Energy Bills
Debate between Derek Twigg and Ed Davey(10 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Derek Twigg (Halton) (Lab)
The fact is that many of my constituents will still struggle to afford to put on their heating, because this is an inadequate response to rising prices. I asked the Secretary of State in June whether he had raised with the energy companies the issue of profits. He said that he had not. Since then, in any other such meetings, has he raised any concerns about their level of profits?
UK Nuclear Energy Programme
Debate between Derek Twigg and Ed Davey
Mr Davey
I am grateful for my right hon. Friend’s comments. Britain is working with a significant number of like-minded member states that wish to develop their nuclear programmes. I believe that nuclear needs to be seen as a low-carbon technology in the European debate, because it will be critical to meeting our climate change objectives in the UK, Europe and the world. I recommend to him and to other right hon. and hon. Members the book by the chief scientist in my Department, “Sustainable Energy—Without the Hot Air”, which is this House would benefit from.
Derek Twigg (Halton) (Lab)
Towards the end of the statement, the Secretary of State said that
“we need a revolution in home-grown energy generation”.
Given that the station is being built by the French and the Chinese, that was an interesting comment. What steps are the Government taking to ensure that British companies can build power stations?
Mr Davey
Earlier this year, my right hon. Friend the Secretary of State for Business, Innovation and Skills and I published an industrial strategy for the nuclear industry in the UK to do just that. On the home-grown point, the danger is that if we do not produce energy in this country, whether through nuclear or renewables, we will be increasingly dependent on imports of gas from the other side of the world. That would leave our economy vulnerable to the supply of that gas and to vulnerable wholesale gas prices, which could hit consumers badly. That is why we need more home-grown, low-carbon energy.
Oral Answers to Questions
Debate between Derek Twigg and Ed Davey
Mr Davey
I am extremely concerned by energy bills. We need to do as much as we possibly can and some of our new policies will help people. I say to the Labour party that it is this coalition Government who are reforming tariffs to take away the confusion and complexity that the previous Government failed to tackle, who are looking into collective switching to help people get a better deal from energy companies, and who are getting more competition in our energy market. We are taking a whole range of measures to help consumers.
Derek Twigg (Halton) (Lab)
Despite the initiatives that the Secretary of State has referred to, in the real world bills are going up and the energy companies are making massive profits. Thousands of my constituents are having difficulties paying their bills. When did the Secretary of State last meet the energy companies, and did he raise with them the amount of profit they are making and what was their answer?
Mr Davey
I think I met the big six together in one group last month. I will have to clarify the date on which we spoke. We discussed a number of issues. I made it clear to them that competition and consumer service are critical. One of the best ways to make sure that companies make reasonable profits is through healthy competition.
Derek Twigg (Halton) (Lab)
Will the Secretary of State have another go at answering my earlier question? He said he met the energy companies last month. Let me put the question this way: when he met them, did he raise any concerns about the level of profits they were making, and, if so, what did they say?
Mr Davey
I do not think that profits were part of a specific conversation. This issue is about the whole market: how we ensure more competition and more investment and how we protect consumers from rising global prices by ensuring that they help us deal with energy efficiency.
Cost of Living
Debate between Derek Twigg and Ed Davey
Mr Davey
The Government have delivered on the green investment bank. The hon. Lady should know that investment banks are not controlled by Government. They are given a remit to make investments, and the green investment bank is doing so and is extremely effective. Indeed, it is world leading. I am sorry that the hon. Lady is criticising it and I hope that she will look at what it is doing and realise that it is making a big difference. Our performance on green growth and green jobs shows that we are delivering on the coalition agreement promise to build a new economy from the rubble of the old.
We have this massive infrastructure opportunity because nearly a quarter of our capacity will close over the next decade. We have to replace that to keep the lights on, but at the same time we can begin, and really go for, the transition to a low-carbon energy economy. We need to do that by investing especially in energy efficiency. I have stressed that from day one as Secretary of State. We have several policies already, such as the green deal and the energy company obligation, but in the last year we have developed some very interesting proposals on electricity demand reduction. We will publish the response to our consultation on that shortly.
Around 1 million people work in the green economy, and the support that we are giving to clean energy will fuel the rise in the area. Between now and 2020, the support we give to renewables will increase year on year to £7.6 billion—a tripling of the support for renewable energy and a record the Government can be proud of. We already have 110,00 jobs in the renewable energy sector directly, and 160,000 jobs in the supply chain. By 2020, we believe the sector will have more than 400,000 jobs.
We also have the prospect of a new generation of nuclear power stations. I am engaged in discussions with EDF for a proposed nuclear reactor at Hinkley Point C. If we reach agreement, it will result in more than 5,500 jobs during construction, more than 1,000 ongoing jobs at Hinkley Point C and more in the supply chain. Our proposals on carbon capture and storage—we have two preferred bidders, Peterhead in Aberdeenshire and White Rose in Yorkshire—will also result in lots of jobs and deliver a pathway to commercial CCS in the next decade, which will be very important in meeting our climate change targets.
We sometimes forget the oil and gas sector, perhaps because it is not as green as renewables, nuclear and CCS, but it will be essential as we make the transition from a fossil-fuel economy to a low-carbon economy. We will still need an awful lot of gas and oil during that process and in the next few decades. I am delighted to report to the House that investment in the North sea is booming. We are seeing record levels of investment in the North sea, which is good for our energy security as we do not have to import so much gas from other parts of the world. I hope that right hon. and hon. Members will welcome that.
I have made it clear that we will also support the development of shale gas. If it has potential—and we do not know that yet—it could be beneficial, especially to our energy security. We are going to need gas for many decades. It replaces coal, so it can help us to meet our climate change targets. At the moment, we have to import increasing amounts as the amount coming from the North sea is declining. If we can exploit shale gas commercially, that will make sense, and I hope that we can reach agreement on that. We are going about this in a way that is designed to keep the public with us. In other countries that have rushed headlong into it, the public have reacted very badly, leading to moratoriums and bans. We want to ensure that we think things through carefully, which will help us do it properly.
Derek Twigg (Halton) (Lab)
The oil and gas industry is well represented in the Heath business and science park in my constituency, which is one of the most important employment sites. If the Secretary of State is keen to promote jobs, why does his Department still have a planning recommendation before it that it has had since Easter? It is very simple, involving just the removal of an electricity line, but the delay is holding up investment, jobs and housing. Why has he not made a decision on that, given that he has had the papers since Easter?
Mr Davey
The House will not be surprised to learn that I am not aware of that particular planning application. Of course I will go away, look at it and write to the hon. Gentleman.
All our policies, whether on energy efficiency, renewables, new nuclear, CCS or oil and gas, add up to the proposition that my Department is about growth. We are seeing a lot of jobs created and we will see more in the future. However, I am also concerned about the bills and the cost of energy, and how those affect our constituents and industry. We have seen global gas prices increase dramatically. UK wholesale gas prices were 50% higher in the five years to 2011 than in the previous five, and they have continued to rise since then. That is the global context. People talk about the reduced price of gas in north America, but they forget to look at the price of gas in other markets, which has gone up significantly.
We need to provide a cushion or wedge between the prices going up in global markets and the bills that our constituents have to pay, and we have several policies to help. We have direct payments, including the winter fuel payment, the cold weather payment and the warm home discount. This last goes to 2 million of the lowest income households in the UK, taking £130 directly off their bills and helping 1 million of the poorest pensioners. We are trying to promote greater competition in the retail markets through our proposals on tariff reform and the work we are doing on collective switching. We are driving competition in the retail market, which is already having an effect for those who have benefited from the collective switching.
Through the Energy Bill, we are trying to ensure that we achieve wholesale market reform, and this will no doubt be debated on Report and in the other place. We welcome the fact that Ofgem is consulting on proposals to improve liquidity in the wholesale market. We look forward to its conclusions, and they will play a part in ensuring that competition can drive lower prices. When we talk about the cushion and the wedge between the global prices and the bills that people actually pay, energy efficiency is at the heart of the solution, whether in product standards, the green deal or energy company obligation. I am pleased that we are already seeing real interest in the green deal, and a huge number of assessments have already taken place.
Gas Market Fraud
Debate between Derek Twigg and Ed Davey
Derek Twigg (Halton) (Lab)
My constituents are becoming increasingly angry about the cost of living, about the rise in the cost of fuel and energy and, in particular, about the lack of Government action in getting a grip on the energy companies that have ripped them off. May I ask the Secretary of State one specific question? Before the whistleblower came to the attention of the Department, was any other information provided to suggest that this type of fraud was possible or going on?
Mr Davey
I am not aware of any such information. The first time I learned from the regulatory authorities about these allegations was on Friday afternoon, as I said in my statement. I have to say to the hon. Gentleman that this Government are taking a lot of action to help consumers with their electricity and gas bills, including through the warm home discount, which is helping 2 million of our most vulnerable citizens and taking £130 directly off the bills of 1 million of the lowest-income pensioners. We also have the green deal and the energy Bill, which will drive competition and ensure that we have competitive retail and wholesale energy markets.