Chris Huhne
Main Page: Chris Huhne (Liberal Democrat - Eastleigh)(13 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Nadhim Zahawi (Stratford-on-Avon) (Con)
13. What steps he is taking to mitigate the effects of high oil prices on energy consumers.
The Secretary of State for Energy and Climate Change (Chris Huhne)
Oil is an internationally traded commodity with prices derived from the global market and, as such, the Government cannot control fuel prices. Within the UK, we have an open market for oil, which we believe provides the best long-term guarantee of competitive prices for the consumer. We are encouraging more energy-efficient cars and homes, and we have asked the Office of Fair Trading to report on the heating oil market. Internationally we are working to improve the functioning of the global oil market, and we are reinforcing the work of the international energy forum, especially by increasing transparency. The key is speeding up the shift to the low-carbon economy by getting us off the oil price hook.
Alun Cairns
On 17 November, one of my constituents paid £490 for 1,000 litres of kerosene heating oil. By 18 December, they were forced to pay £745 for 1,000 litres of heating oil. Although fuel price is an issue for everyone across the UK, does the Secretary of State recognise the particular plight of people who live in rural areas and who do not have the option of mains gas and other sources of energy?
Chris Huhne
My hon. Friend is absolutely right; this is a key issue in rural areas to which the ministerial team have given a lot of attention. The Energy Minister, my hon. Friend the Member for Wealden (Charles Hendry), has suffered the effects of this in his own home and feels strongly, as we all do, that we need to get a grip on this. That is precisely why we asked the Office of Fair Trading to look at the heating oil market. We want to be absolutely assured that there is no exploitation and that the market is open and fair, which in the long run is the best guarantee. But we are also concerned about these off-gas-grid homes, and in the longer term we want to ensure that they have the best benefits from the green deal.
Stuart Andrew
Back in December, Age UK expressed concern about the rise in heating fuel cost. What response has my right hon. Friend had to his announcement on the investigation into the heating oil and liquefied petroleum gas market?
Chris Huhne
There has been cross-party support for the investigation and we await the outcome with interest. There is a genuine concern throughout the House that we need to be confident that people in this position can secure the best possible deal in the marketplace.
Henry Smith
Tomorrow is suggested as national fuel poverty awareness day. What steps are the Government taking to ensure that people have access to better environmental enhancements, particularly to their homes, for the sake of the environment and the economy?
Chris Huhne
The key part of the green deal, which is the centrepiece of the Energy Bill making its way through the Lords at the moment and shortly to come here, is an emphasis on being able to tackle fuel poverty. If we get to the roots of fuel poverty, which is often not low income per se, but people relying immensely on energy because they have poorly insulated homes, we can tackle the problem at its core, rather than merely stick on plasters.
Nadhim Zahawi
The renewable heat incentive is one way to mitigate this. My constituents, who are early adopters of ground-source heat pumps and other renewable sources, are disappointed that it appears they will not be able to access the RHI as they will not have installed their equipment before the launch of the incentive. Will the Secretary of State therefore please clarify the position on RHI in relation to individuals who have not installed equipment before the initiative is launched, as it appears that not only is the current uncertainty about new installations confusing constituents, but it is affecting the renewables industry?
Chris Huhne
Obviously, we are trying to eliminate uncertainty as rapidly as we can and trying to be as clear as possible about the policy framework. As can be seen from the announcement of the review of feed-in tariffs, it is important to get these policy details right. We cannot have a situation in which the budgeting is so badly miscalculated that there simply will not be the money to support it. We are determined to go ahead with this. Individuals will be supported under the renewable heat incentive and the details will be forthcoming.
Mr Speaker
May I ask the Secretary of State to face the House when speaking and not look behind him with his back to the Chair?
Albert Owen (Ynys Môn) (Lab)
The Secretary of State mentioned that the Office of Fair Trading was looking at off-grid gas customers who have been ripped off in the way the hon. Member for Vale of Glamorgan (Alun Cairns) explained. Will the Secretary of State consider extending the scope of Ofgem to look at both on-grid and off-grid energy supplies so that there is a level playing field? The OFT takes an awfully long time and looks only at competition, whereas Ofgem has a wider responsibility.
Chris Huhne
Ofgem of course keeps the market under review and is looking at it at the moment, and there would be a possibility of referral if it decided that that was appropriate. Clearly, it is crucial that we have competitive markets, because that is the best guarantee that consumers will get the best possible deal.
Mr Chuka Umunna (Streatham) (Lab)
It has been mentioned that these issues affect those living in rural areas, but of course they also hit people living in urban areas. One in five homes are now affected by fuel poverty, which is the highest rate in 15 years. Will the Secretary of State tell us how the various other measures that the Government have introduced, such as the housing benefit changes and the VAT rise, will help those living in urban areas such as my constituency to deal with high and rising energy prices?
Chris Huhne
The hon. Gentleman will be aware that we have announced the Warm Homes discount, which will ensure, through legislation, that the particularly high fuel bills suffered by those in fuel poverty are tackled, which is a considerable advance on the voluntary arrangements that we have had until now. I come back to the point I made in response to my hon. Friend the Member for Crawley (Henry Smith), which is that we must tackle the roots of the problem. The energy bills of people on low incomes can vary by a factor of six. If they are lucky enough to be in decent home standard social housing, they will have low energy bills, but if they are in private rented housing they may have very high energy bills. That is what we have to tackle and that is what we will do with the green deal.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I am delighted about the investigation into domestic fuel prices, which my hon. Friend the Member for North West Durham (Pat Glass) and the official Opposition have been calling for, and glad that the Government have finally acted. Rising oil prices, as my hon. Friend the Member for Streatham (Mr Umunna) and others have indicated, are only part of the problem. The Government’s record on standing up for consumers is, frankly, very poor. In recent months, we have seen price rises of between 2% and more than 9% from all the main energy suppliers, yet Ministers sit back and refuse to intervene. We have seen Consumer Focus abolished, with insouciance from the Secretary of State on what that means for consumers. At the same time, we have seen mis-billing and doorstep selling investigations showing that not all is well with the big six energy companies. The Government’s response is that we must leave them alone or they will not invest. Does he understand that that investment is customers’ money? Can he tell the House that he is entirely confident that customers are getting a fair deal?
Chris Huhne
The hon. Lady will know that it is precisely because we are not confident that customers are getting a fair deal that we have, for example, asked the OFT to look at the heating oil market and why procedures are under way to investigate doorstep selling. In all markets we must be ever-vigilant, which is precisely what the Government have been. We have put the consumer’s interests first.
Nick de Bois (Enfield North) (Con)
2. What assessment he has made of the likely effects on oil prices and supply of the political situation in Egypt.
Nigel Mills (Amber Valley) (Con)
11. What assessment he has made of the likely effects on oil prices and supply of the political situation in Egypt.
The Secretary of State for Energy and Climate Change (Chris Huhne)
Egypt accounts for 2.1% of the world’s oil production. We do not expect that disruption to Egyptian oil production and oil transiting the Suez canal is likely. The secretary-general of OPEC and the Saudi oil Minister Ali al-Naimi have both stated that, in the event of disruption to the Suez canal, OPEC would increase production to provide market-calming measures. About 5% of overall crude and petroleum products goes through the Suez canal.
Nick de Bois
I thank the Secretary of State for that answer. Will he outline what measures his Department may be planning to affect price stability?
Chris Huhne
My hon. Friend may be referring to the debate that has been going on about the fuel duty stabiliser, but that of course is the responsibility of the Treasury and the Chancellor of the Exchequer. I understand that work is continuing on that. The key for my Department is to ensure that we speed the transition to a low-carbon economy as quickly as possible. We have to get off the oil price hook, and this episode of oil prices rising above $100 a barrel demonstrates the urgent need to make good progress on that, which is precisely why the Government are, for example, bringing forward subsidies for electric vehicles, pushing within the European Union for tougher standards on energy-efficient vehicles, and why we have the green deal. We want to ensure that our population is not vulnerable to precisely those sorts of shocks. Our policies will be—
Nigel Mills
I am grateful to my right hon. Friend for that information, but, given the current high price and the risk of uncertainty increasing it further, does he agree that there is now no need to encourage my constituents and his to change their behaviour through further duties, and that if we do such things we risk driving our constituents out of economic activity completely?
Chris Huhne
As I say, the fuel duty stabiliser is a matter for the Treasury. I merely point out that, over time, all European countries—in fact, all developed countries with the exception of the United States—have taken the policy view that, for all sorts of reasons, including national security, we should encourage energy efficiency in our oil use. Any short-term concession that goes against that will make us more vulnerable in the long term.
Hugh Bayley (York Central) (Lab)
I agree with the Secretary of State that our country needs to reduce its dependence on oil. Does he agree with me that the Government should do all in their power to promote democracy in north Africa and the middle east? Democratic countries are better for the people who live in them, better in terms of human rights and make for better trade partners of countries such as our own.
Mr Speaker
Order. A brief answer that relates to oil prices would be helpful.
Chris Huhne
Mr Speaker asks me to relate oil prices to democracy, which is the sort of A-level question that would test any Member.
Obviously, and crucially, open societies in particular are easier to deal with and easier to understand, and in our experience they tend to be more stable. That is a point we make to our friends right the way around the world.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
19. What recent steps he is taking to improve the energy efficiency of privately rented housing in rural areas.
The Secretary of State for Energy and Climate Change (Chris Huhne)
I want to see the energy efficiency of privately rented housing improve across the country, including in rural areas. Our green deal, due to be launched in late 2012, will help enable this to happen. It will offer landlords, in both urban and rural areas, a real opportunity to invest in the energy efficiency of their properties at no up-front cost. If they do not, we are taking powers in the Energy Bill to enable tenants to insist on the green deal. Furthermore, we will allow councils to ban rentals in F and G-rated properties. My Department is looking at how best to incentivise renewable heating for those off the gas grid, particularly those in rural areas.
Sir Alan Beith
I welcome what my right hon. Friend is doing on this matter, but I ask him to keep in mind the fact that some of the poorest people in my constituency live in former farm cottages that are stone-built, have landlords who are reluctant to improve them, are not connected to a gas supply and are at the mercy of monopolistic heating oil firms.
Chris Huhne
I entirely sympathise with my right hon. Friend’s point about the problems that often exist in rural areas. Such problems are often overlooked precisely because they are not necessarily concentrated in large numbers, but poverty, including fuel poverty, can be a dramatic problem in rural areas. The green deal will be particularly helpful to the sort of constituent whom he has mentioned, because there will also be support for hard-to-treat homes, which will involve subsidising solid-wall insulation.
Mr Clive Betts (Sheffield South East) (Lab)
I am sure that the Secretary of State is aware that many older privately rented properties do not have cavity walls. Therefore they can benefit from loft insulation, not cavity-wall insulation, and external or internal cladding is often problematic. In those cases, will he consider giving extra priority under the green deal to offering assistance with double glazing?
Chris Huhne
We are looking at exactly what the specifications should be under the green deal. I want us to get in as much as possible. Given that the scheme will be much bigger than any that we have had before, one of the points that we are discussing with the industry is whether those economies of scale can be reflected in the prices of energy-saving products. If we can do that, we can make them susceptible to the green deal to a much greater extent. However, I would also refer the hon. Gentleman to my answer to my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) concerning solid-wall insulation. There are technological improvements being made in this area that I would not rule out as a source of comfort for the hon. Gentleman’s constituents.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
20. What recent steps he has taken to facilitate direct passage of the gas generated from anaerobic digestion into the national transmission system.
Mr Philip Hollobone (Kettering) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Chris Huhne)
Since the previous departmental Question Time we have published proposals to increase liabilities for nuclear operators under the Paris and Brussels conventions. We have also opened a consultation on the long-term management options for the UK’s civil plutonium stocks, and launched a review of the feed-in tariff scheme to ensure that we have investment certainty at reasonable budgetary cost.
Mr Hollobone
Britain’s electricity system is at its most vulnerable during winter cold snaps when the wind is not blowing and the wind turbines are not moving round. What steps is the Secretary of State taking to ensure that the plant capacity margin is big enough to ensure that we can keep the lights on with power from conventional sources during those periods?
Chris Huhne
My hon. Friend is right to highlight that as an important and ongoing issue, and it is one to which we have devoted a lot of attention in the Department. In the short term, the key is that the capacity margin has increased quite comfortably—sadly for the wrong reasons: because of the impact of the recession—but in the long run we are trying to ensure that we pay for capacity through electricity market reforms. That is in the consultation documents that we have tabled, and I believe that it will provide a long-term solution and ensure that we have an adequate margin.
Ian Murray (Edinburgh South) (Lab)
T3. The Secretary of State for Business, Innovation and Skills came to the Environmental Audit Committee last week and told us that DECC had been heavily involved in the development of the green investment bank. What input has this Secretary of State had to the formation of the bank? Can he tell the House whether he is in favour of a bank or a fund—and whether the Treasury is pushing him towards a fund in order to keep the scheme off its books?
Chris Huhne
There are ongoing discussions between Ministers—[Hon. Members: “Ah!] I would merely make the point to Opposition Members that it is more important to get this right than to do it quickly and get it wrong. With the green investment bank, let us remember that we are looking at an institution that will be crucial in supporting the transition to a low-carbon economy not over a two or three-year period, but over 40 years. If we look back at our economic history, and at similarly massive changes in the way our economy has been powered—for example, the move to coal and then oil, with the internal combustion engine—we see that these things do not happen in a day. Let us get the green investment bank right. That is what Ministers are going to do, and announcements will be made in due course.
Miss Anne McIntosh (Thirsk and Malton) (Con)
T2. The green deal will bring huge fuel efficiency benefits in heating homes. Will the Secretary of State consider extending it to cover water efficiency, and in particular to educating households to save water, and to save energy by heating only the water that they need to use?
Chris Huhne
I am very sympathetic to my hon. Friend’s points. There is an important agenda for trying to make water use sustainable, as well as the other elements covered by the green deal. The difficulty lies in attaching measures that would affect water to an electricity and gas Bill, and that has so far proved insuperable for the ministerial team. We would like to see real improvements, however, and we have been working across Government on this. I know that the Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Meriden (Mrs Spelman) is also concerned about this, and is working hard on proposals.
Ian Lavery (Wansbeck) (Lab)
The Secretary of State will be aware that the Hatfield colliery in South Yorkshire is in administration. It has more than 100 million tonnes of coal. Has he had meetings with the owners or their representatives to try to resolve the situation, and will he agree to meet me and other representatives to discuss it?
Barry Gardiner (Brent North) (Lab)
We have recently begun to see the decoupling of oil and gas prices, and technological innovations enabling us to exploit shale gas might expand that decoupling still further. How is that affecting the Government’s thinking on electricity market reform, and what repercussions do they foresee?
Chris Huhne
That is absolutely right; this is one of the most interesting things happening in energy markets. The last figures that I looked at were very striking, showing that the price per therm in the United States is virtually half what it is in the UK or on the continent of Europe. Any electricity market reform must obviously involve a framework that could accommodate such changes, if this turns out to be a long-run trend. For example, if gas with carbon capture and storage were a particularly attractive technology providing low-carbon electricity for our consumers, the electricity market reform would have to enable it to be produced. It is not our job to pick winners in technology, but it is our job to ensure that we have low-carbon electricity and that the market framework can deliver it.
Claire Perry (Devizes) (Con)
T7. Farmers in my Devizes constituency really welcome the inclusion of anaerobic digestion in the overall tariff and review currently taking place. That is long overdue, and an important way of reducing emissions and cutting waste from the farming industry. However, communities living close to existing or proposed sites are expressing real concerns about the possible impacts—an increase in traffic, unpleasant odours and so forth. What can be done to reassure communities and farmers that those things can co-exist in the countryside?
Duncan Hames (Chippenham) (LD)
We have heard how households such as those off the gas grid, of which there are many in my constituency, would benefit from the new green deal. If demand for it initially outstrips supply, how will the Secretary of State determine who should have access to it first?
Chris Huhne
My hon. Friend raises an interesting point; it is a high-class problem. Up until now the main difficulty Governments have faced is in encouraging consumers to go for energy efficiency measures, which are enormously beneficial economically. For example, the payback period for both cavity-wall insulation and loft insulation is less than 18 months, yet there are still millions of homes outstanding. I look forward to having to deal with the problem of high demand, but it is not one that has detained us greatly as yet. We want to make sure that the market takes off, and that is where we have been focusing our attention.
Dame Anne Begg (Aberdeen South) (Lab)
The all-party offshore oil and gas industry group heard this week of the difficulties faced by developers of small oil and gas fields in accessing infrastructure at a reasonable tariff. They say that the existing mechanisms do not work, and that the legal process for determining resolution has never worked either. Will the Minister turn his attention to that and ensure that they have proper access at reasonable tariffs, because it is these small developers that will be the future of the offshore oil and gas industry in the North sea?
Nia Griffith (Llanelli) (Lab)
May I return the Secretary of State to the question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)? Will he agree to meet a delegation from the all-party parliamentary group for the steel and metal-related industry to discuss the effects of the carbon floor pricing proposals on high energy users such as the steel and ceramics industries?
Chris Huhne
The hon. Lady will know that we have been in close contact with high energy users. We are happy to continue to meet them to discuss their concerns.
Laura Sandys (South Thanet) (Con)
Is the Department still considering the marine energy parks project, which was proposed before the election? What is its perspective on opportunities for the marine energy sector?