Energy Price Freeze

Debate between Brian H. Donohoe and David Mowat

Wednesday 6th November 2013 Commons Chamber

[David Mowat]

I am going to talk about progressive versus regressive ways of paying. Let me make the point again that among the 27 countries in the EU, our gas prices are the 26th highest. If a cartel is being operated, it is not a very good cartel. That is not to say that consumers are not in real difficulty now. One of the big issues, and one of the distinctive features of our energy market, is not so much the unit price as the fact that our housing stock is spectacularly poor in terms of energy insulation.

[Mr Donohoe]

The hon. Gentleman is right to say that the prices are lower, but can he explain why in the last few years the increase has been larger than in any other European country?

[David Mowat]

No, I cannot, because I am not an expert on the market. I am merely trying to establish whether the absolute prices that we are paying vis-à-vis our European competitors indicate the existence of a cartel, as has been claimed on many occasions. That does not appear to me to be the case, but someone can always intervene on me—actually, they cannot, because that would be the third intervention and I would not be given extra time, but someone could always discuss the point with me in future.

The fact remains that we have the 26th highest gas prices out of 27 in Europe and we need to be clear about what problem we are trying to solve. The problem that we should be trying to solve is the problem of our housing stock, whose standards need to be raised to the level of the standards in the rest of Europe. Germany’s gas prices are 40% higher than ours, but its gas bills are lower than ours. Why? Because its housing is better insulated and better built.

I have five points to make. My first point is that whatever we decide to do on the basis of the various reviews, we should not reverse the thrust of our policy on insulation. We should not give up on the energy company obligation, the green deal and smart meters. I do not agree with the hon. Member for Brighton, Pavilion (Caroline Lucas) on many issues, but I do agree that far and away the most effective way of making progress on energy in general is to ensure that there is better conservation and more efficiency.

Secondly, we need to make the market work better—

High-Speed Rail

Debate between Brian H. Donohoe and David Mowat

Wednesday 2nd November 2011 Westminster Hall

[David Mowat (Warrington South) (Con)]

I was not expecting to be called. I would have preferred to wait a little before making my speech. I will be fairly brief. I want to touch on the business case figure for high-speed rail, which is estimated at 2.6, including the wider economic benefits. That is considerably higher than the business case of Crossrail. I know that we can all doubt the Department’s methodology, but nevertheless let us put that on the table first.

One of the arguments against the project is whether we can afford it. It costs £32 billion and we are in a time of recession. It is also worth saying that it will cost £2 billion a year, which will kick in more or less when Crossrail finishes. On a cash-flow basis, therefore, it is not too tough. The business case is predicated on capacity constraints. I have some conservative figures here. Over the last decade and a half, rail journeys have increased by around 5% a year. This business case assumes an increase of 1.6% a year. We do not know whether that will happen; it may not, but the figure is certainly not aggressive.

The business case has been criticised because it does not take into account people’s ability to work and be productive while travelling and therefore overestimates the benefit for time saving in terms of economic activity. It has been shown in a number of debates that such a view is false because if these trains are so full that everyone is standing up, no one can work on PCs or anything else. The business case is supported if we assume that.

In his excellent remarks, the hon. Member for Blackley and Broughton (Graham Stringer) talked about the north-south divide, for which this project is not a panacea. However, to say that it will not make a contribution is just fatuous. We have already talked about the pamphlet from Action Alliance—I like to call them the Amersham-based Action Alliance—that came out today. The argument that the benefits would accrue more significantly to the bigger city does not stand up to any kind of scrutiny. It implies that the M6 and the M1 are bad because they fix the north-south divide and I find that hard to believe.

I will not speak about the wider benefits of the project other than to say that the chambers of commerce in the north-west, Leeds and Scotland have come out strongly in favour of these transformative—actually, transformative is not a bad word—benefits. The impact on the north-west economy is calculated to be around £10 billion and we need that. It is easy to unpick the business case by saying, “Actually, my town is not really on the route and it is not too good for my town because we will have to do this and we will have to do that.” The truth is that we have to look at some of these decisions regionally. If £10 billion is injected into the north-west economy, it is just not possible that that will not help Warrington, whether or not Warrington is on the spur.

I have three points for the Minister. One is about timing. Once we accept and buy into the transformation benefits, there is an issue for the north-west in how the Government are going about this. Broadly speaking, Birmingham and the west midlands will receive this infrastructure, in which we all believe, about a decade sooner than Manchester and a further decade before Scotland, which is not even on the map yet.

[Mr Donohoe]

Does that not back up the argument that if this were to be a project that was about to begin, it should start in Scotland and move south, as well as from the south moving north?

[David Mowat]

There is certainly a case for not necessarily starting all the construction work in London and coming north. I do not know whether it should start in Scotland, Warrington or Manchester, but there is a case for going both ways. Let me come back to this timing point. There could be a decade of benefits accruing to Birmingham in inward investment, and a decade of benefits accruing to the west midlands in better links. We are all guilty in this debate of talking about links to London. It is about links not to London but to the continent of Europe through St Pancras. That decade is a worry. Given the current fashion for bringing forward infrastructure projects and the fact that the business case for this project is stronger than that of Crossrail, will the Minister tell us why we are not taking the opportunity to start some of the construction work in the north more quickly? That would take away the problem of the lost decade, which, without wishing to sound as if I lack confidence in our project management abilities, can sometimes turn into a lost decade and a half. Therefore, I am interested in hearing what the Minister has to say about the timing of the project.

We also need to pin down some of the existing uncertainties, especially on the north-south dimension. I may be wrong, but I do not think that it has even been accepted for certain that Piccadilly will be the final destination. That needs sorting out, as does the link to the airport. I do not want to become embroiled in the arguments about having a third London airport, but if we have a high-speed link between Manchester airport and Heathrow—a journey of, for example, 60 or 70 minutes, which would not be much slower than the journey to Gatwick—I find it difficult to see how there will not be some impact on, or some marginal benefit to airport congestion in the south. The whole issue of Scotland needs to be sorted out, at least in relation to the north. We have a plan—a business case—and we are beginning to understand where the route will be. However, I also want some assurance about when the route north of Birmingham will be set out, because we can then start to plan and to put in place the sort of local initiatives that we need to make the whole project work.

Finally, on local initiatives, I was struck by evidence that the north-west is a little different from Birmingham in terms of shape. Manchester and Leeds sit at the bottom of the north-west, which has a much longer shape, so connectivity matters much more, while Birmingham is more central to the west midlands. The northern hub has been mentioned, as has the need for it to be clearly linked with the whole project. I completely agree with that point, but I also agree with those who have said that we cannot just do nothing until everything is sorted. I am keen to hear assurances from the Minister on those three points.

Scotland Bill

Debate between Brian H. Donohoe and David Mowat

Tuesday 21st June 2011 Commons Chamber

[Mr Donohoe]

rose—

[David Mowat]

rose—