Baroness Primarolo
Main Page: Baroness Primarolo (Labour - Life peer)
Several hon. Members
Madam Deputy Speaker (Dawn Primarolo)
Order. I remind the House that the debate must end at 7 o’clock. Quite a few Members wish to participate in the debate, so I ask each Member to make their contribution briefly so that we can facilitate as many contributions as possible.
Chris Heaton-Harris (Daventry) (Con)
I will certainly obey your request, Madam Deputy Speaker, and skate through what I have to say. I should declare an interest at the very beginning, because I run a campaign outside the House. It is a not-for-profit company and I do not take a salary or any expenses, but I declare an interest, in the spirit of the time and in the hope that others pushing amendments may do exactly the same later.
I was pleased to hear the Minister address many of the concerns that I have raised in my amendments. I did not bang on about the thing that most would have expected me to bang on about in my amendments. I believe that the Minister agreed with one of them, and just wanted to check; I am slightly concerned that that might be the case. Alas, it was not the amendment that I really wanted him to agree with—amendment 169, which concerns the costs to consumers of the outcomes of the Bill.
The motivation of my amendments was simple: to include a reference to the consumer interest and force the Secretary of State and the Government to have regard to that, and to require much greater transparency about the contracts created and the costs imposed by the Energy Bill. We all know that the Bill came out of the Government’s electricity market reform process, which began in 2010 and had three elements. The first is the carbon price floor, which has been introduced by the Finance Act 2013 and sets out a path for a minimum carbon price in the UK from the fiscal year 2013-14 from £16 per tonne to £30 by 2020.
There is a new renewable and nuclear subsidy mechanism. The Government will replace the existing regime with a contract for difference mechanism. This new mechanism will very largely transfer the price risk from the developer to the consumer by guaranteeing an achieved power sale price for each power station covered. Unlike the renewables obligation, the new contract for difference mechanism will also provide subsidy support to the developer of new nuclear, about which I know other Members have concerns.
Another strand is that the Government will create a capacity market that will seek to ensure the retention of sufficient existing generation capacity and the building of new capacity. The design of the capacity market is still ongoing, so the exact nature of the market in the future is unclear, and we do not know when it is planned to hold the first capacity auction. I believe that it will potentially be in 2014 for delivery in 2018. Then there are the bits about emission performance standards to talk about.
Realistically, though, there is an overall problem with the Bill, which was highlighted by the Opposition’s general agreement. It is a kind of renationalisation of the power sector—very, very nearly. To deliver their policy goals the Government require utility companies and third-party investors to build assets that are fundamentally not economic, often in technologies that are far from robust or mature. The Government have taken upon themselves the responsibility of deciding which generation technologies are bad, such as coal and unabated gas, and which are good, such as hydro or nuclear or wind perhaps. They have also decided the pace of change, that coal should largely be removed from the power matrix by 2024, and that unabated gas should operate only at peak from 2027. They have decided which future technologies should or should not be developed and are pushing forward with a leap of faith on as yet completely unproven technologies, as we have heard before, including carbon capture and storage.
The Bill will take Government intervention up yet another level. Under the powers granted by the Bill, the Department of Energy and Climate Change will allocate contracts for difference to developers in those technologies and at those locations that DECC favours. It will set the strike price and so determine the revenue of the asset, what the consumer pays and the returns on investment. It is very much a centralising measure. I am not convinced that it gives the opportunities for new sources that bubble up, as we might perhaps say in this case.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I beg to move amendment 2, page 192, line 9, leave out subsection (4).
Madam Deputy Speaker (Dawn Primarolo)
With this it will be convenient to discuss the following:
Amendment 3, page 192, line 18, at end insert
‘unless one or more consumers have suffered loss or damage greater than this value.’.
Amendment 4, page 192, line 24, at end insert
‘unless one or more consumers have suffered loss or damage greater than this value.’.
Amendment 5, page 198, line 31, leave out subsection (4).
Amendment 6, page 198, line 40, at end insert
‘unless one or more consumers have suffered loss or damage greater than this value.’.
Amendment 7, page 198, line 46, at end insert
‘unless one or more consumers have suffered loss or damage greater than this value.’.
Luciana Berger
Forgive me for the delay in getting to my feet, Madam Deputy Speaker. I was expecting the Minister to go first—I am so used to coming after him.
Amendments 2, 3 and 4 to part 1 of schedule 14 relate to gas customers. Amendments 5, 6 and 7 to part 2 cover electricity consumers. We are proposing these changes for a simple reason: we need to do everything we can to protect consumers who lose out when energy suppliers break the rules. I sincerely hope that Members on both sides of the House agree about that. My right hon. Friend the shadow Energy Secretary called for a system to guarantee compensation to customers who have been ripped off as far back as October 2011, which is a year and a half ago now, so it is nice to see that the Government are finally following our advice and doing something to give redress to consumers.