Energy Prices and Profits
Debate between Charles Hendry and John Robertson(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Charles Hendry (Wealden) (Con)
Does the hon. Gentleman therefore regret the years from 1997 to 2007 when nuclear was off the agenda completely, and would we be in a better position if nuclear had been able to advance during that period?
John Robertson
The short answer is yes, I do regret it. But I also regret what happened before that, because in the 1980s and early 1990s we knew that we had to build new power stations, but we did not do a lot about it. We built some gas-powered stations, but we knew that we would run out of gas unless we went to the middle east or Africa to get it. The one issue that struck home with everyone was security of supply. When Tony Blair stood up and said that in this Chamber, people asked, “What has happened? He has changed his mind.” But he understood that something had happened in the world that meant that we had to ensure we had security of supply.
The hon. Gentleman did an excellent job as a Minister, but he will remember that it was support from him and his colleagues that helped us to get to where we are today. The Secretary of State would not be a Minister if it had not been for what happened in those days because there would not have been an Energy and Climate Change Department or Committee. We did that together, and we have to go forward together. I hate this fighting and having a go at each other—“Your policy was wrong, our policy is right.” That is a portrayal of history that I do not recognise. What was done at the time was right for the time. We have moved on and we need to make things better.
If the Secretary of State wants my support, he needs to have a better attitude. If he wants my help, he should at least listen to what we have to say. He does not have to follow it, but he should at least look as if he is listening.
Oral Answers to Questions
Debate between Charles Hendry and John Robertson(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
John Robertson (Glasgow North West) (Lab)
11. What the level of debt is by which a prepayment meter customer is able to change supplier.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The debt assignment protocol helps prepayment meter customers with a debt of £200 or less to switch, providing the new supplier agrees to take on the debt. Ofgem monitors the protocol’s effectiveness by recording the number of customers blocked from switching as a result of having a debt.
John Robertson
I am sure the Minister will understand my question when I mention that because of debt 200,000 customers are trapped on tariffs that they cannot get out of. If the level was extended to £350, a lot of those people would be able to get their debt down. What is he doing to try to deal with that and will he persuade Ofgem to set the figure at £350?
Charles Hendry
The hon. Gentleman raises an important point, and I shall ask Ofgem to look at the issue in detail. Many people are on prepayment meters because they were already in debt and it was a way of trying to manage their repayments to get them back on a firm footing. Clearly, we want people in all circumstances to be able to benefit from lower tariffs and it is important that they should be set at the right level in that part of the protocol.
Oral Answers to Questions
Debate between Charles Hendry and John Robertson
Charles Hendry
A great deal of work needs to be done to assess the role that shale gas can play. We are aware of the gas-in-place estimate, but it is very different from an estimate of the amount of gas that may be recoverable. Much more research is needed, but we are satisfied that if the extraction goes ahead, it can take place under the existing legislative requirements relating to safety and environmental protection.
John Robertson (Glasgow North West) (Lab)
T8. An early-day motion tabled today, signed by me and the hon. Members for St Ives (Andrew George), for South Suffolk (Mr Yeo) and for Brighton, Pavilion (Caroline Lucas), calls on Ofgem to raise the level of debt for which pre-payment meter customers can switch suppliers from £200 to £350. According to the House of Commons Library, that would help more than 200,000 people immediately. Can we rely on the Secretary of State’s support?
National Policy Statements (Energy)
Debate between Charles Hendry and John Robertson
Charles Hendry
The hon. Gentleman knows that we attach tremendous importance to the potential of marine technologies. He will also appreciate that the national policy statements relate to major infrastructure projects involving more than 50 MW. There is currently no possibility of any marine technology of that scale. The national policy statements can be adapted in due course and will be reviewed over time, and as technologies of that scale emerge, it will be possible for a policy statement to be established. However, the schemes that we are currently seeing are much smaller, and can therefore be dealt with through the other planning procedures that cover them.
The overarching national policy statement explains the need for transmission networks, which are vital to get electricity into the grid—from locations where there is no existing network infrastructure—and to consumers. It also explains the need for gas and oil infrastructure to ensure that we can take advantage of diverse supply options for gas and oil. Some fear that our policies will lead to a “dash for gas”. We understand their concerns, and we will keep a close watch on the electricity generation that is coming on line. If in the future we decide that our policies are not having the desired effect, we will review them, but the national policy statements are not the place for that review.
John Robertson (Glasgow North West) (Lab)
As my hon. Friend the Member for Newport West (Paul Flynn) pointed out earlier, other countries are giving up nuclear power, and they will make a “dash for gas” to meet their base load. Has it occurred to the Minister that we may have to do the same in relation to our own base load?
Charles Hendry
The hon. Gentleman is right. We have considered that, and I look forward to giving evidence to him and his colleagues on the Select Committee tomorrow morning.
This is a permissive framework, which involves planning consents. It is not a case of people going ahead and building the plants. A range of other investment decisions need to be made in order for the final decision to be made, but at this stage what is critical is the establishment of a structure so that people understand how the planning system will work.
National Policy Statements
Debate between Charles Hendry and John Robertson
John Robertson (Glasgow North West) (Lab)
I commend the hon. Gentleman on the work that he did on the Energy and Climate Change Committee, and on which he congratulated everyone involved—they say that self-praise is no praise, but there we go. My great worry, and that of many of my colleagues on the Opposition Benches, is that the poor will always suffer. While everybody else is looking for ways of saving money, they cannot do so. What will his Government do to help people who perhaps cannot afford to do what is necessary to make the savings that he is talking about?
Charles Hendry
The hon. Gentleman has often raised this issue in the Select Committee in the past, and it should be at the heart of our thinking. At this time of year, when people are struggling to pay their bills, how they will pay them in the future is a matter of great concern to us.
The nature of the green deal is that it does not depend on the creditworthiness of the individual householder. A charge will be set against the future energy bills of their property, with the condition that the total cost of the energy efficiency measures should be such that it can be repaid through that extra charge over a period of 20 or 25 years. So the people living in those properties will get the immediate full benefit in terms of warmth and reduced energy consumption, but the charge will be brought back over time. We think that this policy has been devised in a way that has at its heart the interests of those who are fuel poor and have difficulty in paying their bills. The hon. Gentleman is absolutely right to say that, in all these issues, there are massive costs for consumers. Our job as a Government is to find ways of trying to drive down the number of units that consumers will be using. The green deal is part of that process, as is smart metering.
Charles Hendry
The Government are seeking to address a comprehensive range of issues to do with new nuclear. There have been planning issues; for example, the Sizewell B project took five or six years just to go through the planning stage. Also, regulatory justification is a legal requirement, and that process had to be gone through. Last week, a measure on that passed through this House with a massive majority of over 500 to a couple of dozen, so there has been a significant step forward in that respect. The long-term cost of waste management also needs to be known, and that figure is now being made clear and given to the industry. Other barriers to investment are also now being addressed. Therefore, although it is technically right that there was nothing to stop people investing in new nuclear, it is also absolutely clear that the circumstances did not encourage people to come forward with new proposals.
John Robertson
I should declare an interest: I am chair of the all-party group on nuclear energy. I think the Minister is being slightly disingenuous towards the Opposition. It was Labour who led the fight to put nuclear back on to the table. It was not that it had been taken off the table; it was just that nobody really wanted to touch it, including Ministers who were Members of this House at the time. Therefore, in a spirit of cross-party coalition, will the Minister accept that we did our bit in getting nuclear back on to the agenda, and does he agree that now is the time to make sure that these new power stations are built for the benefit of this country?
Charles Hendry
I am keen that this coalition should get larger and grander every day, so I am delighted to welcome the hon. Gentleman to it. I agree with what he said. I have already twice given credit to the previous Secretary of State. I am very happy to pay tribute to him and the previous Prime Minister for the role they played in putting nuclear back on the agenda.
In response to the question of my hon. Friend the Member for Dover (Charlie Elphicke), I think it is true that the challenges we face today are in part a result of not enough construction having been carried out early enough. If there had been more construction in our energy infrastructure over recent years, we would not now be faced with the mountain of needing £200 billion of new investment.
Nuclear Energy
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Charles Hendry
I absolutely understand that it is not just a nuclear matter. The Tees valley can play a crucial role in the development of carbon capture in nearby Teesside, and there are also many offshore opportunities there. We want to try to find the best way we can to encourage a supply chain to invest in Britain. That is not always going to be through Government grants and subsidies, although there is a role for that and such an approach can make an important contribution. Other issues will also determine whether people invest in Britain. It is mostly—although not exclusively—international companies that will be making such investment, and there is a wide range of issues surrounding the regulatory and tax environment that will be central to whether they invest here. Nuclear is part of an overall approach. I hope I will have the chance to come up to Hartlepool to see some of those opportunities, and perhaps be shown around by the hon. Gentleman.
Some of the issues raised today have to be considered against the backdrop of the challenge that we face as a country. In the course of the next few years, we will see a third of our coal plant being taken out of commission because of the large combustion plant directive, and most of the rest will go as a result of the industrial emissions directive. Much of the remaining oil plant will also be closed because of those measures. Based on current plans, if there are not life extensions, apart from Sizewell B, the nuclear fleet will have closed down in little over a decade. We therefore have an incredible challenge to face.
The hon. Member for Glasgow North West, who introduced the debate, talked about £200 billion of new investment, which compares with about £350 billion of new investment in energy infrastructure in the other 26 nations of the European Union. We have a uniquely serious challenge, and part of the problem is that not enough has been done soon enough. If the five-year moratorium on nuclear had not taken place, we would obviously be five years further forward in the development of those plants. The pressure points in our energy security to which he and others have referred exist because we have not been securing enough investment at an early enough stage during the course of the process.
The coalition agreement is absolutely clear. By definition, a coalition agreement brings together people of differing views to work together for the national good, and that is what we are seeking to achieve. It has been made clear that nuclear will be part of the mix as long as that is done without subsidy. Above all, we have to know whether the industry itself is comfortable with that position and whether the people who will be required to invest billions of pounds in each plant are happy with that agreement. The discussions that we have had since the election suggest that they are comfortable with that arrangement and with the position of myself and the Secretary of State.
Some people opposed nuclear for philosophical reasons; others believed that it would not happen because it would never be economically viable. The Secretary of State has always questioned the economics. However, he is happy that if people come forward with an application for a new nuclear plant without subsidy, it should be part of the mix going forward. We have a clear position, which the investors themselves have been very keen to clarify and which they are now able to support. I hope hon. Members will give us the credence to work forward on that basis, because it is critical for investor confidence that they see a broad coalition in Parliament in favour of a future role for nuclear in this country.
We will go to great lengths to ensure that the taxpayer is protected—no subsidy means no subsidy. We are considering areas in which there may have been hidden subsidies and dealing with those. For example, we will certainly maintain—and reinforce if necessary—measures put in place by the previous Government to ensure that the operators of new plants are required by law to set aside money from day one to pay for the waste and clean-up process. The industries themselves will have to carry out the investment, but the Government will be responsible for the regulation of the safety and environmental aspects that go with that.
The Office for Nuclear Development will continue its crucial work in trying to remove barriers to investment. I give the right hon. Member for Lewisham, Deptford (Joan Ruddock) an assurance that the Nuclear Development Forum will be a key part of taking that forward. It has been an extremely important part of that process, in which both the Secretary of State and I will be very involved. We want people to see that we are at one on these issues.
There has been much discussion of planning during the debate. A statement will be made to Parliament in the near future that will set out exactly how the changes will work. We want the national policy statements to be ratified by Parliament because that reduces the risk of judicial review and makes them stronger and more robust. We want investors to see that there is a strong majority in Parliament in favour of new build, as that sends a strong signal to their overseas boards. We will certainly take account of the representations made by Dungeness to be included in the list, but we will also give similar weight to the representations from community groups in areas concerned about new build, so that we can ensure that their views are fully taken into account. We are currently considering our response to the NPS consultation process and we will make it clear as soon as we can.
On the Infrastructure Planning Commission, we will be introducing a degree of democratic accountability. There will not be delays as a result of that process because we totally understand the urgency of driving these decisions forward, not just in nuclear but right across the board in the energy mix. However, we are keen to ensure that there is parliamentary accountability—again, because we believe that reduces the risk of judicial review.
Charles Hendry
I hope the hon. Gentleman will understand that, with just two minutes left, I shall do so for just a few seconds.
John Robertson
Will the hon. Gentleman mention Sheffield Forgemasters, because a number of colleagues have mentioned that matter?
Charles Hendry
I am grateful for that intervention. Other issues have also been raised, on which I will certainly write to hon. Members. On Sheffield Forgemasters, the decision was not a reflection of the quality of its workmanship or the nature of the company. We simply had to look across the board at a vast number of projects to which significant sums of money had been committed at a time when the nation could not afford it. Essentially the Government were having to borrow money to lend money. If one went to a bank and said, “I need an overdraft because I want to give more money to charity,” the bank would question the wisdom of that approach.