO has grown as a result of the package that has been announced. I would be very happy to discuss specifics with my hon. Friend.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
T5. May I say, as a humanist and on behalf of the humanist society in this place, that we respect the work that Paul Goggins did and the way in which he was inspired by his faith? His passing is greatly mourned by all his humanist colleagues.Has the Minister visited Sellafield recently to see the wonderful work going on to get rid of the legacy waste from the Windscale nuclear weapons programme? Is he aware that the 10,000 highly skilled workers there are going to lose their jobs as a result of the plan to shut down the reprocessing plant? Will he meet the workers when they come to this place to address the all-party group on nuclear energy?
Michael Fallon
I would be very happy to meet the hon. Gentleman and, indeed, a delegation from that group when they come down to this place. He will know about the significant investment that has gone into Sellafield through the Nuclear Decommissioning Authority. Obviously, we want to see what prospects there are for continuing that work.
Mr David Nuttall (Bury North) (Con)
In order to reassure constituents of mine who are concerned about fracking for shale gas, will my right hon. Friend please set out the range of licences and regulatory approvals any company will have to have in place before it can extract shale gas?
Michael Fallon
The regulatory road map we published in December makes it clear that any developer must have a licence from the Department; planning permission from the local minerals authority; the necessary permits from the Environment Agency; authorisation from the Health and Safety Executive that its method of fracturing is safe and poses no threat to the environment; and, finally, consent from my Department to proceed.
Jessica Morden (Newport East) (Lab)
T7. In the light of the Government’s announcements this week on shale gas, will the Minister give an update on his Department’s current plans for harnessing energy from the Severn estuary?
Michael Fallon
As I said earlier in response to my hon. Friend the Member for Truro and Falmouth (Sarah Newton), we published the final strike prices for both tidal and wave in December. We continue to take an interest in that particular project, which, of course, has to be commercially sustainable. I am sure that those behind the project are aware of what they have to do to bring it to the market.
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?
Mr Davey
I am grateful for my hon. Friend’s question. There are one or two anomalies with the way in which the warm home discount works. We are looking at how we can tackle that, not least in our approach to the fuel poverty strategy, which will be published later this spring.
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?
Michael Fallon
We have published a study by the chief scientist at the Department on the likely emission level of shale gas. Let me take this opportunity to tell the House that we have of course now signed on the first carbon capture and storage project at Drax, which I hope that the hon. Gentleman will welcome. We hope to follow that with the second CCS project in Scotland very shortly.
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?