Energy Bill

Debate between Lord Whitty and Lord Bishop of Chester

Tuesday 9th July 2013 Grand Committee

[Lord Whitty]

My Lords, I have two issues. First, I support the clarity referred to by the noble Lord, Lord Teverson, that is promoted by the amendment proposed by the noble Baroness, Lady Maddock. Secondly, there are issues relating to the cost of carbon, and so forth, which need to be reflected in energy bills, but I am not sure that I would agree with what the right reverend Prelate says in how we present that. There is a cost to all of us of carbon and to isolate it separately in a crude way would not necessarily improve understanding. The Government would have difficulties in that respect.

On the consumer issue, I would just mention the survey about unit pricing that I referred to under the earlier group of amendments. On the question of percentages, the public do not understand APRs when they take out loans, so they will not understand TCRs in relation to this operation. The Which? survey shows that three out of 10 people using the tariff comparison rate found the cheapest rate whereas more than 80% found the best comparison when they were demonstrated by unit prices. So the use of clear figures but not necessarily percentages will help in that regard, and I support the noble Baroness, Lady Maddock.

[The Lord Bishop of Chester]

Can I just come back on this point? What I wanted was for the government obligations to be listed. One justification for these green taxes is that it saves money in the long run because of this, that or other theory. However, when the Government themselves impose a financial tax or precept, or whatever you want to call it, we should all surely want a degree of transparency about it. Then there is an argument about whether it is justified because of other long-term savings. The danger is that if you hide these things away you cause the lack of confidence in consumers that the amendments that we have discussed are precisely about.

Energy Bill [HL]

Debate between Lord Whitty and Lord Bishop of Chester

Tuesday 8th February 2011 Grand Committee

[The Lord Bishop of Chester]

My Lords, whether one takes the view that current government policies will lead to an unpleasant, unfortunate and regrettable increase in energy prices through the renewables obligation and so forth or one takes the line of the noble Lord, Lord Deben, who is not back from the vote yet, that this is all in order to save the universe, the public needs a certain amount of transparency on the issue.

Another reason it is important concerns the great increase in energy prices since the youth of the noble Lord, Lord Dixon-Smith, who must be even older than me if it was that cheap when he was young. The key question going forward is how energy prices in this country relate to energy prices in other countries. If such prices in this country get out of step internationally, that would have profound implications precisely for the people in the pub in Burton upon Trent who would find their jobs under threat if they were dependent on energy usage.

Whichever way you look at it, a consistent, annual process of reporting should be as far as possible value-neutral. We can all then make our minds up on a fair and accepted basis of available information, which is important for going forward. It would be very hard to say that that is available at the moment. As has been said, there is a great deal of confusion. One way or another, I do not doubt that this amendment is not right in its present form—perhaps this is not the Bill for it—but we need to have information or there will be misinformation. It needs to be a priority as we go forward with our energy policies.

[Lord Whitty]

My Lords, I broadly support the thrust of these amendments. It seems to me that there are four separate issues. First, on transparency, most people who have spoken think that there should be more transparency. The noble Lord, Lord Deben, is not in his place, but it would not be that difficult for the Treasury to provide more transparency in this area. Between DECC, the Treasury, Ofgem and DWP, a lot of information needs to be pulled together. It should be presented in such a way that debate can be focused and different policy options can be properly addressed. That does not exist as effectively as it should. The first of these amendments attempts to address that issue.

The second issue is, faced with that information, what is the policy? To address the point made by the noble Lord, Lord Deben, we clearly all agree that if you are going to have behavioural change, somebody has to bear the price. It is a question of who bears that price, what the social consequences are of bearing it, what the structure of tariffs is—to go back to the point raised a few days ago by the noble Earl, Lord Cathcart and the noble Lord, Lord Teverson—and how they affect people’s behaviour and energy use. We can draw different conclusions. We can have a proper policy debate as long as we have the basic information in a form that is understandable, at least at some level, not only by us but in a public bar in Burton upon Trent.

The third dimension is the narrative. Wearing my consumer hat until very recently, I have argued that the narrative to consumers about where we are going on energy has been missing. Without that narrative, we are not going to convince the public in general that we have an energy policy that works for them and which has a clear outcome. From their different perspectives, the energy companies, consumer groups and the Government are in desperate need of a clear narrative, but it depends on having clarity of figures.

The last point addressed by the second amendment is about where we discuss this. Whether or not the exact form that my noble friend Lord Lea proposes is suitable for our approach to government, clearly there has to be somewhere where energy policy issues are addressed from the different objectives of energy policy: decarbonisation, fuel poverty, climate change, energy security, investment necessities, the structure of regulation and other government interventions. Of course, there are going to be definitional problems even with regard to the basic information. Is road fuel duty an environmental tax or not? It was started by Lloyd George when climate change was not a well known problem. It is difficult to say that it is entirely an environmental tax as distinct from a general tax-raising power. Likewise, is the winter fuel payment really to address fuel poverty or is it a supplement to social security policy?

There will be serious definitional problems, but let us get them out in the open. We can then move on to clearer policy discussion and to a narrative that the public might eventually be persuaded to understand. Although noble Lords will no doubt have some problems with aspects of the amendments as down, it would behove all of us to recognise that these four issues need to be addressed. At the moment, one of the problems of energy policy is that people have got hold of part of the problem but cannot see the totality. One of the reasons for that is the lack of agreed and clear statistics and information on the basic facts about energy.