Annual Energy Statement

Caroline Flint Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Mr Speaker]

We are grateful to the Secretary of State, who has significantly exceeded his time. I gently remind him of the merits of the use of the blue pencil. So far as today is concerned, I must obviously make an allowance in respect of the response from the shadow Secretary of State.

[Caroline Flint (Don Valley) (Lab)]

I thank the Secretary of State for briefing the media about his statement today, before informing either the House or the Opposition. Is it any surprise that he is becoming increasingly rattled by growing opposition from his own Benches to the Government’s cuts in the solar power sector, and has chosen to bring his statement forward in order to squeeze time in our Opposition day debate this afternoon? Perhaps he is also trying to put a gloss on the Government’s energy policy before the energy statistics are published tomorrow—or perhaps advisers or lobbyists with “excellent contacts” with Ministers advised him to bring his statement forward. Whatever the reason, disrespect has been shown to the House today.

The Secretary of State said, “The consumer is at the heart of everything we do.” Will he start by telling us what the Government will actually do to deal with soaring energy prices? Energy bills are up by 20% this year, and standard tariffs rose by £175 between June and November alone, driving up inflation and squeezing household budgets. The Government, however, are so out of touch that their only answer is to tell people to shop around, and their only policy is to cut help to pensioners this winter. Can the Secretary of State explain why, with the end of the Warm Front scheme, for the first time since the 1970s a British Government are not offering grants to help to reduce fuel poverty?

The most effective and sustainable way of cutting bills is to reduce energy use, but the Government’s flagship energy efficiency programme, the green deal, has been delayed and is in chaos. We were expecting the green deal consultation back in September. More than two months later, it has finally appeared, but we are still not clear about what incentives households will be offered to take up the green deal, or what the Government will do to ensure that the 10p rate for a green deal package is low enough to secure the widest possible range of energy efficiency measures and the best deal for bill payers. Can the Secretary of State confirm that the Government’s forecast of the number of jobs to be created by the green deal has been slashed from 100,000 to just 65,000 by 2015?

Earlier this year, my right hon. Friend the Leader of the Opposition set out bold plans to break the dominance of the big six by requiring energy companies to sell power into a pool, thus allowing new suppliers to enter the market, increasing competition, and driving up choice for consumers. Will the Secretary of State explain why he is so afraid of standing up to vested interests in the energy industry, and delivering the reform that our energy market needs?

The green economy currently employs 800,000 people. It is estimated that the global market for low-carbon goods and services will be worth £4 trillion by 2015, with the potential to create 400,000 new jobs, but as a direct result of the uncertainty that the Government have created, the UK is falling behind. Last year, when we left office, it was ranked third in the world for investment in green growth. We are now ranked 13th, behind Brazil and India. That is bad for our economy, bad for our energy security, and bad for the prices that consumers pay, because it makes us ever more reliant on events overseas that are beyond our control.

Just yesterday, the Science and Technology Committee in the House of Lords accused the Government of complacency over the skills required for the nuclear industry. Given that power stations in the UK already import staff from the southern hemisphere to run them, given that many of the firms currently providing solar power are about to go to the wall, and given that British Gas has just announced that 850 jobs are to go, will the Secretary of State tell the House how he plans to halt the worrying decline in investment in the UK?

We look forward to the Government’s forthcoming announcements on how they propose to support energy-intensive industries, and we hope that their proposals will extend to both gas and electricity, but will the Secretary of State tell us exactly how much of the proceeds of CRC are going back into Treasury coffers? Under Labour's scheme, the money was returned to the hands of businesses to be invested in energy efficiency.

We shall have time to deal with the Government’s cuts in feed-in tariffs later this afternoon, but what sort of message does this whole debacle send out? How can the Government encourage investors to support the renewable heat incentive, the green deal or any other green policies in the future, when a growing sector, built on a flagship policy that had cross-party support, has been cut off at the knees with just six weeks’ notice? How can anyone have enough confidence to make the investment that we need when the Government are so short-sighted and so short-term, and chop and change their policies at every turn?

Today’s statement is just more evidence that the Government are out of touch, are cutting too far and too fast, and have no plans for jobs and growth.

[Chris Huhne]

The right hon. Lady asked what we were doing to help those who face substantial increases in energy bills. Over the last year there has been a 38% increase in world gas prices for delivery this winter, and that will inevitably be reflected in both gas and electricity bills. We have tried to protect consumers by taking the renewable heat incentive off the levy system and into general public expenditure, and by taking similar action in relation to carbon capture and storage. We have capped the feed-in tariff, and we are helping the consumer as much as we possibly can.

Far from our being afraid to take on the big six, Ofgem has clamped down on mis-selling, and we have ensured that the big six must inform people before raising tariffs. We have reduced the period within which consumers can switch suppliers to three weeks, and we are considering giving Ofgem powers to require companies to provide redress. All those steps constitute clear evidence of the determination of the Government and Ofgem to make this a highly competitive retail and wholesale market, which is the best guarantee for consumers that they will be given the best possible deal now and in the future.

The right hon. Lady mentioned the Warm Front scheme. She gave us no credit for the fact that the consultation documents on the green deal that were published today clearly show that we are replacing that scheme with the affordable warmth obligation referred to in the ECO consultation, or for the fact that the warm homes discount scheme is now statutory—it is not a voluntary scheme like that operated by the Labour Government—and will make the discounts available to those experiencing fuel poverty two thirds higher than those provided by the old voluntary scheme.

The right hon. Lady asked about incentives. The Chancellor of the Exchequer could not have made it clearer in his Budget speech that he would consider them. I believe that if the right hon. Lady waits for a matter of weeks, all will be made clear in regard to the Chancellor’s commitment to ensuring that the green deal is a great success. She should also bear in mind that we have already provided incentives, in addition to those that the Chancellor is considering. For example, all F and G-rated homes in the private rented sector will have to be upgraded by 2018 so that tenants can enjoy the benefits of energy saving.

Finally, the right hon. Lady asked what we were doing to encourage investment. The whole purpose of the electricity market reform which will be the centrepiece of the energy Bill that we will present in the second Session in May, and which we have already announced in the White Paper, is to provide the certainty that will lead to investment which, for years, the last Labour Government failed to deliver. A quarter of our power stations are going offline in the next 10 years: a quarter of our capacity. What did the last Labour Government do? Nothing—absolutely nothing. Yet the right hon. Lady, seemingly arriving from Mars, has had the temerity to come here today and pretend that we are not taking action, as if the last Labour Government had. I have to hand it to her: for sheer brass neck, she gets the prize.