Energy Network Charges

Anne Main Excerpts

Tuesday 5th July 2016 Westminster Hall

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

Does my hon. Friend agree that the United Kingdom Government’s policy is strangely based on a horizontal line drawn through London? The Indian Queens power station in Cornwall has been subsidised to the tune of £5.80 per unit of electricity generating capacity, while until its closure this March Scotland’s Longannet power station charged £17.50 per unit of electricity generating capacity. That is a £23.95 difference per unit of electricity capacity—

[Mrs Anne Main (in the Chair)]

Order. May I ask that interventions are brief? There is plenty of opportunity for Members to speak if they wish. The intervention is becoming a speech.

[Martin Docherty-Hughes]

I was just about to bring my intervention to a very firm conclusion, Mrs Main. Does my hon. Friend agree that the price discrimination is about not just consumers, but Scotland’s utilities as well?

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[Ian Blackford]

I have immense admiration for the hon. Gentleman, as he knows, but where is the “Better Together” in this? As I have already said, consumers in the highlands are paying 84% more for their transmission charges than someone living in London. Better together for whom? Not for us.

While I am on the topic, we were also told that our European future was secure if we remained in the UK—Scotland in Europe, and part of a wider European energy market. Well, we know where we stand now. The Minister wants to take us out of Europe with the rest of the UK. If she secures her ambition to become Prime Minister, I hope that she recognises the sovereignty of the Scottish people, who voted to remain in Europe.

[Mrs Anne Main (in the Chair)]

Order. Will the hon. Gentleman stick to his debate about the regional differences in the energy network, rather than European differences?

[Ian Blackford]

I respect the Chair, but I am trying to do this in the context of the European energy market—

[Mrs Anne Main (in the Chair)]

And I am trying to keep you to the debate.

[Ian Blackford]

France has a universal market for transmission charges. I would prefer a national transmission market, as there is in France, to the unequal system that we have in the UK. Why do we not do as France does and treat consumers equitably? We can learn from Europe, and at the same time we should remain part of it and not be dragged out. If the UK Government will not do that, perhaps we need—to paraphrase others—to take back control ourselves.

Research by the national charity Turn2us graphically shows the kind of challenges that those in fuel poverty are facing. One in two low-income households is struggling to afford energy costs, despite being in work. Among the hardest hit are people with disabilities, with more than two in three reporting their struggles, and families, with almost two in three working parents unable to meet these costs. Worryingly, of those households that are struggling with energy costs, nearly half have done so for more than a year. The knock-on effect is severe, with a third forced to skip meals and more than a fifth experiencing stress and other mental health problems. Here are some of the comments made to Turn2us:

“The bills are killing me, sometimes I have to contemplate paying all the rent or heating my home.”

“There are many pensioners like myself who don’t qualify for any help but still have to decide whether to eat or heat.”

“We have stress, debt, arguments and a low mood at home.”

“Starve or freeze? Either way you get ill and can’t work, eat or pay any bills.”

“No lights, only candles, only hoover once a week, only use washing machine once a week, no heating, meals that cook”

slowly.

In Scotland I am proud that our Scottish Government have used their powers to intervene to mitigate some of the effects of rising energy costs. It has been the failure of Westminster and the regulator to properly protect consumers that has led to a marked deterioration in the level of fuel poverty. Transmission charges are an important factor in the high levels of fuel poverty. The Scottish Government are committed to tackling fuel poverty head-on and ensuring that everyone in Scotland lives in a warm home that is affordable to heat, but the measures we are taking in Scotland are undermined by the austerity measures of the Westminster Government. That is why the responsibility for fuel poverty lies wholly, solely and squarely at the feet of Westminster and not at the Scottish Government’s, as the Minister implied earlier.

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[Drew Hendry]

On the point about additional costs, there are many off-grid users in the highlands and islands, for whom costs are 100% more than they are for on-grid consumers. That adds to the problem.

[Mrs Anne Main (in the Chair)]

Order. Mr McCaig, may I ask you to speak through the Chair? You are using the word “you” rather a lot, and of course I have nothing to do with it.

[Callum McCaig]

My apologies, Mrs Main.

The issue, as I say, is one of fairness. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) has highlighted the additional impacts that come from the rural nature of large parts of the highlands and islands and the north of Scotland in general. The Government must take those into account. It is easy to hide behind Ofgem, but the Government must act, and there is a clear and pressing need to do so. As has been mentioned, the charge in the highlands and islands, based on per unit usage, is 84% higher than in London. It is colder in the highlands and islands, so people have to use more electricity. Also, for large periods of the year it is darker, because of the more northerly latitude. The costs of heating and lighting a home are greater the further north people live. That is not taken into account. Also, a far higher proportion of people in the north of Scotland use electricity to heat their homes. That comes at an extra, punitive cost to them. That cannot be acceptable and the Minister needs to explain it.

The Minister, perhaps inadvisedly, intervened on my hon. Friend the Member for Ross, Skye and Lochaber to talk about the fuel poverty record of the Scottish Government. There is more work that they need to do, and they have acknowledged that. Contrary to what is happening here, fuel poverty and, indeed, energy efficiency are national infrastructure priorities for the Scottish Government. There will be record levels of investment. If a comparison is made between the investment record in Scotland and that of the other nations of the United Kingdom, it is highly favourable.

Let us break down fuel poverty and look at where responsibility really lies. Electricity distribution and network charges rest with the Government. The regulation of the market, in terms of the energy companies, rests with the Government. Looking at the fuel side of the issue, it is clear that the responsibility lies with the Government. As to the poverty side of things, it is even clearer that the responsibility is the Government’s. They control the economy, set taxation and, perhaps most importantly, set the parameters of the welfare state, which they have undermined time and again, plunging more people into fuel poverty. On the face of things, the term “fuel poverty” may be devolved to the Scottish Government, but the actual responsibility—the actual levers to effect real change—rest with this Government and largely with the Minister and her Department.

It may be fine and well to engage in back and forth as we regularly do in this place, but we need to see where responsibility really lies. If the Minister really wants the Scottish Government to have that responsibility, I can tell her that we will happily take the powers out of her hands, and I promise her that we will use them more effectively than her Department has in ensuring that the people of our country do not live in cold, dark houses or have to choose, as my hon. Friend the Member for Ross, Skye and Lochaber said, between heating and eating. That is not acceptable in the 21st century. If we are one nation and there are simple things that can be done to address fuel poverty, it behoves this Government to do them.

Another theme that has run through the debate—one that was mentioned by my hon. Friend and the hon. Member for Strangford (Jim Shannon)—is the economic and social impacts that fuel poverty has on our society. Fuel costs are adding cost for and holding back our businesses and social services. There is an opportunity cost. I disagree with the hon. Gentleman about redistributing wealth. This is not actually about redistributing wealth; it is about keeping wealth where it is generated and ensuring that people do not have to pay too much of their own wealth and that it is not sucked out of their economies. It is about keeping the wealth where it is generated and allowing it to be put back into communities in Northern Ireland or in the north of Scotland. That is not redistribution; that is just fairness, which is utterly absent from this regime.

We are not necessarily asking the Minister to agree with the Scottish National party or even the Democratic Unionist party on this issue. We are asking her to agree with herself and with her own Government’s one nation rhetoric. If she cannot do that, perhaps she can explain to us why.

[Barry Gardiner (Brent North) (Lab)]

Diolch yn fawr, Mrs Main. Yn yr wythnos lle mae Cymru wedi gwneud Prydain mor falch, ni ddylir y ddadl atal dathlu athrylith y bobol Gymraeg, yn enwedig os fyddent yn mynd ymlaen i guro’r Ffrancwyr neu’r Almaenwyr yn y ffeinal.

[Mrs Anne Main (in the Chair)]

Order. For the benefit of everyone else here—

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[Drew Hendry]

I will not use the word “you”. He talks about this being a small amount, but when you are faced with the costs of paying for off-grid fuel—oil and gas—the additional costs because you live in a sparse area and low wages in a low-wage economy, this is a devastating cocktail. Do you not agree that it is not as unimportant as you are making out?

[Mrs Anne Main (in the Chair)]

Order. I am not making out anything, but I shall call Barry Gardiner, who may answer on his own behalf.

[Barry Gardiner]

I agree that many factors come together to push people into fuel poverty and into poverty. They have been ably outlined by the hon. Gentleman and his colleagues. The point I am making is that here we have something that affects not just one part of the United Kingdom but many parts of England and Wales, as the Ofgem report clearly shows.

[Barry Gardiner]

I felt that the debate had been unbalanced in how the facts were presented, which implied that this was an injustice being done by the Westminster Government to poor Scotland.

[Mrs Anne Main (in the Chair)]

Order. May I point out that I shall be calling the Minister at 4 o’clock? Mr Gardiner, I accept that you may wish to take interventions, but I say that just in case the new timings have eluded people.

[Barry Gardiner]

Mrs Main, I am mindful of your ruling. I simply wanted to say I accept that there is an issue of justice and fairness, but wider effects are being felt all around the UK. If we keep this issue in that context rather than trying to make it about “us” and “them” and simple victimisation, we will have a much better opportunity to resolve the problems that do exist.

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[Ian Blackford]

I am grateful to the hon. Lady for giving way; she has been very generous with her time. Does she appreciate that we have a universal market for the delivery of telephone and broadband and we all pay the same price, regardless of where we live? We pay the same price for a postage stamp. We are still not addressing the fundamental point: people are paying higher prices for transmission of electricity simply because of where they live. We are generating higher levels of fuel poverty as a direct result of that.

On the whole argument about winners and losers, this is about fairness. The Minister talks about being “one nation”; we should be talking about delivering fairness to everybody and not discriminating against people, which is exactly what this Government are doing.

[Mrs Anne Main (in the Chair)]

Order. Before I call the Minister, I say to the hon. Gentleman: please, respect the Chair. Interventions are meant to be short and they are becoming incredibly long. Standing and talking through the Chair is incredibly disrespectful.

[Ian Blackford]

It is disrespectful how my country has been treated by this Government.