Charles Hendry
Main Page: Charles Hendry (Conservative - Wealden)
Mr Jim Cunningham (Coventry South) (Lab)
3. What assessment he has made of recent trends in energy prices.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Department of Energy and Climate Change publishes estimates of retail energy prices in our “Quarterly Energy Prices” publication. In general, in line with wholesale costs, most prices have gone up in recent years. However, domestic gas and electricity prices have recently both been cut by just over 2%, although prices will still be up by about 15% for gas and 8% for electricity compared with a year earlier.
Mr Cunningham
Is the Minister aware of the Big Switch campaign to reduce the energy bills of thousands of people through collective purchasing, and does he support it?
Charles Hendry
We most certainly do. No one in the House has done more for collective purchasing than my right hon. Friend the new Secretary of State. This is a trend that we are very keen to encourage, as it will help consumers dramatically by enabling them to switch effectively. It will form an important part of a functioning market.
Mark Pawsey (Rugby) (Con)
Industries using large amounts of energy—such as Cemex, which manufactures cement in Rugby—are concerned about the relatively high energy prices here compared with other parts of the world. Will the Minister update the House on the steps being taken to ensure that the energy prices paid by British industry remain competitive?
Charles Hendry
My hon. Friend makes an extremely important point, which is relevant to Members on both sides of the House. What the Chancellor announced before Christmas was a package of about £250 million to support energy-intensive industries. More detail is being published this week, and there is a call for evidence so that we can see exactly what support is required for which industries.
Mr Mike Weir (Angus) (SNP)
It is not just gas and electricity prices that are rising, as those off grid who use refined oil as a home fuel are having a bad time of it. Given the increasing concentration in that market, has the Minister given any thought to making direct contact with the suppliers to see whether they will identify and offer assistance to vulnerable groups within their client base?
Charles Hendry
The hon. Gentleman raises an interesting point. The Office of Fair Trading looked into this market last year. It was evident in the previous winter that the system had not worked as well as it should have done. We are seeing increasing centralisation of ownership. The OFT has said that it is willing to look again at examples of market failure, and it has asked Members of Parliament to submit evidence to it of where that might be happening.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
4. When he expects energy companies to secure investment for new nuclear power stations.
Simon Hughes (Bermondsey and Old Southwark) (LD)
6. What steps he is taking to promote competition in the energy market.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
We are working with Ofgem to deliver clearer bills and simpler tariffs, to help consumers engage effectively in the energy market. We have cut red tape for small suppliers to help them compete, and we are looking at Ofgem’s recently published proposals to increase liquidity in the wholesale market.
Simon Hughes
When Ministers and I were in opposition and Labour was in power, we spent much of our time trying to get the Labour Government to make sure energy companies understood the simple principle that when energy prices went up they were justified in increasing prices to our constituents, but when those prices went down they should also bring their prices down for our constituents. Will the Minister assure us that the Government will force Ofgem and the energy companies to understand the rule that consumers must benefit when prices go down, just as they are penalised when they go up?
Charles Hendry
Ofgem is already working on this issue. Indeed, its proposals for much greater clarity and for a much simpler range of tariffs are a core part of achieving in this area. In the course of that, it will ensure that consumers find it much less confusing to switch and can see whether they are getting a better deal, and that is a very important part of making this market work properly.
Dr Alan Whitehead (Southampton, Test) (Lab)
Does the Minister have a timetable for the agreement on who will be the counter-party for the contracts for difference under the proposals for electricity market reform? If not, how will he resolve the issue in time for legislation to be put before this House?
Charles Hendry
As the hon. Gentleman knows, we published a technical update for the market reform proposals before Christmas, which set out how we would work with companies that need to make final investment decisions this year to help them identify the strike price under the market reform proposals. We recognise that legislation needs to go through Parliament and we are looking to achieve that in the next Session, but we are also clear about the fact that early decision makers need to have that clarity and we have committed to making sure they have it.
Caroline Flint (Don Valley) (Lab)
Clearly, electricity market reform must improve competition in the energy market. The Minister told the Select Committee that
“we need to get legislation through as quickly as possible.”
I suggest to him that the most important thing is not getting it done quickly, but getting it done right. Given this Government’s record of legislative mismanagement, will he today agree to publish after the Queen’s Speech a draft energy Bill for pre-legislative scrutiny, so that this House can ensure that the Government’s proposals deliver the electricity system our country needs?
Charles Hendry
One of the most important things for international investors is for there to be as much cross-party support as is possible in this sector. The Government therefore want an energy Bill that commands support on both sides of the House. We are keen to engage constructively with the right hon. Lady, her shadow team and the Select Committee to examine the options for pre-legislative scrutiny closely and see how we can get the maximum possible support for our measures. I am sure she will understand that we do not want to delay the Bill unduly, but we think that that sort of cross-party support will be an integral part of its success.
Anas Sarwar (Glasgow Central) (Lab)
7. What recent forecast he has made of future levels of fuel poverty.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
11. What discussions his Department has had with National Grid on the undergrounding of new electricity cables.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The Department and National Grid have discussed National Grid’s new approach to network infrastructure, which emphasises mitigating visual impacts. The Department has arranged for National Grid to fund an independent study comparing the costs of undergrounding and overhead lines. We also revised the text of the relevant national policy statement to require greater consideration of alternative approaches before it was approved by Parliament.
Dr Poulter
I thank my hon. Friend for his answer. I am sure he is aware that increasingly robust evidence has been gathered by the Institute of Engineering and Technology that the cost of undergrounding pylons is a lot less than National Grid has previously suggested. May we count on his support and the support of the Government to ensure that pressure is brought to bear on National Grid to underground pylons and not ruin the beautiful British countryside?
Charles Hendry
My hon. Friend makes a very important point. I think National Grid was very pleased to commission that report from the IET to get independent analysis of the costs. I know that there is a significant multiple from undergrounding or taking cables sub-sea, but we have required, through the national policy statement, that mitigation aspects and alternative approaches be looked at to preserve our precious landscape.
Richard Graham (Gloucester) (Con)
12. What assessment he has made of the likely effects on household energy bills of changes to the feed-in tariff scheme.
Nigel Mills (Amber Valley) (Con)
14. What steps his Department is taking to reduce energy costs.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
We are helping around 2 million vulnerable households through the warm home discount scheme and many more households through other schemes. The green deal and the energy company obligation will provide energy efficiency measures at no up-front cost. We are also looking to help consumers obtain better prices by harnessing their collective purchasing power.
To help businesses with their energy costs, the Chancellor announced a package of measures worth £250 million over the current spending review period.
Nigel Mills
I am grateful for that answer. Will the Minister join me in welcoming Rural Action Derbyshire’s bulk-buying scheme for domestic heating oil, which aims to bring communities together to deliver savings to heating oil customers?
Charles Hendry
I am delighted to join my hon. Friend in supporting this particular scheme. It is exactly the sort of scheme that we want to see coming forward. It gives consumers greater buying power; it helps them to negotiate a better price; it is good for them and it is good for the market.
Barry Gardiner (Brent North) (Lab)
A reduction in energy costs is one way of addressing fuel poverty, but with rising world commodity prices it is unlikely to be seen in the future. The other way of addressing fuel poverty might be to make direct payments to the more vulnerable, but again, given the financial situation, that is highly unlikely. Therefore, energy efficiency is critical. Will the Government look at making energy efficiency measures compulsory and putting them in place across the board?
Charles Hendry
We have made enormous strides on this through the green deal. We have recognised that in the United Kingdom our gas prices are the lowest in the EU15 and our electricity prices are about the third lowest in the EU15, but the total bill is much higher because our homes and businesses are very energy inefficient. The green deal was the first comprehensive measure introduced by Government to address this and to be rolled out across the housing stock. I know that the hon. Gentleman welcomes the ambition that we are setting out, and we are determined to make this fundamental change.
Mr Aidan Burley (Cannock Chase) (Con)
15. What discussions he has had with private contractors on the construction of the next generation of nuclear power stations.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
My Department regularly meets companies from different parts of the supply chain to discuss the next generation of nuclear power stations and how they can contribute to meeting our energy security and carbon reduction goals.
The UK Government are committed to ensuring that UK companies are in a position to compete for the business opportunities that new nuclear can provide, both in the UK and globally.
Mr Burley
My constituents will welcome the news that Ministers are working with the supply chain and nuclear reactor vendors to help create and support a globally competitive supply chain. What steps is the Minister taking to ensure that the majority of the UK’s new nuclear plants are constructed, manufactured and engineered by British companies? Will he pledge to include socio-economic factors in the invitations to tender, as so many other European countries do in theirs?
Charles Hendry
We are keen to learn to be more like the French and to understand how we can do that more effectively in these matters. We work closely with companies such as Areva and Westinghouse, which have assured us that they have a real commitment to developing supply chains here in the United Kingdom. We are working with local enterprise partnerships to ensure that the skills base is there. The partnership between Areva and Rolls-Royce is a fantastic example of how we can develop that in the United Kingdom and then those skills can be taken to the rest of the world.
Paul Flynn (Newport West) (Lab)
This time last year there were 54 nuclear reactors operating in Japan. Today there are three. Does not the anniversary of the terrible accident there last year convince the Minister that nuclear is the most fragile, unreliable power source?
Charles Hendry
No single source of energy is capable of withstanding the force of a multiple earthquake and tsunami. Those were very exceptional circumstances. We asked our regulator, who is well respected, to look into this and see what lessons we could learn, and we came to a different conclusion. We understand why the Japanese Government came to the conclusion that they did, but we see nuclear as an important part of a low-carbon future. We are therefore keen to take this forward, but we will never compromise on safety standards.
Pauline Latham (Mid Derbyshire) (Con)
16. What discussions he has had with the Secretary of State for Business, Innovation and Skills on the Green investment bank.
Jim McGovern (Dundee West) (Lab)
18. What plans his Department has to reduce energy costs for (a) low-income and (b) other consumers.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
We are committed to helping people, especially those in low-income, vulnerable households, to heat their homes more affordably. We are helping about 2 million low-income households through the warm home discount scheme this year. In October, we announced the joint “Check, Switch, Insulate to Save” campaign to help all consumers save money this winter. We are also looking to help consumers harness their collective purchasing power.
Jim McGovern
I thank the Minister for his response. As the real value of wages stagnates and unemployment increases, energy prices are a real problem for people in my constituency, particularly those on low incomes. Dundee Labour party has pledged to negotiate a 20% reduction in energy prices if it is elected to lead the council in May. I ask the Government to take the lead from Dundee Labour party and do everything that they can to reduce energy prices, so that those on low incomes do not have to make the awful choice between eating and heating.
Charles Hendry
I would be more than happy to have a meeting with the people from the hon. Gentleman’s constituency in Dundee to understand more about the scheme that they are putting forward. As he will be aware, last year gas prices were, on average, 30% higher worldwide than the year before and oil prices peaked at their highest ever level in sterling just last week. Global prices have been going up and we therefore need to find new, imaginative ways of helping consumers. Such collective purchasing agreements can be an important way of reassuring people and of ensuring that they get the best deal. I would be delighted to meet those people.
Robert Halfon (Harlow) (Con)
Thank you, Mr Speaker. The Government define fuel poverty as a person spending a tenth of their income on fuel. Motorists in Harlow who are on average earnings spend a tenth of their income on petrol and diesel costs. Does that not mean that motorists on low and average earnings are facing fuel poverty? Will the Government do everything that they can to continue down the path set by the Chancellor in the last Budget, and reduce the cost of petrol and diesel at the pumps?
Charles Hendry
My hon. Friend makes a point that will resonate across the House. Members of Parliament from every constituency, be they urban or rural, are very concerned about this issue. As I said, oil prices peaked at their highest ever levels in sterling last week. We are therefore facing a global issue. My right hon. Friend the Chancellor has been listening actively to what is being expressed on this issue and will make further announcements in the Budget.
Nadhim Zahawi (Stratford-on-Avon) (Con)
T1. If he will make a statement on his departmental responsibilities.
Paul Flynn (Newport West) (Lab)
T2. Will the Minister congratulate the firm of Mabey Bridge in Chepstow, which was started last year? It has just doubled its work force to 200 and has a full order book for 35 wind power towers. Will he take this opportunity to denounce the doubters on his Back Benches and give a clarion call of support for wind as a job-rich form of energy that is British, eternal and clean?
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The hon. Gentleman gives a perfect answer to the right hon. Member for Don Valley (Caroline Flint). That is an example of a company investing to take advantage of the opportunities that exist. I was delighted to be able to open the factory extension last year and to meet the company again last week. It is doing a tremendous job, and it is a great British success story.
Chris White (Warwick and Leamington) (Con)
T6. In Warwickshire, we are fortunate to have many people who are seeking to design community-based renewable energy solutions, ranging from solar panels on public buildings to hydroelectric power. In the run-up to the Budget, will the Minister ask the Treasury to consider extending community investment tax relief to matters such as investment in community energy, which delivers both social and economic benefits? That could provide a significant incentive for people to invest in such schemes.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Where are we with nuclear waste? If nuclear power is essential to deliver low-carbon economies, where is the Department in its programme and level of investment for disposing of spent nuclear fuel?
Charles Hendry
My hon. Friend raises one of the most critical issues at the heart of the nuclear debate. The Government have taken forward significantly the programme for the long-term deep disposal system for our legacy waste in this country. We are trying to advance that programme by at least a decade and discussions are continuing about that. We also recently published the waste arrangements for any new nuclear operators, with which they will have to comply for their plants to go forward.
Mrs Anne McGuire (Stirling) (Lab)
The main source of biomass in the UK is wood, and the renewables obligation is distorting the competitiveness on price. Having had very good meetings with the Minister, I recently met representatives of the industry, who tell me that the issue is now critical. What progress has been made?
Charles Hendry
As my right hon. Friend the Secretary of State said, just as we are determined to ensure that biomass does not compromise food security, we also want to ensure that biomass activities can have other good uses, for example, in wood panelling, furniture and building. There is a very strong industry, particularly in Scotland and the north of England, and we have been pleased to have good engagement with the right hon. Lady and the industry. I want to reassure her that we will continue with that because we want an outcome that benefits all parties.
Mr Dominic Raab (Esher and Walton) (Con)
In response to a freedom of information request, the Department confirmed that seven documents were prepared for the Copenhagen summit that show the cost to the UK of a 30% cut in EU emissions. When he was Energy Secretary, the Leader of the Opposition made the ludicrous claim that disclosure would damage international relations, and he vetoed it. Given the Minister’s personal commitment to a more transparent approach under FOI, will he publish the seven documents so that taxpayers know the costs that they would bear?
Mr Iain Wright (Hartlepool) (Lab)
Will the Secretary of State update the House about the memory stick that was lost in India, which contained plans for Hartlepool nuclear power station? What has been done about the matter?
Charles Hendry
Let me reassure the hon. Gentleman that we have looked into the matter. Any loss of a memory stick is a matter of concern, but we have looked at the information that was contained in it, and it was not critical. Although the loss is inconvenient and irresponsible, it poses no threat to national security.
Mr David Amess (Southend West) (Con)
As the promoter of the Warm Homes and Energy Conservation Act 2000, which tasked the Government with eliminating fuel poverty, I know that my hon. Friend will share my disappointment that the previous Labour Government failed to do that. Now that we have the report, will he act on the Macmillan recommendations about vulnerable cancer patients?
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I was concerned to read the scaremongering in The Guardian today about how nuclear power station sites are at risk of flooding. My understanding is that there has been no cover-up of the Department for Environment, Food and Rural Affairs report on flooding, but we know that the Department of Energy and Climate Change has taken action through the Weightman report to say that coastal defences must be maintained. Does the Minister agree that such scaremongering is not helpful to residents in Suffolk?
Charles Hendry
I can give my hon. Friend an absolute assurance on this. We will not compromise on safety in any respect with regard to new nuclear power stations. That is an integral part of the national policy statements and the planning process. We have the most effective and toughest regulatory system anywhere in the world and one of the most highly regarded international inspectors is leading the process. We will not compromise on safety in those areas.
Barry Gardiner (Brent North) (Lab)
Green economic development will be the central focus of the United Nations conference in Rio in June. Given that, which Ministers will attend? Now that the Brazilian Government have changed the date to 15 June in deference to the Queen’s diamond jubilee, will the Prime Minister himself attend?