Caroline Flint
Main Page: Caroline Flint (Labour - Don Valley)
Mr Davey
My hon. Friend makes a really important point. The Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon) has been working with the industry on the concordat. The statistics that have emerged from the new fuel poverty definitions show, unlike previous ones, that much fuel poverty is in off gas grid areas. When we bring forward the fuel poverty strategy shortly, we will be focusing on off gas grid customers, because they are really suffering, and—guess what?—the previous Government did nothing about it.
Caroline Flint (Don Valley) (Lab)
There are more than 1 million families with children in fuel poverty, which is more than there have been at any point during the past 10 years. If wholesale prices are falling but those reductions are not being passed on to consumers, it is a clear sign that competition is not working. Yesterday, the Government opposed our proposal to give the regulator the power to force energy companies to pass on falls in wholesale prices if they have not done so. If the regulator does not have the power to protect consumers and if the Government will not give it that power, how does the Secretary of State expect the public, particularly the 1 million families with children in fuel poverty, to have any confidence in the energy market?
Mr Davey
The right hon. Lady will remember that yesterday I made it clear that we have real concerns about the energy market. That is one reason why we support the competition inquiry. I made it very clear that we are worried about the fact that when wholesale prices go up, retail prices follow them quickly, which is the rocket effect, but that when wholesale prices come down, retail prices do not come down as quickly—the feather effect. We believe that that has to be addressed. The previous Government had the same problem and they did not address it. We are addressing it.
The problem with the proposed regulation, as I told the House yesterday, is that when we look at the detail we can see that it would fail and would lead to prices going up. It is a bungee-jumping approach to energy prices and it would increase volatility and fluctuations. If the House wants a little more analysis, let me point out that a few months ago wholesale prices were coming down, yet in the past few weeks they have gone up. Are the Opposition saying that they would force energy companies to move directly with daily and weekly moves in the wholesale costs? That is surely madness.
Mr Davey
My hon. Friend is absolutely right. The interest from around the world in the UK’s reformed electricity markets, particularly the world’s first ever low-carbon electricity market, is profound. It is not just the Chinese; there is interest from the French as well as from Japanese companies such as Hitachi and Toshiba-Westinghouse—and not just in nuclear, but across the low carbon piece.
Caroline Flint (Don Valley) (Lab)
The capacity market is meant to help secure our energy supply, but that must be done with as little cost to consumers as possible. There are 15-year contracts for new plant, compared with three-year contracts for existing plant. Will that not create perverse incentives, particularly for the big six, to build lots of new power stations, when it could be quicker and cheaper to refurbish existing plant?
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
I understand the uncertainty that this is causing workers at Kellingley colliery in my hon. Friend’s constituency and at Thoresby colliery in the constituency of my hon. Friend the Member for Sherwood (Mr Spencer). We have been working with the company since January to help it to overcome the challenges that it faces. The exceptional offer we made of a Government loan of £10 million to the consortium that was leading the rescue remains on the table despite the withdrawal of Hargreaves, and we continue to work with UK Coal and its directors to explore what other sources of private investment might be available.
Caroline Flint (Don Valley) (Lab)
As has been said, there is a great deal of concern about the future of jobs at Kellingley and Thoresby pits following the decision by Hargreaves to pull out from UK Coal’s managed closure programme. The redundancy process is already under way, but there may still be time to find a way forward, so could the Minister confirm that the £10 million loan is on the table and that the Government are still exploring all viable options, including an employee buy-out, to secure a future for these pits?
Michael Fallon
The only plan so far presented by the board of UK Coal is the plan from which Hargreaves withdrew last week. If further plans are presented by UK Coal, with which we are working each day, we will, of course, be prepared to ensure that the £10 million loan remains available. If there is a viable plan for an employee buy-out, we will certainly look at that as well.