EU Membership: Economic Benefits
Debate between Lord Lilley and Caroline Flint(8 years, 6 months ago)
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Caroline Flint
I will not speculate, but we need a future where work in social care is not poorly paid, because we are doing a disservice to social care workers, and to the elderly people and other independent adults who rely on them. That is the challenge, and we as a country must take ownership of that and not blame the EU for all the problems on our doorstep.
There is fraud and people who are paid off the books, but that happens with British people who work illegally too, sometimes with bad employers or organised criminal networks behind them calling the shots. Many more people come here because of the work available and because English is the international language. Change is not as easy for some as for others, and leaving the EU will not solve that. The coalition Government were wrong to abolish the migration impacts fund, and it is right that freedom of movement should mean freedom to work, with people putting in before they take out. It is good news that the much maligned European Court of Justice has ruled that it is right for EU member states to be able to withhold benefits.
Let us be honest. Young Brits today do not queue up to pick crops or work in social care. The greatest deceit by the leave campaign is that the UK can keep all the access to the EU single market, but not allow EU workers to work here. If we restrict EU workers who are allowed to work here, why would the 1.6 million Brits who work or live in Europe not face similar restrictions?
Caroline Flint
I will not give way because I have already done so twice.
Non-members of the EU do not get better deals. Why would the EU offer Britain a deal that is better than that of any of the other 27 members? That would be a recipe for every country to leave. Most of all, we must not let members of the leave campaign claim that they are more patriotic than those who want to remain in the EU. I love Britain, and we will continue to be a strong, proud nation, but we are stronger and better-off as members of the European Union.
Climate Change
Debate between Lord Lilley and Caroline Flint
Caroline Flint
I am going to make some progress because it is a short debate.
That gap is bad for jobs and for tackling climate change and it does not bode well. Leadership needs to be shown in the months ahead.
By this time next year we could have a binding agreement from 196 countries that puts us on a path to a sustainable future, but it will require us to show real leadership. It used to be said we would never get a deal without the world’s biggest emitters stepping up. Well, America and China have already taken one step with a deal that could see China’s emissions peak in 2030 and would see the US reduce its emissions to 26% to 28% below 2005 levels by 2025.
The current bid from the EU for “at least” a 40% reduction in emissions by 2030 does not go far enough. We are already signed up to a tougher target of 60% by 2030 at home, because of the Climate Change Act and the fact that we met our first carbon budget. We should be doing everything possible to toughen the EU position. The “at least” in the EU submission makes it possible to do that. The EU has already met its 2020 target five years early. I think we should be more ambitious. In his statement today, the Prime Minister said we needed to be ambitious, so I ask the Secretary of State, what does ambition in the EU look like?
We also have to recognise the link between the sustainable development goals being negotiated in September and the Paris conference, because we will not make progress in reducing poverty unless we succeed in limiting the effects of climate change, which we know devastates communities and affects food security, transport and jobs. It leads to the displacement of people with no home or hope, and to the costs that follow in disaster relief. I am proud that under the last Labour Government, the Department for International Development led the world in helping countries adapt to climate change, such as Bangladesh, where 300,000 people were helped in raising their homes above sea level.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Is the right hon. Lady going to address the issue of cost? She criticised me and four others for voting against the Climate Change Act, but I did so because the impact assessment showed that the potential costs were twice the maximum benefits. According to the Government, the costs will now reach something like £400 a household by 2020. Will she address that issue?
Caroline Flint
The problem is that although the right hon. Gentleman is right that there is a cost to change, there is a bigger cost to doing nothing at all. The investment that we make will not only help us make energy cheaper and homes warmer but create job and investment opportunities. He might like to stay in the 19th century, but I would like to take us forward to a better—[Interruption.] I am sorry, but that is what it is—“Let’s stay with what has gone on in the past, even though we know that it is not fit for purpose for the future.” There is everything to gain from having a cleaner-energy future. However, I am glad in some respects that he continues to be a minority voice in the House on the issue.
Energy Prices and Profits
Debate between Lord Lilley and Caroline Flint(11 years, 3 months ago)
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Caroline Flint (Don Valley) (Lab)
I beg to move,
That this House recognises the importance of the energy industry to the security and prosperity of the UK economy; notes that the average household energy bill has increased by over £300 since the 2010 general election; further notes that the big six energy companies have had a £3.3 billion uplift in profits over the same period; welcomes the recent report on Energy Prices, Profits and Poverty from the Energy and Climate Change Committee (Fifth Report, HC 108) which found that Ofgem is failing consumers; regrets that the Government has halved support for people in fuel poverty, and that as of 20 August 2013 only 132 households had signed up for a Green Deal plan; further regrets the Prime Minister’s broken promise to legislate so that energy companies have to give the lowest tariff to their customers; and calls on the Government to bring forward amendments to the Energy Bill to make the energy market more competitive and transparent by requiring energy companies to pool the power they generate and to make it available to any retailer, to create a tough new energy watchdog with the power to force energy companies to pass on price cuts when wholesale costs fall, and to put all over-75 year olds on the cheapest tariff.
Earlier this afternoon, we heard from my hon. Friends the Members for Leeds West (Rachel Reeves) and for Nottingham East (Chris Leslie) about the full scale of the cost-of-living crisis unfolding in Britain. For 37 of the 38 months in which this Government have been in power, real wages have fallen. At the same time that people have seen their incomes squeezed, the cost of living has also increased sharply. In the last three years alone, the average household energy bill has increased by over £300. It is no wonder that Which? research has shown that 79% of people now worry about how to pay their energy bills. With nearly four in 10 people saying they are likely to have to cut back on their energy spending in the coming months, and with warnings of more price rises coming later this year, I make no apologies for returning to a topic that we have debated a number of times in the last couple of years.
As we know, energy companies claim that there is a whole raft of reasons why energy bills are going up—wholesale costs, network charges and social and environmental obligations. With all those extra costs, one might think that profit margins would have come down, but quite the opposite. It is now clear that, regardless of those costs, these companies have seen a substantial increase in their profits. We know that because since 2009, energy companies have been required to publish information on their financial performance, including their profits. The information shows that in 2009, Britain’s big six energy companies made just over £2.2 billion in profit. In 2012, by contrast, they made more than £3.7 billion in profit—an increase of nearly 70%. Overall, over the last three years, Britain’s big six energy companies have seen a huge profits uplift of more than £3.3 billion. If anything, this is likely to be an underestimate because it excludes their profits on trading and from gas storage.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
I noticed that, among the factors affecting energy bills, the right hon. Lady did not mention the cost of moving from lower-priced fossil fuels to very expensive renewables. That is the only item that is directly under the control of this House. Was it not somewhat disingenuous not to mention it?
Mr Lilley
That is the total impact of Government policies. Whatever the figure is, my constituents and the constituents of the hon. Member for Glasgow North West (John Robertson) are paying it. Overall, if one third of the cost of renewables is falling on households directly, the other two thirds also falls on households. There is no such thing as industry in this case. All costs are borne by individuals: by consumers and employees, and by pensioners through the impact on the value of shares and profits that are held largely by pension funds. We should not allow the costs we are imposing on people to be ignored or understated.
The second disgraceful aspect of the Opposition motion is the pretence that the rise in energy bills we have experienced in recent years is largely or entirely due to a rise in profits. I wish that were true. If it were true that the rise in profits accounted for the 41% rise in gas prices and the 20% rise in electricity prices, undoubtedly those profits would be excessive and we could bring down profits and prices by greater competition or better regulation. Sadly, however, it is not true. Table 6 of the Select Committee’s report records that the average profit margin of the big six is 7.6%, which cannot account for the massive 20% and 41% increase in prices.
Caroline Flint
Will the right hon. Gentleman clarify what aspect of the profit margins he is basing those figures on?
Mr Lilley
That is the average of both generating profits and distributions profits. It is in table 6 of the report, which I am sure the right hon. Lady has read assiduously. She can check it if she wishes.
The right hon. Lady refused to answer a question about what a correct level of profit would be, but I cannot believe that she thinks profits are more than twice as high as they need to be. Even if we were to halve the profit level from 7.6% to 3.8%, the effect on prices would be very small compared with the huge increase we have seen. As we all know, the increase is largely the result of the increase in fuel prices, which is outside the control of Governments.
The suggestion that all energy companies have seen massive rises in profits is also dispelled by table 4, on page 27 of the report. Indeed, the Committee referred to the figure given in the Labour party’s motion of an increase in profits of £3 billion, which I think comes from Consumer Focus. The report states:
“Table 4, however, doesn’t appear to support this.”
Table 4 shows what has happened to companies’ profit margins from 2007 to 2011. For EDF, the average profit margin was 15.7% and went down to 8.5%. For SSE, it went from 4.2% to just 0.8%. For British Gas Centrica, it has gone down from 7.3% to 5.6%. For Scottish Power, it has come down from 11% to 4.4%. For E.ON, it has come down from 6.8% to minus 2.2%. For npower, it has come down from 12.2% to minus 5.5%. Therefore, the idea that there is huge scope for us to bring down excess profits, and thereby prices, through regulation or improved competition is sadly not correct, and it is dishonest to pretend that it is.
Energy Bill
Debate between Lord Lilley and Caroline Flint
Caroline Flint
I agree. As has been said, the Climate Change Act 2008, led by my right hon. Friend the Leader of the Opposition when he was Secretary of State for Energy and Climate Change, was a world first. It put us in a position, with cross-party support, with a few honourable—or maybe not honourable—exceptions, in the forefront of change.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Is she allowed to say we are not honourable?