Energy Prices

Debate between Alan Whitehead and David T C Davies

Wednesday 14th January 2015 Commons Chamber

[David T. C. Davies (Monmouth) (Con)]

My colleagues have done a very good job of rubbishing the economics behind this ludicrous Labour policy. I do not need to add much, except to say that we have heard some deprecating comments about shareholders. Opposition Members tend to forget that shareholders are not toffs walking around the City in top hats. Shareholders are millions and millions of ordinary working people who do not have the luxury of a public sector pension. Private sector pension funds rely heavily on companies, including energy companies, to ensure that working people have decent and fair pensions at the end of their working lives. It is about time that Opposition Members realised that shareholders are millions of ordinary people.

I welcome this debate—I really and truly do—because although what the Opposition are suggesting is ludicrous, it is very interesting that the shadow Secretary of State for Energy and Climate Change has chosen to use her Opposition day debate to talk all about energy and to forget all about climate change. She has realised one thing that I could have told her and some Government Members many years ago, which is that people are far more worried about rising energy bills than about so-called global warming.

I should declare an interest at this point, because I do not buy the consensus at all. Unfortunately, I do not have time to point out the obvious flaws in the argument, but suffice it to say that even those who buy the idea, hook, line and sinker, that the climate only started changing 200 years ago—actually, what the Intergovernmental Panel on Climate Change says is very different from what the environmentalists say—must surely be aware that the UK emits only 2% of the world’s carbon emissions. Therefore, the policies that we have implemented, which have pushed up energy prices, are having no impact whatsoever on the climate, and it is about time that we threw them overboard.

If Members of all parties are interested in reducing energy bills—I hope they are, because I certainly am—they need to look at the fundamental point of how much that energy costs to produce. I have recently seen figures that suggest, and I think at least one Member who is present will correct me if I am wrong, that it costs about £20 per megawatt-hour to generate our electricity from coal, about £40 per megawatt-hour to do so from gas, about £95 per megawatt-hour with subsidies to do so from nuclear or onshore wind and a lot more to do so from offshore wind and other renewables. It is a fundamental economic fact that if we want to reduce electricity prices, we need to ensure that as much electricity as possible is generated from coal and gas, not from expensive renewables. That is one sure fire way to bring prices down.

[Dr Whitehead]

The hon. Gentleman presents a bit of a puzzle. How does he explain his own Government’s recently rolled out policy of putting 11p on everybody’s bills precisely to generate more power for consumers from gas and coal? It has nothing to do with climate change; it is just an 11p increase in people’s bills.

[David T. C. Davies]

The hon. Gentleman would have to ask a member of the Government about Government policies. I have always taken a rather different view on energy, as he will be well aware—that we ought to generate it from the cheapest sources possible, which at the moment are coal and gas. That would bring prices down.

Of course, there is more that we could do to bring down prices. Currently, about 40% of our electricity—actually 47%, I see from my notes—comes from gas. It is worrying that Opposition Members are so quick to rule out the possibility of hydraulic fracturing as a means of getting our own gas out of the ground. That energy technology could generate thousands of well-paid jobs and deliver cheaper prices to consumers. It certainly will not do any harm, and provided that all the environmental safeguards are put in place, to which we are absolutely committed, we should explore that technology.

Finally, I turn to smart meters. Like many people, I have a smartphone. Nobody forced me to buy one; they were out there in the shops and somebody else bought one, and it looked like good technology so I went out and bought one. I have absolutely nothing against smart meters. If somebody wants to produce one and put it on sale in Currys, I might think about it. What I object to strongly is the idea—an anti-conservative one, in my opinion—that we will all be forced to have them.

The latest report I have seen on smart meters, from June, suggests that the price of putting them in has gone up to £11 billion, and there is a possibility of its going much higher if people are not as enthusiastic about them as the Government think. I am certainly not enthusiastic about them. That £11 billion will simply be added to our energy bills, but we are told that it does not matter because there will be £17.1 billion of benefits. Of course, if we look at the report carefully it is clear that those benefits, if they ever arise, will not come through until about 2030. One of those benefits is that people will be using less electricity, which will presumably be because their prices have gone up because they have a smart meter. Some of the benefit calculations have been derived from the fact that the Government will be paying less of the taxes that they are effectively imposing on themselves for carbon emissions. It is all smoke and mirrors, and a return of £17 billion on a risky £11 billion investment over 15 years is frankly a pretty poor one anyway. I suggest that the Government might want to think again about that.

It is great news that the shadow Secretary of State has used her Opposition day debate for this subject. Let us talk about energy prices and getting them down as low as possible. People have a right to cheap energy. I knock on thousands of doors—I am up for election in a few months, like everyone else, so I am putting my money where my mouth is—and people in my constituency are more worried about rising fuel prices than about the non-existent rise in temperatures. No rise has taken place since 1997. It is the economic climate we should be worrying about, not the geographical climate.

Energy Company Licence Revocation

Debate between Alan Whitehead and David T C Davies

Wednesday 3rd September 2014 Commons Chamber

[David T. C. Davies]

According to the Secretary of State, that is the ultimate sanction.

[Dr Whitehead]

No, it isn’t.

[David T. C. Davies]

That is what the Secretary of State said. Who am I to question him on that particular issue?

Climate Change Act

Debate between Alan Whitehead and David T C Davies

Tuesday 10th September 2013 Westminster Hall

[David T. C. Davies]

I also have a typical graph, and very worrying it is, too, because we see that over the past 150 years there has been a huge spike in temperatures, which would be enough to worry anyone—it got me going in 2008. The problem with it is that it does not take into account the fact that if one goes back 1,000 years, 2,000 years or 1 million years, one will see large increases and decreases in temperature and in the amount of CO₂ in the atmosphere.

I was thinking the other day that we would need a graph going back at least 1 million years to get any idea of what is really going on. If we had one—1 million years is still only a fraction of the earth’s 4.5 billion-year history—we would see that most of the time, ice covered the northern part of the earth. We have been in an ice age for roughly 90,000 out of every 100,000 years. For 10,000 years, it would warm up, and then it would go back to being cold. We seem at the moment to be coming to the end of 10,000 or so years of relative warmth. It is an ice age that we should be worried about.

If we want to make policy based on graphs like this, we need to look at what is really going on. We need to go back 1 million years, and based on the scale of the graph that I have, we would need a graph 10 km long to get an idea. I did a 10 km race for charity on Sunday in Cardiff. It took me 42 minutes, which—I am not trying to brag—I am told is not bad for a 42-year-old. What has happened is as though I had run for every one of those 42 minutes past a graph showing peaks and troughs in temperature, and then looked at the last 3 cm and decided, based on that, to embark on a Government policy that would cost my country billions of pounds and thousands of jobs. That is absolute madness.

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

I really do not know where to start with this flat-earth love-in. Does the hon. Gentleman accept the observations of the Met Office Hadley Centre, or is the Met Office in on the conspiracy? If it is not, the recent papers that it published considering anthropogenic warming globally over an extended period demonstrate clearly that recent changes in weather, and pauses and reductions in temperature increase, in no way affect the underlying issues of global warming. The Met Office is clear about that, and about the effect of the overall increase in anthropogenic carbon dioxide on the overall temperature systems of the world, as well as on the atmosphere, the oceans and the surface temperature of the world as a whole.

[David T. C. Davies]

No, I do not accept that at all. The Hadley Centre did everything possible to withhold its evidence and calculations from anyone who wanted to look at them independently.

[Dr Whitehead]

So they are in on the conspiracy.

[David T. C. Davies]

I am not going to answer an intervention made from a sedentary position, but I have made my point. It is absolutely disgraceful that Government-funded bodies have tried to withhold evidence from people who want to examine it independently. I have tabled written questions to the Met Office while this Minister has been in office. I have had to table and re-table them, because I have asked for graphs showing what the temperature increases will be, and the Met Office has hidden them as well as it can on its website, because it does not want to make it plain that there has been no increase in temperature since 1997.

Maybe the Met Office should start explaining why its predictions are so wrong and why there has been no increase, despite the enormous amount of CO₂ produced since then. Maybe it should tell us how much of the increase that has taken place resulted from natural warming as a consequence of leaving the little ice age.

Energy Bill

Debate between Alan Whitehead and David T C Davies

Tuesday 4th June 2013 Commons Chamber

[David T. C. Davies]

I will not give way any further. I have made my point. I will be supporting the Government, as much as anything else because I look at some of the people who are not supporting them and I realise that being in coalition, even being in the same party as people whom one can respect and admire but not always agree with, is all about a bit of give as well as a bit of take. So I will support the Government tonight, but I hope that the Minister will think about what we say and consider whether these policies might need amending in the light of further evidence about the relevance of temperature rises in the future.

[Dr Whitehead]

I think the hon. Member for Monmouth (David T. C. Davies) will be going home tonight and throwing all the contents of his fridge out, because he knows that he can go down to the shop to buy some more food tomorrow. Perhaps he might think about the wider externalities of saving energy and saving demand, because, among other things, having a good demand-side reduction policy means that we do not have to produce the new capacity that otherwise we might have in stream to meet our energy demand, as we would be using energy across the board much more efficiently. Whether or not one believes—he plainly does not—that anthropogenic climate change is a real and pressing issue, using our energy far more efficiently and making sure that those possibly unfundable, difficult-to-organise increases in capacity can be averted by doing so is a prize in its own right. That is the case whether or not one thinks this is intimately bound up with climate change, and I wish to dwell briefly on that precise point.

The Minister showered me with kind words, so he would not expect me to say anything unkind in return. It would be churlish of me, and I was not intending to do so. [Interruption.] There is no “but”. Instead of advocating, at great length, the amendment that I was pursuing on demand-side reduction, I wish to see whether we can unpack a little of some of the consequences of the Government proposals that have now been introduced. I warmly welcome those, and I know that the Minister had quite a hard time getting them to the table in their current form. Therefore, I very much welcome both the effort that has gone into introducing these provisions and their content. Essentially, the amendments would produce, through the right mechanism of capacity payments rather than contracts for difference, a serious method of addressing the question of demand-side reduction over a long period, but I would place a little question mark against that demand-side reduction capacity or anti-capacity being auctioned through the general capacity auction system. As my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) has mentioned, we know from experience elsewhere in the world that demand-side auction participants tend to be squeezed out of wider auctions on capacity when they participate.