Oral Answers to Questions

Alan Whitehead Excerpts

Thursday 13th December 2012 Commons Chamber

The Secretary of State was asked—

[Dr Alan Whitehead (Southampton, Test) (Lab)]

1. What steps he is taking to help households with their energy bills.

--- Later in debate ---

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

Helping people with energy bills is a top priority for us, so we have a range of initiatives including tariff reforms, energy-saving policies and direct help to cut the bills of those on the lowest incomes. From our consultation on proposals to help to get consumers on the cheapest tariffs to the green deal, and from the warm home discount to our promotion of collective switching, this Government will do whatever we can to help people and businesses to combat the effects of rising energy prices.

[Dr Whitehead]

Has the Secretary of State had a chance to peruse the report just produced by the Committee on Climate Change on the customer price differential between a renewable-rich strategy and a gas-rich strategy? Does he agree that that could represent a sixfold difference in long-term price increases for customers? Does he agree with the committee’s view, and will he be sharing his views with the Chancellor shortly?

[Mr Davey]

The hon. Gentleman got a lot of questions in there. I have looked at the headlines but I cannot say that I have read the full report, although I certainly intend to do so. I agree that it poses some challenges to those who debate energy policy, because it suggests that with a high gas price prediction, we could see energy bills going up by, I think, £600, whereas under a renewables strategy it would be only £100. The Government are adopting a mixed-energy approach, so that we are not dependent on any single energy source and can therefore manage the risks, because we cannot know the future of gas prices or predict how the cost of renewables will go down. I believe that our approach is the best one for the British economy.

--- Later in debate ---

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I thank my hon. Friend for his dogged determination in pursuit of this issue. I assure him that, although we cannot yet declare victory, we have victory within our grasp. Thanks to the leadership of the Prime Minister and our determination to legislate, we are moving towards bills that not only offer greater transparency and clarity, but instil greater competition. I think that our final model will be based on the modelling that my hon. Friend has shared with us.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Will the Secretary of State explain why he proposes in the Energy Bill to include contracts for difference that are raised from levies in the levy control mechanism, but to exclude capacity payments that are raised by levies from the same mechanism?

[Mr Davey]

They are intended to do two separate things: contracts for difference are intended to stimulate investment in low-carbon energy and the capacity mechanism is about security of supply.