Energy Price Freeze

Debate between Lord Redwood and Ed Davey

Wednesday 2nd April 2014 Commons Chamber

[Mr Davey]

That is simply not true. We were reforming the markets from day one because we had inherited the big six from the Labour party.

Let us return to the small independent competitors. In its response to Labour’s Green Paper, Good Energy said:

“The proposed price freeze poses a disproportionate impact for smaller companies such as ourselves as we do not have the same level of vertical integration as the big 6 which allows us to control our costs.”

If raw energy costs rise during a freeze, vertically integrated firms with deep pockets can withstand a profits squeeze, but smaller, retail-only firms would go bankrupt. Result: reduced competitive pressure on the big six and higher overall prices when the freeze comes to an end.

[Mr John Redwood (Wokingham) (Con)]

Given the very high cost of wind energy, does the Secretary of State think there should now be some limit on the subsidy going to that sector to try and keep bills down?

[Mr Davey]

There is a limit, of course. The right hon. Gentleman ought to follow this debate more closely. Indeed, we have reduced subsidies and our policy is to reduce them still further.

The truth is that, rather than helping consumers, Labour’s price freeze is a pro-big six policy. For all the bluster about taking on the big six, the right hon. Member for Don Valley is just playing into their hands. If Labour makes the smaller competitors go bankrupt, the people who will enjoy that are the big six, and the right hon. Lady knows that.

UK Nuclear Energy Programme

Debate between Lord Redwood and Ed Davey

Monday 21st October 2013 Commons Chamber

[Mr Davey]

The right hon. Gentleman is out of date. The Government have been giving support to Sheffield Forgemasters.

[Mr John Redwood (Wokingham) (Con)]

I welcome the decision to have more power capacity, which we greatly need. However, given the generous financial terms to the investors, did the Secretary of State consider the possibility of reserving some part of the financial investment and provision of capital for British interests? I am sure that many of them would like those sorts of returns.

[Mr Davey]

First, 57% of the value of this project will go to UK firms, and I hope that the right hon. Gentleman welcomes that. I do not believe that these terms are generous at all. We have had hard negotiations to get them down, and EDF realises that. Some of the benefits of the deal we have negotiated need to be held up in the headlights. There is the construction gain share, so that if the construction costs are lower, the consumer gains. If there is a refinancing by the investors in 10 years’ time from which they make a lot of money, the consumer will gain from that refinancing. That never happened with private finance initiative deals when Labour was in power; rather, the taxpayer lost out. We have the refinancing gain share for the consumer, and I doubt that would have happened if that lot had been in power.

Jobs and Growth in a Low-carbon Economy

Debate between Lord Redwood and Ed Davey

Monday 5th March 2012 Commons Chamber

[Mr Davey]

I certainly can give my right hon. Friend that commitment. I have already met many non-governmental organisations and have spoken to the devolved Administrations. It was my pleasure and privilege to work on this agenda with him over a number years. He showed fantastic leadership when this was not a popular issue. He did more than almost any other hon. Member to put this issue on to the political agenda, and I pay complete tribute to him.

[Mr Redwood]

Does the Secretary of State agree that if Britain’s energy is a lot dearer than that of her competitors, we will drive a lot of industry to a lot of other countries? There will be as much CO₂ in the world, but we will be short of jobs.

[Mr Davey]

We need to look carefully at our energy-intensive industries, which is probably what is behind my right hon. Friend’s question. However, there is a danger in the debate that some of the economic analysis is too static. As the world moves to its climate change targets, industries across the world must be more energy-efficient. Industries in countries such as ours that can steal a march and become first movers will prosper by becoming more energy-efficient. Some of the market signals that are needed are rightly happening, but I accept that we need packages for energy-intensive industries.