Energy Prices
Debate between Caroline Flint and Lord Barker of Battle(10 years, 6 months ago)
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The Minister of State, Department of Energy and Climate Change (Gregory Barker)
This has been a welcome opportunity to debate yet again one of the biggest questions in British politics today, and there have been lively contributions from both sides of the Chamber. Energy bills are at the forefront of everybody’s minds, and the coalition is acutely aware of the impact that a combined heating and electricity bill can have on a family budget. That is why, unlike the 13 long years of Labour drift, dither and dawdling, and ducking a referral to the competition authorities, the four years of the coalition have been characterised by reform, grip and clear direction, with energy consumers at the heart of our agenda. We have passed two Acts in four years and carried out the biggest market reform since privatisation, and a determination from the very top to get a better deal for consumers has translated into action to drive down bills, promote choice, spur innovation and increase competition.
Unfortunately, the Labour Opposition seem to believe that they can make up for the Labour Government’s pitiful lack of action to help customers and total failure to reform the energy market successfully during their period of office by advocating a series of ill-thought-through soundbites and poorly conceived policies that would take the British energy sector crashing straight back to the 1970s. That goes to the heart of the debate on the future of the energy market and the debate that has been rehearsed in the Chamber today.
Do we go forward to a world of empowered consumers, of customers exercising greater choice, of driving healthy competition and of reaping the rewards of market innovation and new technology, or do we retreat three decades, and go back with Labour to a world where the energy sector is entirely run from Whitehall, where prices are set by bureaucrats, where innovation is choked off by regulation and where investors are driven away by reams of anti-business legislation?
At a stroke, Labour’s arbitrary proposals to impose 1970s-style price controls would torch the investment we so desperately need. It would hobble consumer choice and put the clock back decades. Labour’s energy policy is pure British Leyland economics, from the most left-wing Opposition since Michael Foot—[Laughter.] Labour Members can laugh, but Labour’s ham-fisted price controls would create the single-biggest barrier to new entrants and innovation since the industry was denationalised.
The fact is that many Labour Members know that Labour’s policies could not work and are based on nothing more than a shallow soundbite. Like the British public, Labour Members know that the price freeze is a cruel gimmick and a price con. In private, many on the Labour Benches will say exactly that. Rather than help consumers get a better deal, Labour’s price controls would drive up barriers to entry and lock in the big six, created when Labour was last in government. In fact, if Labour Members get their way, I would not be surprised if the big six decided not to stick it out. If Labour wins, Labour’s big six could become the big five or even the big four. Far from being a fix for a broken market, Labour’s prescription is the very antidote to competition.
Caroline Flint
Does the right hon. Gentleman agree with the statement made by his right hon. Friend the Prime Minister in September 2009? Commenting about the fact that reductions in wholesale prices are not passed on to consumers, he said, “The first thing you’ve got to do is give the regulator the teeth to order that those reductions are made and that is what we would do.” Does the right hon. Gentleman agree with what his Prime Minister said in 2009?
Gregory Barker
I make it a policy always to agree with my Prime Minister. I can tell the right hon. Lady what we said in 2009: we called for a competition inquiry. I can also tell her what the current Leader of the Opposition did: he declined it. He ducked it—he was frit. When he was in power, standing at this Dispatch Box, he sang the tune of the big six and ducked a competition inquiry. The British people have had to wait for the coalition for a comprehensive assessment by the competition authorities.
In contrast to Labour’s lurch back to the 1970s, the coalition wants to unleash disruptive new entrants and the exciting new breed of energy entrepreneurs. We do not want to lock in Labour’s big six; we want to replace them with the big 60,000, unleashing British entrepreneurial spirit. In addition, huge steps forward in consumer-friendly technology, coupled with our smart meter roll-out programme, mean that we could be on the threshold of an exciting age of far more empowered consumers and a decentralised energy sector, with a proliferation of new, young companies vying for consumers.
However, the Government do not pretend either that there is not much more to do or that we cannot improve the market further. There is indeed more to be done. Our job is by no means finished. As the Secretary of State clearly pointed out in reply to the opening of the debate, the Leader of the Opposition may have been in denial about the behaviour of the energy companies, failing to pass on falls in the wholesale gas price while he was in office, but we are not. A sensible, objective, dispassionate and thorough investigation by the independent Competition and Markets Authority is the way to get to the bottom of whether customers are being short-changed by energy companies.
Objectively policed and well regulated markets serve the best interests of consumers and deliver substantially and sustainably lower prices, not a return to the failed economic models of the 1970s. That is the nub of the choice before the electorate: break the grip of the big six by unleashing unprecedented competition and innovation, ripping down barriers to entry and unleashing a robust and thorough market investigation; or go the Labour way, suffocating the industry with red tape, driving away competition, snuffing out the challenge from the new entrants, torching investment and wasting valuable years creating yet another Labour quango. It is a pretty simple choice: the future or the past?
My hon. Friend the Member for Rossendale and Darwen (Jake Berry) was clear: we choose the future. He was right to point out that fuel poverty doubled in the last Parliament, when Labour was in office, between 2005 and 2010. He put himself firmly on the side of disruptive new entrants such as Ovo and ambitious 24-hour switching. My hon. Friend the Member for Tamworth (Christopher Pincher) was right to point out that the big six were Labour’s creation. Every time the Leader of the Opposition opines on energy, he drives up the cost of capital, and it is consumers who pay the price.
My hon. Friend the Member for Warrington South (David Mowat) made a thoughtful and well informed contribution, like his previous contributions. Sadly, we have to conclude, like him, that Labour has nothing serious to say. My hon. Friend the Member for Daventry (Chris Heaton-Harris) comprehensively demolished the Opposition policy. He is absolutely right to point out that price controls stifle investment and kill competition.
As for Opposition Members, the hon. Member for Newport West (Paul Flynn) made a rather ideological speech about nuclear power, which contrasts with the pragmatic and considered investment in our nuclear programme announced today by China. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) made a rather sanctimonious speech, but the policies he supports would actually hit the people he professes to help and result in fuel poverty soaring, just as it did during the last Parliament. He is also in denial about the progress we are making. The hon. Member for Llanelli (Nia Griffith) might be sincere in her beliefs, but she is in cloud cuckoo land when it comes to investment. Under the coalition, investment in renewables has gone up sharply. In this Parliament, average annual investment in renewables is up to nearly £7 billion per annum, compared with £3 billion per annum in the last Parliament.
The fact is that the coalition has a plan. We have a long-term economic plan and, what is more, we are delivering for British consumers. The Labour party, by contrast, has not got a clue, and it is British consumers who are paying the price.
Oral Answers to Questions
Debate between Caroline Flint and Lord Barker of Battle(10 years, 9 months ago)
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Gregory Barker
It is slightly misleading to talk about 7 million lofts with inadequate loft insulation. They may not have the full amount of insulation, but the amount that they lack varies significantly.
Gregory Barker
So it is inadequate. We now need to move on, not just to simple measures such as loft insulation, but to a much broader holistic approach to home insulation—whole house retrofits. They are more complex and more expensive, but they also cannot be done just with subsidy. The Labour party has to make a choice. Do Labour Members want to force up consumer bills giving ever more subsidy to a small number of people, or do they want to work with us to create a genuine new market where people are incentivised to pay for themselves?
Energy Company Charges
Debate between Caroline Flint and Lord Barker of Battle(10 years, 10 months ago)
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Gregory Barker
My hon. Friend is right and it is to his credit that he raises an issue that invariably afflicts the poorest and most vulnerable customers. In most cases, however, those on a prepayment meter can switch to a supplier that will not charge them for coming off it. Even if they are on a prepayment meter, they can still switch supplier.
It is important that we do not become carried away with the idea that the only response to getting a better deal for consumers is for Government to intervene with a one-size-fits-all solution. We saw what the result of over-regulation was under 13 years of Labour. Ham-fisted over-regulation does not actually benefit the consumer—it created the big six. We saw real choice for the consumer collapse under the previous Government through ham-fisted inappropriate regulation. The real interests of consumers will be served by a renaissance in competition. Relighting the fires of competition under this market will create real competition between energy companies.
I am glad to tell the House that since the coalition came to power we have seen movement back the other way, correcting the downward slide towards an oligopoly that we saw under the previous Labour Government. We are seeing new entrants to the market and unprecedented switching. In the last two months of 2013, an unprecedented number of customers switched their suppliers, hitting the companies that penalise customers where it hurts. People voted with their wallets and moved to get a better deal. This Government stand for empowered consumers—not just a lucky few, but everyone. We do not want a return to a nationalised industry; we want fair regulation for a fair energy sector.
Caroline Flint (Don Valley) (Lab)
There were plenty of examples in the debate that made it clear that regulations are not being followed on prepayment meters, and that Ofgem is not even using the powers it has. Rather than kicking everything off to the competition review, the Minister should ask Ofgem why on earth it is not enforcing the powers it has. It should stop letting this happen.
Gregory Barker
The right hon. Lady suggests that the competition test, which is new, will be a distant solution and that action is needed in the meantime. The competition test is alive now and we expect the first results shortly. This is not something we are kicking into the long grass; this is live. She raises a legitimate point on prepayment meters, as other Members have from across the House. Do not misconstrue me: this is a serious point and she is right to raise it. The Government take it very seriously.
We also take seriously the crux of today’s debate: are customers who elect to pay by cash or cheque, by standard payment through the post or at the post office, being unfairly penalised for doing so? That is not the same as saying that everybody should pay the same. I am afraid that there may be a genuine difference of opinion on that point. It is not our view that all customers should pay the same. There should be healthy competition, but—and it is a very important but—the differential between paying by direct debit and paying by cash or cheque should be cost-reflective and cost-reflective only. That is a key element of the licence condition under which energy suppliers operate. It is vital that Ofgem looks at that forensically and in detail, and answers to Ministers who have asked whether that is really happening.
Energy Price Freeze
Debate between Caroline Flint and Lord Barker of Battle(11 years, 1 month ago)
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Gregory Barker
It will be different for different people, but from December people will get a much better deal out of this Government, putting them on to the cheapest tariff—something the Labour party did not do in its 13 years in government.
We continue to undo the damage that Labour did to consumers’ bills. We have taken Labour’s renewable heat incentive off energy bills, saving consumers £179. The right hon. Member for Don Valley (Caroline Flint) said in our last debate or at questions that £100 was not very much. I have to tell her that Government Members know that, for a lot of families, £100 is a great deal: that £179 on people’s bills was not welcome.
Caroline Flint
Did I not make the point that the way in which the Government have used green levies misses the point? The point is that wholesale prices have been flat, but the energy companies have marked up their prices and charged us more in our bills. That is what the Government should be addressing, rather than playing around and blaming green levies.
Gregory Barker
If that is the point that the right hon. Lady was trying to make, I accept that, but what Government Members heard was her dismissing £100 as not a great deal of money. We know that for hard-working people it is a great deal of money.
That is why we acted quickly to slash the over-generous subsidies that we inherited from the Labour party for solar and other technologies. The Labour party opposed those cuts. While we have been standing up for consumers, Labour has been sitting down with vested interests.
This debate has been dominated by the systematic demolition of Labour’s price freeze con. However, the most effective critique comes not from MPs, but from the smaller, independent generators that are keen to break into the market dominated by the big six and created by Labour. It is those new entrants that can provide real consumer choice again. They are entrepreneurs who want to compete for the business of our constituents with better prices, better offers and better service.
Energy Prices and Profits
Debate between Caroline Flint and Lord Barker of Battle(11 years, 3 months ago)
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Caroline Flint
No. I am going to make some progress. I shall say more about consumers later, and there will be plenty of time for interventions then. Let me begin, however, by saying something about energy efficiency.
There is agreement on the fact that the best way in which to protect people from rising energy bills is to make their homes better insulated and more energy-efficient. The Government’s flagship programme is the green deal. It replaced the Warm Front programme, which helped more than 2 million families to insulate their homes under the last Labour Government.
Members may recall that the last Secretary of State said that the green deal would help to insulate 3.5 million homes. Clearly a great deal has happened since that statement, and it would be understandable if Members took those words with a pinch of salt. However, the Prime Minister told the House that the scheme would be “bigger and better” than any schemes that had preceded it. It would be groundbreaking, revolutionary, and the envy of countries all over the world. When it was launched earlier this year, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) told Radio 4 that he would be having sleepless nights if fewer than 10,000 people had signed up for it by the end of the year.
Eight months in, how many people have actually signed up for a green deal package? Has the number hit 8,000, or 4,000? Can the Minister look forward to a good night’s sleep before the end of the year? I am afraid not, because so far just 132 people have signed up. Therefore, almost five out of six hon. Members in this House do not have a single constituent who has signed up for the green deal. The saddest thing is that this was all so predictable. For the last three years my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) and I have warned that interest rates of 8% or even 9% would put people off, that hidden charges would put people off, that penalty payments would put people off, but this Government are not good at listening.
The Secretary of State will no doubt claim that it is still early days, and I really wish that were the case. On the latest count over 58,000 people have had assessments. That shows that the public are interested in making their homes more energy-efficient, but the problem is that once they have had their assessment, 99% of people say they do not think it is a good deal and are not signing up.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
There is absolutely no factual basis for that assertion. The latest DECC polling shows that over 70% of people who have had a green deal assessment have said they either have work in progress or intend to or are likely to have work done.
Caroline Flint
The facts speak for themselves. There were 58,000 assessments, but only 132 people have signed up. I am sure Government Members will do their best to defend the green deal this afternoon, but they might want to ask themselves why their constituents do not want it if it is such a fantastic scheme.
Alongside the green deal is the energy company obligation, which is a successor scheme to the obligations on the energy companies that we put in place. Again, in principle it has our support. However, when support for people in fuel poverty has been cut by half, the help that is available should be targeted where it is most needed, yet under ECO 60% of the funding could go to households who can already afford to pay, not to people in fuel poverty. When times are tough and money is in short supply, that is simply indefensible.
Oral Answers to Questions
Debate between Caroline Flint and Lord Barker of Battle
Caroline Flint (Don Valley) (Lab)
On 12 occasions the Prime Minister has promised to force the energy companies by law to put everyone on to the cheapest tariff, but clause 121 of the Energy Bill clearly states that the power to require an energy company to change a customer’s tariff applies only to people on closed tariffs. There are 25.5 million households in Britain. How many are on closed tariffs?
Gregory Barker
I cannot give the right hon. Lady the exact figure off the top of my head, so I will write to her on that. The Labour party is in complete denial. The Prime Minister pledged radical action to put everyone on to the cheapest tariffs for them. We have come forward with a solution and we have put it into law; the Opposition had 13 years to do that and did nothing for consumers. We are taking radical action to cut through the swathe of tariffs that they left consumers when they left office.
Caroline Flint
I have tabled written questions, I have asked Ofgem and now I have asked the Minister, and nobody can tell me how many people will find themselves on a better deal, let alone save money.
Let us look at another promise. On Tuesday, the Secretary of State told the House that the Energy Bill would give Ofgem the power to force energy companies to compensate consumers, something I called for in October 2011. Ofgem is undertaking 15 formal investigations with another 12 cases at informal review stage. Will the Minister confirm that even after the Energy Bill has received Royal Assent and even if there is evidence of wrongdoing in any of those cases, Ofgem will have no powers to force the companies to pay a single penny in compensation to their customers?
Gregory Barker
It is a big pity that the right hon. Lady first started taking an interest in these matters in 2011 and not during the 13 years for which Labour was in government when it did nothing to address those issues for the consumer. I am happy to say that our Energy Bill takes those issues into account and Ofgem will be able to take them into account as the investigations go through. This Government are putting the consumer first after 13 years of inaction from Labour.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I know that my hon. Friend does a huge amount for businesses in his constituency, and I would be happy to meet him, Baxi UK, and representatives of the industry in my Department. The coalition Government are committed to delivering not just cheaper bills but cleaner energy, and biomass boilers are part of that strategy. The good news is that we have recently announced that renewable heat payment vouchers for biomass will increase to £2,000 until March 2014, and later this summer we will provide details for the scheme that we will be launching for domestic renewable heat initiatives next spring.
Caroline Flint (Don Valley) (Lab)
Apparently, more than 5 million homes could still benefit from cavity wall insulation, so there is still a lot of work that could be done.
The Government have claimed it is too early to set a decarbonisation target for 2030, but next month they will publish their electricity market reform delivery plan, which will determine our energy mix and its carbon intensity. In the absence of a legally binding decarbonisation target, will the Secretary of State at least confirm that his long overdue delivery plan will be in line with our legally binding carbon budgets, or will the Government be rewriting the fourth carbon budget?
Oral Answers to Questions
Debate between Caroline Flint and Lord Barker of Battle(11 years, 10 months ago)
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Gregory Barker
Those people should also see reductions; they certainly will not be stranded on previous deadweight tariffs.
Caroline Flint (Don Valley) (Lab)
The Government have claimed that the new energy company obligation will be bigger and better than the fuel poverty and energy efficiency schemes that came before it. Why, therefore, could up to 60% of ECO funding end up going to people who can already afford to improve their homes, and not to those in fuel poverty?
Gregory Barker
The fact is that a minimum of £540 million a year under ECO will be directed towards the fuel poor. That is a minimum; we expect far more to end up in low-income areas as ECO rolls out, and as we upgrade our housing and finally come up with the solution in respect of retrofitting that Labour, in 13 years, failed to offer.
Caroline Flint
The Minister can dodge the question as much as he likes, but the facts speak for themselves. Out of this year’s ECO budget of £1.3 billion, just £540 million will go to people in fuel poverty. That is less than the budget for people who can afford to insulate their own homes, and less than half the support available last year. Is that not why, according to the Government’s impact assessment, ECO is forecast over the next 10 years to lift just 250,000 households out of fuel poverty—50,000 fewer than fell into fuel poverty this winter alone?
Gregory Barker
I remind the right hon. Lady that, while she was in government as a Minister, fuel poverty rose from 2 million to 5.5 million. This Government are committed to doing something about it. Rather than crying crocodile tears, perhaps she should recognise that that £500 million-plus is the absolute minimum we are spending on the fuel poor. We expect to spend a lot more.
Oral Answers to Questions
Debate between Caroline Flint and Lord Barker of Battle
Gregory Barker
We are very confident that we have the right framework in place to deliver the new nuclear build programme on time as anticipated as part of our energy road map.
Caroline Flint (Don Valley) (Lab)
The Minister says that the reason the Government cannot set a decarbonisation target is that the fifth carbon budget, which covers 2030, will not be set until 2016, but the third and the fourth carbon budgets, which run till 2027, have already been set. If that is the only objection, why does the Minister not use the power in the Energy Bill, end the uncertainty and set an interim decarbonisation target for 2020 or 2025?
Gregory Barker
I know that the right hon. Lady and the Opposition love a target and would love more targets, but everyone is agreed that what we want is certainty, not targets. We want a simple architecture. Overall, there are too many targets. What we need is real clarity to be certain that we deliver against those key targets. As I said, we are open-minded about the issue of a decarbonisation target, but we want to assess it at the right time.
Caroline Flint
If that is the best answer that the Minister can provide, it is no wonder that the DECC team loses out time and again when faced with arguments from the Treasury. Not only have the Government failed to set a decarbonisation target, but we have seen the blocking of the appointment of David Kennedy as permanent secretary, and now they are proposing a gas strategy that would blow a hole through our climate targets. Before the last election, the right hon. Gentleman told Members that the Conservatives
“attach the highest importance to the full implementation of the Climate Change Committee’s recommendations”––[Official Report, Climate Change Public Bill Committee, 24 June 2008; c. 60]—
and that the Conservative party in government would implement the advice in full. Will he confirm today that if the Government opt for 37 GW of new gas, as their strategy proposes, for the first time ever Ministers would have to reject advice from the Committee on Climate Change and rewrite the fourth carbon budget?
Gregory Barker
The right hon. Lady clearly does not understand the difference between sensitivity modelling, which shows a whole range of potential outcomes, and a Government plan going forward. She should look at our central forecast. I can assure her that we take the advice of the Committee on Climate Change extremely seriously, but we are delighted that as a result of the publication of the Energy Bill, we now have the certainty that was not there a couple of weeks ago, and industry is speaking up in a chorus of approval of the steps that this coalition Government are taking. We will deliver a transformation in the UK energy sector and the market will deliver the billions and billions of pounds of investment to make it happen.
Oral Answers to Questions
Debate between Caroline Flint and Lord Barker of Battle(12 years, 1 month ago)
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Caroline Flint (Don Valley) (Lab)
A year ago today, the Government announced their first round of cuts to the feed-in tariff for solar power. As instillations flatline, Ministers have clung to the line that their plans will allow 4 million homes to be solar powered, with 22 GW of solar to be installed by 2020. Will the plan for 22 GW, which was announced in April, still be the Government’s policy when they publish their renewable road map, or does he now accept that, because of his cuts, Britain will not reach that target for at least another 30 years?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I do not know whether the right hon. Lady is deliberately misunderstanding what was said or whether she just did not grasp it in the first place. What we said about deployment rates is that we have the potential to deploy 22 GW if we can continue to drive down the cost of solar.
Gregory Barker
Yes, I did, but there was a little more context to it. If the right hon. Lady stopped muttering and rabbiting on, she would hear what I am saying. If she would like the answer, 22 GW is certainly our ambition, but in order to meet that ambition we need not just deployment, but deployment at a level that the country can afford. That is what we are about on the Government Benches—delivering renewables at a rate that the country can afford and that delivers good value to consumers, as opposed to the open handed, open cheque book, high-cost model deployed under the Labour party.
Cost of Living
Debate between Caroline Flint and Lord Barker of Battle(12 years, 7 months ago)
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Caroline Flint
We have not seen much of the Secretary of State since he took up his post. If that is the best he can offer after a number of absences from the Chamber, I worry about this Government and their handling of one of the most important areas for consumers and for jobs.
It is absolutely true that in reshaping the energy market to provide a low-carbon future, there are pressures. We have never denied that. However, today we are talking about the efforts to make the energy market more competitive; how we can ensure that a trail of energy companies is not investigated for mis-selling and dodgy dealing; and the increasing number of families who, under this Government, are paying more than they need to. The Government are stepping away from any responsibility to help the most vulnerable people in this country to tackle their fuel bills and keep their energy consumption down. It is possible to have policies on that, while recognising that there are pressures in the bigger scheme of things. It is a given that there are pressures—it is what a Government do about them that counts. This Government are doing nothing at all.
In government, we put tough obligations on all the big energy companies to use some of their profits to help poorer customers in deprived areas make their homes more energy-efficient. The community energy saving programme was meant to help 90,000 households. Two and a half years into the scheme—most of it under this Government—and with only a matter of months left, just 30,000 households have been helped. What are the Government doing about that? As far as we know, they are doing absolutely nothing.
We do know that the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle, had a meeting with all the big energy companies on 1 February this year. We also know that the energy companies are lobbying the Government to relax the obligations on them or to push back the deadline. The Minister refuses to tell us what exactly was discussed at the meeting, what was agreed and whether he has caved in to the companies’ demands. Why will he not tell us that? He will not share with us—
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Will the right hon. Lady give way?
Caroline Flint
No, I will not give way before I inform the House of the reason that the Minister has given me. He will have to wait a second. Tell me if this is wrong—
Caroline Flint
Thank you, Mr. Speaker. When I asked the Minister precisely why he could not tell us what was discussed at the meeting and what had been decided, he replied that he could not because it would “prejudice the commercial interests”—presumably of the big energy companies. That is a direct quote. I find it hard to believe that the big six energy companies are revealing, in front of each other—apparently, they are competitors—information, so sensitive that it would prejudice their commercial interests, about why they are not on target to meet their obligations to help people with their fuel bills and energy efficiency.
Gregory Barker
What we said is that we could not give the minutes of the meeting, but I can tell the right hon. Lady extremely clearly that I made it absolutely, perfectly clear that we expect the companies to fulfil all their obligations, we are not backing down and we will continue to hold them to account—unlike the previous Government.
Caroline Flint
I listened very carefully to that intervention, but I still do not understand why the hon. Gentleman said to me that he could not share the minutes because it would “prejudice the commercial interests”. I am interested to know what commercial interests were in the minutes of that meeting. I find it hard to believe that any of the six companies would discuss such sensitive information in front of each other.
Gregory Barker
The right hon. Lady will know that no minutes of any meeting were ever shared under the previous Government. We do not release minutes. However, I tell her again, very clearly, that we are holding the energy companies to account, we fully expect them to deliver their obligations and we will make sure that they do.
Jobs and Growth in a Low-carbon Economy
Debate between Caroline Flint and Lord Barker of Battle
Caroline Flint
Well, it took the Government 18 months to give six weeks’ notice to the industry, but the truth is that Labour always said that this scheme and others that support fledgling sectors need to be reviewed and that prices will change and come down, but not in the way the Secretary of State and his predecessor indicated. It caused mayhem in the system and has left other business investors in green technologies questioning whether they should dip their toe in the water. The fact is that the Minister is now offering pie-in-the-sky predictions of the UK overtaking Germany in solar capacity by 2020. He needs to get real. Just how can he cut support for solar power by 70% in six months and still expect to overtake Germany by the end of the decade?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I most certainly have not said that. Would the right hon. Lady care to tell me when I said it and what her source is?
Caroline Flint
When we last discussed the issue, on an urgent question, the hon. Gentleman suggested that we were aiming for something like 22 GW of solar power by 2020, but then again we cannot always take what he says—
Caroline Flint
No, I will not—[Hon. Members: “Ah!”] When I am in the middle of answering one intervention, I think that I should be allowed to complete it before I take another one. I know that the hon. Gentleman gets very excited on these occasions, and that it makes his hair even curlier than it is already, but the truth, I understand, is that today he has already had to revise down some of his statements about the cost of solar. So, again, we will go back and look at the issue, but I am happy to write to him with chapter and verse on some of the things that he has said over the past six months which have been changed on many occasions.
Gregory Barker
The right hon. Lady is absolutely right: I did say that our ambition is now 22 GW of solar energy by 2020. But if she was on top of her brief she would know that there is already 28 GW of installed solar in Germany, so would she like to apologise and retract her statement?
Caroline Flint
If the hon. Gentleman’s ambition is not to be as good as Germany, that is one thing, but one thing is for sure: his efforts over the past six months have certainly not put us in a position to get anywhere near Germany’s aspirations. I should be very interested to see the detailed plan of how he expects us to reach 22 GW, given what he has done to the solar industry in just a short space of time.
Feed-in Tariffs
Debate between Caroline Flint and Lord Barker of Battle(12 years, 10 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Caroline Flint (Don Valley) (Lab)
(Urgent Question): To ask the Secretary of State for Energy and Climate Change if he will make a statement on the Government’s reforms to feed-in tariffs.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I am sorry that the Secretary of State cannot be here today. He is in Cumbria opening the world’s largest industrial offshore wind farm—another big step forward in the deployment of renewables under this coalition Government.
The Government have today announced ambitious plans to ensure the future of the feed-in tariffs scheme and make it more predictable. The reforms will lead to a bigger scheme, providing better value. The feed-in tariffs scheme provides a subsidy, paid for by all consumers through their energy bills, to enable small-scale renewable and low-carbon technologies to compete against higher-carbon forms of electricity generation. The unprecedented surge in solar photovoltaic installations in the latter part of last year, owing to a 45% reduction in estimated installation costs since 2009, has placed a huge strain on the feed-in tariffs budget. That threatened the Government’s ability to roll out small-scale low-carbon technologies over the next few years in the numbers that we had wanted. We therefore acted as swiftly as possible to respond to the threat, through the changes we are now making to the tariffs for solar PV. Today is a turning point for the feed-in tariffs scheme.
Gregory Barker
The right hon. Lady might care to listen, because she clearly knows nothing about it. Rather than cackling, perhaps she will just listen for a change. The Opposition asked for a statement and I am giving it.
We have looked at the feed-in tariffs budget and made the most of the flexibility available under the levy control framework to ensure that we can keep the scheme going, but we want to do much more. The reforms I am announcing today are designed to make that budget go as far as possible to maximise the number of people able to benefit from feed-in tariffs. With the new reform package, we aim to give plenty of TLC—transparency, longevity and certainty, which were absent from the old scheme that we inherited from Labour. The reforms will provide greater confidence to consumers and industry investing in exciting renewable technologies, such as solar power, anaerobic digestion, micro-CHP, and wind and hydro power.
Instead of a scheme for the few, the new, improved scheme will deliver for far more people. Our plans will see almost two and a half times more installations than was planned by the Labour Administration, and that is just by 2015. That is good news for consumers and good news for the sustainable growth of the industry. We are proposing a more predictable and transparent scheme, as the costs of technologies fall. That will ensure a long-term, predictable rate of return, which will closely track changes in prices and deployment. Make no mistake: this will be a challenging package. The tariff degression mechanism that we will propose will not allow for fat profits or excessive rents, but it will show a serious ambition. Under our new plans, we believe that by 2020 we could see up to 20 GW of solar installed in the UK. That is a huge increase in our ambition for decentralised energy. This coalition wants to see a bright and vibrant future for small-scale renewables in the UK, in which each of the technologies is able to reach its potential and get to a point where it can stand on its own two feet without the need for subsidy, sooner rather than later.
In opposition, we promised a decentralised energy revolution, bringing power to the people. Today we take a huge stride forward to making that dream a reality.
Caroline Flint
I understand that the Minister was due to give a press conference at his Department at 11 am to announce his plans for feed-in tariffs. I hope that Her Majesty’s Opposition have not inconvenienced him too much by forcing him to come to this House to defend his plans. Nor will it have escaped the House’s notice that, faced with the first opportunity to deal with this chaotic policy, the new Secretary of State has ducked the challenge and gone AWOL. I do not think that is a particularly encouraging start. I received a copy of the Government’s statement only 20 minutes ago, so we shall have to look closely at the details of the announcement.
Last night, the Minister tweeted that he had an ambition for 22 GW of solar capacity to be installed by 2020. That is all very well, but not if his policies do not get us anywhere near the figure. Will he confirm that he is today proposing a further cut in the tariff level for solar power to 13.6p from July of this year? That would be a 70% cut in six months, which would be out of all proportion to the falling costs in the industry.
The Minister mentioned the analysis that his Department had commissioned, but will he confirm that the study was commissioned on 10 January and asked to report back just three days later? In those three days, how many businesses were consulted? Will he also tell us whether his plans will result in a contraction in the solar industry in the next four years and cause people to lose their jobs? The Minister tried to claim that his original plans would create an additional 1,000 to 10,000 jobs in the solar industry, but we have found out that that was the total number of jobs that the industry would support, not the additional number of jobs, which would in fact mean 15,000 to 20,000 job losses. I suppose that he will try to tell us that even deeper cuts will create even more jobs.
For months, I have warned that the Government’s plans to change the eligibility criteria would exclude nearly nine out of 10 families from having solar power. Moving the energy efficiency requirement from band C to band D is a welcome retreat, but will the Minister tell me how many people will still be excluded from having solar power, and how much they will need to spend on improving their property before they meet the revised eligibility criteria?
Finally, one of our deepest concerns with the Government’s proposals is that they will exclude everyone in social housing and community groups from having solar power. What have the Government done to enable people in social housing and community organisations to access solar power? More than 80% of the people who responded to the first consultation told the Government that they had got it wrong. The appointment of a new Secretary of State was an opportunity for them to change course. Today, we can see that they have failed to take that opportunity.
Gregory Barker
I am sorry that the right hon. Lady constantly sees the glass as being half empty, and carps at a very ambitious scheme that will be very good news for the industry. She clearly wants to invest her political capital in failure. If she looks at the consultation, she will see that we are proposing a further cut in the tariff for solar power. She mentioned one of the options, but there are actually three. The proposals for smaller schemes, which typically involve installations on the roofs of average homes, include the options for 16.5p, 15.7p and 13.6p. We will consult on those options. She clearly does not understand the big dynamic that is driving down costs. We welcome the fact that costs are coming down, and we are determined to ensure that tariffs come down with them. If she wants to stick to, and defend, the old scheme, she is welcome to do so.
I welcome the right hon. Lady’s acknowledgement that we listened to the consultation—that rarely happened under her Government—and that we are going for band D. More than 50% of homes in Britain already meet the band D criteria, and, when the green deal is launched in the last quarter of this year, everyone in the country will be able to access measures to improve their home at no up-front cost. We have also announced today that we are going to consult on a community scheme, which the Labour Government failed to introduce when they launched this programme. For us, communities are at the heart of the renewable energy revolution, and we want to do far more to encourage and enable communities to come together to generate low-carbon and renewable energy. We expect to be able to achieve exactly that under this scheme, which will be bigger and deployed to give better value for consumers and householders.
Oral Answers to Questions
Debate between Caroline Flint and Lord Barker of Battle(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
My hon. Friend is a little bit confused. Biomass and other forms of renewable heating or electricity generation have nothing to do with the green deal, which is an energy efficiency roll-out that will reduce the amount of electricity and heating required in homes, but I will certainly be happy to look at her ideas.
Caroline Flint (Don Valley) (Lab)
According to an answer that I received to a question just the other day, the underspend is actually £32 million, so it has gone up. We all know that soaring energy bills are contributing to the cost-of-living crisis afflicting millions of families. Millions of pensioners over the age of 75, who are the most susceptible to the cold weather and the least able to access the advantages of online energy deals, pay more for their electricity and gas than they need to. Surely it is only fair that energy companies should guarantee that elderly customers over the age of 75 should be placed on the cheapest tariff for their gas and electricity. Will the Government ensure that the energy companies have access to the data that they will need in order to achieve that?
Gregory Barker
As I said earlier, the number of tariffs proliferated by 75% in the last three years of the Labour Government, when they had the opportunity to do something about this. We actually want everyone to be on cheaper tariffs, but there is lots to do, because of the appalling inheritance from the last Government. We want everyone to get a good deal, not just the over-75s, and we are taking action to make that happen.
Energy Prices
Debate between Caroline Flint and Lord Barker of Battle(12 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Caroline Flint
It is always very helpful to hear of real examples. We have listened to many smaller businesses in this sector of course, but even the big six energy companies have concerns about the way the Government have gone about changing the rules on solar. Sadly, about 100,000 social homes may not get solar in the future because of these changes. We all agree that the tariff should come down, but, aside from that point, if the Government’s plans go ahead, people will only be able to have solar if their home is a category C residence in terms of efficiency, and therefore about nine out of 10 homes in England will no longer have the option of having solar even under the changed rules and tariff. This is another example of bad management of a project that was clearly popular among the public and that has created jobs—the sector is one of the few that has experienced growth.
In the long run, we know that the most sustainable way for people to cut their bills is for them to use less energy.
“Energy efficiency is a no-brainer because it makes homes warmer and cheaper to run.”
Those are not my words; they are the words of the Secretary of State from back in September, but what has actually happened on his watch? The number of families getting help to insulate their homes or make them more energy efficient has plummeted.
Let us take the month of April as a point of comparison. In April 2010, the month before the general election, more than 15,000 households got insulation measures through Warm Front. In April 2011, just six households got insulation through Warm Front—not 6,000, 600 or even 60, but just six. The Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), has said that this year he expects 50,000 households to get help with insulation through Warm Front, but so far fewer than 15,000 properties have been helped—not even a third of what the Minister promised. On the current trend, fewer than 20,000 households will get help with insulation this year, a fall of more than 90% on what we delivered in our last year in office.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Unfortunately, the right hon. Lady is making completely the wrong point. Warm Front does not deliver insulation; it introduces heating systems for people who do not have heating systems. Insulation is primarily the responsibility of CERT, the carbon emissions reduction target, and CESP, the community energy saving programme. Warm Front is not primarily an insulation programme. Perhaps she would like to try again.
Caroline Flint
Well, I have to say that some of my constituents have had help with things such as boilers, heating and also insulation.
Oral Answers to Questions
Debate between Caroline Flint and Lord Barker of Battle
Gregory Barker
The reference date of 12 December is what we are consulting on, but the changes that we are proposing would not actually kick in until the beginning of April. We had to choose a date that we thought fair to allow people who had contracts in the pipeline to complete those contracts, but without allowing sufficient time for people to enter the market who were not already engaged in the process, and we chose April.
Caroline Flint (Don Valley) (Lab)
We all know that the Government’s consultation, which will last half the normal length of time and close after the cuts have already come into effect, is a sham. Because of the Government’s rushed changes to the feed-in tariff, which go too far, too fast, thousands of jobs are at risk. Last night, 4,500 staff at Carillion were warned that their jobs could go, but this morning the Secretary of State told the “Today” programme that he did not recognise that estimate, and that the cuts and job losses that he will cause were just a “sensible course correction”. Does the Minister believe that causing unemployment on that scale is a price worth paying?
Gregory Barker
It is so interesting how the right hon. Lady comes to the House with such inconsistent messages. One moment she wants to protect the consumer, the next she wants to push high costs on to consumer bills without a thought for the fuel-poor. The fact is that we are doing our best to contain a bubble caused by the ineffective scheme that her Government set up. We will put the industry back on a sustainable footing and do the right thing by the consumers whom she has conveniently forgotten.
Caroline Flint
Sorry excuses for a disastrous policy. I think it is 60p on an annual bill—in fact, in answer to a parliamentary question last week we were told that it was only 21p on the annual bill from 2010 to 2011. The fact is that the Minister’s cuts will hit families trying to protect themselves from soaring energy bills, put thousands of jobs and businesses in jeopardy and give the lie to the Government’s promise to be the greenest Government ever.
Last week, we read reports in the press about a meeting in the Minister’s Department between officials and the solar industry, in which officials said that the cuts to feed-in tariffs were part of a deliberate policy to kill off the solar industry. Will he come clean today and say that that is not his policy? If not, even at the eleventh hour and despite the damage that has been done, will he change course to enable solar to be put on a real sustainable footing for the future?
Solar Power (Feed-in Tariff)
Debate between Caroline Flint and Lord Barker of Battle
Caroline Flint
I shall make a little more progress before giving way.
Myth No. 5 is the idea that the Government’s plans are just like what has happened in Germany. Nothing could be further from the truth. The German Government invested €6.5 billion in solar last year; we are investing £860 million over four years. Germany has installed half the solar panels in the world and supports 250,000 jobs in solar; we have installed just 90,000 panels and have only one tenth of the jobs. This year the tariff for solar power in Germany was cut by 15%, in agreement with industry and only after installation levels reached a fixed benchmark: here the Government have announced a cut of more than 50%, with no proper consultation and only six weeks’ notice, which will take our solar tariff below that of Germany.
None of the Government’s excuses will wash, because the truth is that their cuts to the feed-in tariff for solar power are a triple whammy. They are bad for jobs and growth, bad for the public and bad for the environment.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The right hon. Lady is right to say that the German Government are reducing the tariff by a much smaller amount. In January they are reducing it by about 15%, but they are reducing it to €0.24, which is almost exactly equivalent to the 21p tariff that the Government propose. They are reducing the tariff to the same level as ours.
Caroline Flint
Dearie me! The Germans have been planning how to staircase down their tariffs for years. They have a mature industry that is the world leader. We are not in that ballpark. That is why we must ensure that we do not strangle our industry at birth.
The cuts are bad for jobs and growth, bad for the public and bad for the environment. When growth is flatlining and unemployment rising, solar is one industry that is growing and creating jobs. When the previous Government introduced feed-in tariffs, just 3,000 people were working in 450 firms; today more than 25,000 people work in 3,000 companies. By 2020, as many as 360,000 people could be working in solar—but not if the Government’s cuts go ahead. Be in no doubt that the Government’s current plans will strangle the solar industry and cost thousands, if not tens of thousands, of jobs.
A survey conducted by the Renewable Energy Association and the Solar Trade Association earlier this month forecast in excess of 10,000 job losses. Fifty-seven per cent. of companies anticipate having to lay off at least half their current staff, a third are worried that their business will be forced to close altogether, and fewer than one in six are confident that they can weather the changes. That is the reality.
Caroline Flint
I want to make some progress, because I am conscious of time and lots of people want to speak.
For every job in the solar industry, many more in the supply chain are also at risk. According to the Minister’s colleagues in the Department for Business, Innovation and Skills, the solar industry and its supply chain employ about 39,000 people and resulted in nearly £5 billion of sales last year. All of that is in jeopardy. Sharp Solar, which was mentioned by my hon. Friend the Member for Alyn and Deeside (Mark Tami) and which is in the constituency of my hon. Friend the Member for Wrexham (Ian Lucas), currently employs about 500 people at its plant manufacturing solar panels. It is now warning that because of these cuts it is reviewing its presence in the UK, putting hundreds of jobs on the line. Given that we need to invest up to £200 billion in our energy infrastructure in the next 10 years, how can anyone have confidence in a Government who are so short-sighted that with just six weeks’ notice they are killing off a flagship policy that has cross-party support?
Gregory Barker
Before the right hon. Lady scaremongers any further, may I confirm that I spoke to the European head of sales at Sharp yesterday, and it has no plans to close its UK plant? It remains an important centre of European manufacturing.
Caroline Flint
Such companies are worried about the policies on the table, and they will be waiting with bated breath to see what happens. There are containers full of panels on our docksides all round the country not being used because sales orders are being affected by the Government’s policies.
Since we introduced feed-in tariffs nearly 90,000 families have benefited. That has helped those who want to do the right thing and green their homes, while also trying to protect themselves from soaring energy bills. However, under the Government’s plans nearly nine out of 10 households in England will be excluded from solar power and denied the chance to get just a little more control over their energy bills. That is because properties will be eligible for feed-in tariffs only if they have a minimum energy performance rating of C or above.
Feed-in Tariffs
Debate between Caroline Flint and Lord Barker of BattleUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Caroline Flint (Don Valley) (Lab)
(Urgent Question): To ask the Secretary of State for Energy and Climate Change if he will make a statement on the Government’s proposals to reform feed-in tariffs.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Since the feed-in tariffs scheme started, it has been successful in encouraging people up and down the country to get involved in local, clean green energy generation. Solar photovoltaic has led the way, and more than 100,000 homes now generate their own electricity. It is a very attractive technology to install, driving forward the coalition’s ambitious, decentralised energy agenda, but let us be clear: the current returns now available on solar PV investments, funded by energy consumers through our energy bills, are unsustainable. Falling PV costs mean that returns are at least double those originally envisaged for the scheme. This does not provide value for money to consumers. If we do not act now, the entire £867 million budget for the current spending review period would be fully committed within the next few months. That would limit the number of people able to benefit from feed-in tariffs.
We are therefore consulting on new tariffs for solar PV installations. Owing to the urgency involved, we propose that the new tariffs would apply to all new installations that become eligible for FITs on or after a “reference date”, which we propose should be 12 December. We are also seeking views on other proposals, including one to strengthen the link between feed-in tariffs and energy efficiency. It cannot be right, and it is a fault of the system that we inherited, that we subsidise renewable energy generation on energy-inefficient buildings.
We are determined to secure the continued success of feed-in tariffs through sustainable growth, not boom and bust. We are consulting on new tariffs for solar PV to secure the FITs budget in the interests of all eligible technologies and to bring greater coherence to the Government’s ambitious policies to green Britain’s homes.
Caroline Flint
Thank you, Mr Speaker, for forcing the Government to come to the Commons today. With thousands of jobs and businesses at risk, it was rather a surprise that the Government wanted only to issue a written statement. It is a shame that the Secretary of State for Energy and Climate Change could not spare the time to be here.
Today’s announcement is yet another example of a Government who are out of touch, are cutting too far and too fast, and have no plan for jobs and growth. Last year, the solar industry employed 3,000 people in 450 businesses. Today, it employs 25,000 people in 3,000 businesses. With growth flatlining everywhere else, today’s announcement threatens to strangle at birth the solar industry. It is a kick in the teeth for families who want to do the right thing by investing in solar. The new proposals guarantee that lower-income households will lose out, as fewer firms offer the lifetime deals that are currently available, and that solar will be available only to the well-off.
The Minister claims that installation costs have fallen by 30%. That is partly, I would argue, because of the mass, bulk investment in this new industry. If that is so, why have the Government reduced the tariffs by more than 50%? With a new rate of 21p per kWh, how many jobs and businesses have been put at risk? The UK has installed only 3% of the solar energy installed in Germany in the past two years. Is that the level of the Government’s ambition—3% of German productivity?
The Minister claims that the current scheme could add £26 to domestic electricity bills. The fact is that this Government’s failure to stand up to the powerful vested interests in the energy industry has led to £175 being added to bills in the past six months alone.
Will the Minister tell us why, when the consultation is not due to finish until 23 December, the cut-off point for eligibility under the existing scheme is 12 December? What does he say to people who have already commissioned domestic solar power systems and paid a deposit, but who, through no fault of their own, will not manage to install, certify and officially register them by 12 December?
Labour started the process of feed-in tariffs and we remain proud of it. It may have needed adjustment as costs fell, but the coalition has messed around with it repeatedly, given out mixed messages and left 25,000 workers in a high-tech industry of the future facing the dole. In opposition, the Conservatives promised a more ambitious scheme; today’s announcement is just another broken promise.
Gregory Barker
This is rather extraordinary, because there has only ever been one substantive vote on feed-in tariffs in the House of Commons. Everyone on this side of the House voted in favour of feed-in tariffs. The right hon. Lady and all her hon. Friends voted against them. Will she apologise because the last Labour Government had to be dragged, kicking and screaming, into setting up a feed-in tariff system? Not only that, but they so begrudged it that they set up the worst scheme that they could imagine. The amount of detail that was wrong and the scandalous way in which it was set up by the now Leader of the Opposition were disgraceful. The faults that we are rectifying were created by the previous Government.
The right hon. Lady says that we are out of touch. We may be out of touch with the solar lobby, but we are not out of touch with energy bill payers. She says that they are groaning under a £175 increase, but she wants to put that up. If we did not act now, consumers would face massive increases in energy bills. Today, she has come to the House with a different face on and she does not care about the cost that she proposes to add to energy bills. If energy bills go unchecked, it would add around £1 billion a year—that might be small beer to Opposition Members, but Government Members understand just how much strain energy consumers are under.
The right hon. Lady talks about the level of ambition. We know that had the previous Government had their way, there would be no ambition, because there would be no feed-in tariff scheme. The only reason we have a feed-in tariff scheme is that the Labour Government were defeated in the House of Lords by Liberal Democrats and Conservatives united.
The new tariff that we are proposing to pay is on a par with the tariff paid in Germany. Across Europe, the cost of solar subsidy has been falling. It is a real shame that the right hon. Lady is rushing to make partisan points rather than engaging in a sensible discussion on how we get the best value for money out of the feed-in tariff scheme. We have £867 million. We want it to be spread as widely as possible; she wants it to be enjoyed by the lucky few. Bumper double-digit returns of 10% or 15% for those lucky enough to install panels is disgraceful when people are lucky to get 1%, 2% or 3% at the building society. The Government are recalibrating the return on feed-in tariffs to the level—similar to 5%—that was originally intended. I am afraid that the right hon. Lady is the one who is out of touch.
Finally, the right hon. Lady asks why eligibility will start from 12 December. It is very simple. Were we not to do that, and were we to announce a change now and leave the current arrangements in place until next April, there would be a massive gold-rush, and the entire budget for feed-in tariffs—the entire £867 million—would be gone by then. The last people from whom we should take lessons on how to manage a budget are Labour Members.