Energy Policy and Living Standards
Debate between Douglas Carswell and Matt Hancock(9 years, 11 months ago)
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Matthew Hancock
The Government have had discussions about that. Ultimately, those changes can be best driven by competition. I share the disdain of the hon. Member for Clacton for prices and incomes policies in energy. Indeed, I think that he has missed some of the changes that we have made over the past couple of years, not least in the Energy Act 2013. For instance, he argued for more competition between different technologies so that those with the most potential can drive down costs and improve the situation for consumers. By switching from a regime in which, as he described, subsidy is given out to whatever renewable technology was brought forward to a regime in which a controlled pot of subsidy is auctioned to ensure that we get the best possible value for money, we have made a change towards a market-oriented system.
Douglas Carswell
In the United States over the past five years there has been a 26% reduction in wholesale gas prices and gas prices to consumers. Does the Minister have something to learn about public policy from America?
Matthew Hancock
I have no doubt that the massive expansion of the extraction of shale gas in America has had a downward impact on gas prices. Allied to that is the fact that America did not have many export terminals—it is now building them—which meant that it had a relatively closed market. We are working hard to get shale gas extraction going in the UK, where I think that it has huge potential. The Infrastructure Bill, which is currently before the House, proposes changes to make it easier to get shale gas out of the ground in a carefully regulated and safe way. I welcome the hon. Gentleman’s support for that.
The capacity mechanism and the changes to make our energy system more driven by competition are designed to ensure that we get that security of supply as well as the cheapest possible cost. That is best done through a market mechanism, but the market must have a strong framework around it, because we must ensure continuity of supply in order to keep the lights on.