Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)
David Mowat (Warrington South) (Con)
1. What discussions he has had with his counterparts in EU member states on carbon and renewables targets.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
I have engaged extensively with my EU counterparts on the European Commission's proposals for a 2030 climate and energy framework. This has included discussions at the Energy and Environment Councils in March, May and June this year; many meetings of the green growth group of like-minded EU Ministers, which I established in February last year; and various visits to individual member states for extensive bilateral engagement. Throughout these discussions, I have stressed the need for early political agreement on an ambitious and cost-effective 2030 framework. This is important to unlock low-carbon investment and to put the EU in a stronger position for the global climate negotiations in 2015.
David Mowat
I thank the Secretary of State for his reply. He will be aware that right across the EU, we are seeing the amount of electricity produced from coal increasing. In particular, in 2013, countries such as Germany, Holland and Denmark all showed a considerable increase, yet the UK, which is among the lowest carbon emitters in the EU, is phasing coal out at speed. How can that dichotomy of policy be rational?
Mr Davey
I do not think there is a dichotomy of policy. One of the key issues in the 2030 package that we are negotiating is reform of the EU emissions trading system to send a carbon signal that everyone had expected under the 2008 deal, which has failed to come through. It is right to proceed with this reform. I am proud that Britain is leading in Europe on the ambitious climate change package that is vital to tackle climate change.
Kerry McCarthy (Bristol East) (Lab)
I welcome the Secretary of State to Bristol tomorrow for Big Green week. I think we will be having dinner together. [Hon. Members: “Ooh!”] The shadow climate change Minister will be there, too!
While I welcome the UK’s support for more ambitious carbon targets, surely Britain cannot credibly be described as “leading in Europe” if we do not support Germany’s renewables target—of 30%, which would be binding on national states. The previous 20% target gave a huge boost to the renewables sector in this country, so I urge the Energy Secretary to think again and support Germany’s plan.
Mr Davey
I am looking forward to dinner on Friday night. I did not realise it was in my diary, so I had better confess it to my wife.
The renewables target for 2020 was a very sensible one; it was needed to bring an immature industry forward, but I do not think it is needed for 2030. What is most important for 2030 is having an ambitious greenhouse gas reduction target. That is what we need to tackle climate change, and we need to do it in a technology-neutral way, which enables carbon capture and storage, energy efficiency and all low-carbon technologies to come through. I think that is the greenest approach.
Sheila Gilmore (Edinburgh East) (Lab)
2. What progress he has made in negotiations with the European Commission on a derogation from the ban on the import or manufacture of incandescent bulbs for people with photo-sensitive health conditions; and if he will make a statement.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Government are strongly committed to improving competition. Since 2010, 12 new companies have entered the market, meaning that there are now 19 independent domestic suppliers competing with the big six. Latest figures show that half the households that switch are moving to independent suppliers and we are set to halve the time it takes to switch. Ofgem’s retail market reforms have delivered a simpler, clearer market, and its market maker obligation is improving wholesale market access for smaller suppliers. Last year, we asked the competition authorities to make an annual assessment of competition in energy markets. Consequently, Ofgem has consulted on a market investigation reference, which we strongly support.
Mrs McGuire
Notwithstanding the Secretary of State’s answer, around 98% of homes in Britain still take their energy supplies from the big six. Wholesale prices are falling and consumers are seeing no benefit. Does he not wish that he had been a bit braver in the Energy Act 2013 to ensure that when wholesale prices fall, consumers get some of the benefit? He could have included such proposals in the recent Act.
Mr Davey
I am grateful to the right hon. Lady for her question, but let me just correct her. The market share of the independents is now nearly 6% compared with less than 1% in 2010. That extraordinary growth in such a short period shows the value of competition, with 1 million people switching to independent suppliers over the past year. However, she makes an important point about wholesale energy prices, and we discussed that at length yesterday. We have taken action both through competition and through supporting the competition inquiry, which has real teeth. That stands in stark contrast to the previous Government. When the Leader of the Opposition was doing my job, he failed to take any action, even though wholesale energy prices fell much faster than they are doing now.
Susan Elan Jones
The Minister seems to have forgotten that his party has been in government now for four years, and that last autumn the Which? survey showed that consumers have been paying almost £4 billion over the odds since 2010. Why does he not show a little courage and leadership and break up the big six when the evidence is all in favour of doing so?
Mr Davey
Unlike the hon. Lady’s party leader when he was doing my job, we have referred the energy markets to the independent competition authorities for the most thorough investigation to check that they are behaving in the interests of consumers. More than that, unlike the previous Government who saw the number of energy companies fall from 15 to six, we have increased competition so that people have a real choice, and that is now working. There is still more to do, because the energy markets we inherited from the previous Government were in such a mess.
Mr Bain
Once again, the Secretary of State is sounding dreadfully out of touch. Has he not looked at the latest annual fuel poverty survey, which shows that 2.33 million households in this country are in fuel poverty, and that the gap between what households can afford and what they are expected to pay has increased to £480 under this Government? When are the Government going to stop the excuses, take action and bring in a proper energy price freeze so that consumers can get some relief from this rising cost of living?
Mr Davey
I am grateful to the hon. Gentleman for raising the issue of fuel poverty, because I do look at the statistics and we are focusing very much on that. It is worth noticing that fuel poverty went up under the previous Government, but under this Government it has gone down by 5% according to the latest figures. It is interesting that the figures have gone down under both the old definition and the new one.
Right hon. and hon. Members might want to understand why we brought in a new definition of fuel poverty. The old definition, which was introduced by the previous Government, was so ineffective that it described the Queen as being in fuel poverty in some years. We are targeting fuel poverty, and we are spending more on tackling fuel poverty than the previous Government. We have a good record, and we want to do more.
John Robertson
The Secretary of State once again manipulates the figures, and I think it is a bit of a con. He thinks that the Labour party’s policy is a con to restructure the energy market. Does he not agree, however, that the real con is the fact that the companies can sell their own energy to themselves? Does he not care about people in fuel poverty?
Mr Davey
I think I have proved that I certainly do care, because we have done a lot more than the previous Government. Let me take up the point about the wholesale market. The previous Government did absolutely nothing; they created the big six that sell energy to each other. [Interruption.] Opposition Members do not like it, but it is a fact. Under this Government, Ofgem has brought in the market maker obligation, which creates the transparency that the Opposition were asking for. The Opposition failed, but we have succeeded.
Dr Matthew Offord (Hendon) (Con)
In my constituency, I have promoted the big switch, and I believe that the way to drive competition in the market is for people to vote with their feet. Will the Secretary of State advise the House and my constituents what actions he has taken to make it simpler and faster for them to switch to a better energy supplier?
Mr Davey
My hon. Friend makes an important point. The collective switch, of which that scheme was a part, has made big progress. We have seen a lot of initiatives and we are learning a lot of lessons. A lot of people are saving a lot of money because they are coming together for group purchasing.
The point about faster switching times is absolutely right, and that is one of the reasons why we called in the industry. We inherited a situation in which it took five and a half weeks, on average, to switch, which was unacceptable. We have now got commitments from industry, with Ofgem leading the way, to halve switching times by the end of the year, and we have a plan to get the time it takes to switch down to 24 hours. That is the right approach.
Christopher Pincher (Tamworth) (Con)
Does my right hon. Friend agree that the price freeze that Labour proposes, but that many energy players and experts oppose, will not only reduce competition in the energy market but reduce investment in our energy infrastructure, which is sorely needed after too many years of neglect?
Mr Davey
My hon. Friend is absolutely right. An energy price freeze would hit investors, hit investment, hit energy security and hit our efforts to decarbonise. Worst of all, it would hit consumers, because energy companies would put up their prices directly after the freeze. Everybody knows that, and it is one of the reasons why we have been pushing competition. Competition means not merely freezing bills—five of the big six have announced that they will freeze their bills this year—but, because of independent suppliers, enabling people to cut their bills. Our policy is to cut bills; the Opposition’s is simply to freeze them. We are the ones who are ambitious and on the side of the consumer.
Mr Alan Reid (Argyll and Bute) (LD)
Many of my constituents live off the gas grid, and there is limited competition for liquefied petroleum gas or heating oil to heat their homes. Many of my constituents depend on one local supplier and have to pay whatever prices that supplier chooses to charge. What can my right hon. Friend do to help my constituents who are in that position?
Mr Davey
My hon. Friend makes a really important point. The Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon) has been working with the industry on the concordat. The statistics that have emerged from the new fuel poverty definitions show, unlike previous ones, that much fuel poverty is in off gas grid areas. When we bring forward the fuel poverty strategy shortly, we will be focusing on off gas grid customers, because they are really suffering, and—guess what?—the previous Government did nothing about it.
Caroline Flint (Don Valley) (Lab)
There are more than 1 million families with children in fuel poverty, which is more than there have been at any point during the past 10 years. If wholesale prices are falling but those reductions are not being passed on to consumers, it is a clear sign that competition is not working. Yesterday, the Government opposed our proposal to give the regulator the power to force energy companies to pass on falls in wholesale prices if they have not done so. If the regulator does not have the power to protect consumers and if the Government will not give it that power, how does the Secretary of State expect the public, particularly the 1 million families with children in fuel poverty, to have any confidence in the energy market?
Mr Davey
The right hon. Lady will remember that yesterday I made it clear that we have real concerns about the energy market. That is one reason why we support the competition inquiry. I made it very clear that we are worried about the fact that when wholesale prices go up, retail prices follow them quickly, which is the rocket effect, but that when wholesale prices come down, retail prices do not come down as quickly—the feather effect. We believe that that has to be addressed. The previous Government had the same problem and they did not address it. We are addressing it.
The problem with the proposed regulation, as I told the House yesterday, is that when we look at the detail we can see that it would fail and would lead to prices going up. It is a bungee-jumping approach to energy prices and it would increase volatility and fluctuations. If the House wants a little more analysis, let me point out that a few months ago wholesale prices were coming down, yet in the past few weeks they have gone up. Are the Opposition saying that they would force energy companies to move directly with daily and weekly moves in the wholesale costs? That is surely madness.
Kelvin Hopkins (Luton North) (Lab)
8. What recent representations he has received on the proposed changes to financial support for solar PV.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
18. What recent assessment he has made of the UK’s energy security.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The UK enjoys a stable and secure energy supply, and we are working hard to ensure that it continues. As a Government, we are actively managing a number of risks to our current and future energy supplies, including the current challenges from Iraq, Russia and Ukraine. Our recent national gas risk assessment demonstrated that our gas infrastructure is robust. The measures recently announced by National Grid respond to the energy crunch that, owing to the legacy of under-investment and neglect, was predicted for this winter, but which will not now happen.
Andrew Gwynne
I thank the Secretary of State for that reply. As he will know, this week National Grid suggested that interconnection could save the UK £1 billion in its efforts to meet its supply requirements. What support are the Government giving to ensure that there are potential options for interconnection in future?
Mr Davey
I am grateful for the hon. Gentleman’s question. We are giving huge support. We published the first ever interconnection strategy in December and we are working with Ofgem, which recently published a new registry framework. We hope that three interconnector projects will get to financial close very shortly—the Eleclink through the channel tunnel, the Nemo Link project with Belgium and the NSN project with Norway—and we think that two other projects could come forward with France. The question is really important as it involves the single European energy market, of which we are strong supporters. We are working tirelessly on that very point.
Mr Davey
The last thing we need for energy security is a new quango. The system involving National Grid, Ofgem and my Department is working incredibly well, which is why we dealt with the problem that we inherited. The demand load measures that the hon. Gentleman talked about have been welcomed by the CBI and industry; they are used an awful lot in north America and in other countries, but we have underused them. They are mainly used by companies volunteering to pay to use on-site generation, rather than national grid electricity, at the peak.
Tom Blenkinsop
Will the Secretary of State confirm that just one new gas-fired power station will have started construction and come online in this Parliament, under this Government, compared with the 10 GW of new gas capacity built under the previous Labour Government?
Mr Davey
I hope that the hon. Gentleman is not trying to suggest that the last Government were effective in investing in electricity production, because they were very weak. There has been £45 billion of electricity investment since 2010. The investment rate is going up, not just in gas but in renewables. The first nuclear deal was struck last October. We are going across the board, and the lights will stay on under us; if Labour’s policy had continued, they would have gone out.
Sir Tony Baldry (Banbury) (Con)
Does not the Chinese Premier’s reconfirmation this week of Chinese investors’ willingness to invest in a new generation of nuclear power stations in the UK demonstrate that the world sees the UK generally as a good place in which to invest? Does it not also show that the Chinese see the framework of the Energy Act 2013 as a good, sound basis on which to invest in energy in the UK?
Mr Davey
My hon. Friend is absolutely right. The interest from around the world in the UK’s reformed electricity markets, particularly the world’s first ever low-carbon electricity market, is profound. It is not just the Chinese; there is interest from the French as well as from Japanese companies such as Hitachi and Toshiba-Westinghouse—and not just in nuclear, but across the low carbon piece.
Caroline Flint (Don Valley) (Lab)
The capacity market is meant to help secure our energy supply, but that must be done with as little cost to consumers as possible. There are 15-year contracts for new plant, compared with three-year contracts for existing plant. Will that not create perverse incentives, particularly for the big six, to build lots of new power stations, when it could be quicker and cheaper to refurbish existing plant?
Nigel Adams (Selby and Ainsty) (Con)
13. What estimate his Department has made of the cost to the public purse up to 2050 of limiting the use of biomass in the decarbonisation of the UK’s energy system.
Kerry McCarthy (Bristol East) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
In advance of our dinner tomorrow night, let me tell the House that in May, in response to the crisis in Ukraine, the G7 and the European Union re-evaluated our energy security plans and agreed a new approach that would strengthen our long-term energy security. The United Kingdom is rated the most energy secure country in the EU. To maintain this position, we are pressing forward with the diversification of our energy supplies.
In April, we announced £12 billion of investment in renewable energy projects, supporting 8,500 jobs under the final investment decisions enabling process, which is resulting in the development of offshore wind, coal-to-biomass, and dedicated biomass for combined heat and power projects.
To address short-term capacity issues, this month National Grid announced demand-side balancing reserve measures that will ensure that the risk of disruption remains at very low levels. Energy efficiency is also a key part of energy security, and in June we announced new energy efficiency funding worth £540 million over three years, including boosting cash-back offers under the green deal.
Kerry McCarthy
At Copenhagen, world leaders made commitments to the creation of a green climate fund and to mobilising $100 billion a year of climate finance by 2020. However, it is not clear how much progress has been made in securing this funding, and developing countries have said that they cannot set their emission targets until they know. Will the Minister please tell us what is going on?
Mr Davey
That is a very important question. We are one of the world leaders in promoting international climate finance, and we very much support this fund. It has taken a while to get together to finalise the arrangements. Some real progress has been made in recent weeks, at long last. We hope that countries will start pledging to the fund at United Nations Secretary-General Ban Ki-moon’s summit in November or at the UN framework convention on climate change talks in Lima in December. It is also important that we have private climate finance. Only last week, the Minister of State, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), brought together many people to ensure that there is private money to help to get to the $100 billion target.
Nigel Adams (Selby and Ainsty) (Con)
T2. With one of the potential investors unfortunately walking away from negotiations over our last remaining deep mines, will the Minister update the House on what he is doing to assist in finding replacement investment for UK Coal that will give workers at Kellingley colliery in my constituency the chance of a more secure future?
John Robertson (Glasgow North West) (Lab)
T3. The Secretary of State will be aware that an article in the Daily Mail at the end of last month said that British Gas workers “who doubled bills” were “treated like celebrities” and given trips to Monaco and Rome, plus other things, and that they targeted churches, charities and elderly people because they were easy targets. Does he think it is right for a company to be able to do that, and what is he doing about it?
Neil Carmichael (Stroud) (Con)
T6. In contrast to the gloomy outlook from the Labour party, could we have an update on progress on improving access to and the availability of large-scale solar panels on commercial and industrial properties?
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
T5. On the roll-out of smart meters, the in-home display accounts for about £15 of the cost per household, yet in a recent survey six out of 10 customers said that they would prefer to receive information on tablets, personal computers or smartphones. Does not the Secretary of State think that he is wasting money by going down the route of old-fashioned technology, and will he rethink it?
Mr Davey
No. There is an awful lot of research that shows that in-home displays lead to changed behaviour. There is nothing to stop an energy supplier offering other options in addition. If the hon. Lady wants the improved energy efficiency and lower energy bills that the smart meter programme wants to deliver, I hope she will look at the research, because it is pretty strong.
Mr Robert Buckland (South Swindon) (Con)
T7. On the issue of PV solar farms, do Ministers agree that where local public opinion is overwhelmingly in support of such applications, that should be an important consideration for the planning process? We in Wroughton in my constituency want to see a solar farm at the old airfield, yet we now face a planning inquiry because of objections by the area of outstanding natural beauty. It is deeply frustrating, to say the least.
Tim Loughton (East Worthing and Shoreham) (Con)
The Secretary of State will recall that I raised with him an anomaly about the warm home discount scheme. Pensioners with social landlords who pay their bills collectively through the social landlord do not qualify for that discount. He promised to look into that matter, and he wrote to me. Will he update me on any progress he has made as it is of big relevance to many pensioners in social accommodation in my constituency?
Mr Dennis Skinner (Bolsover) (Lab)
Is the Minister with responsibility for the coal industry aware that when we met the Secretary of State for Business, Innovation and Skills to try to get something like £70 million to save the two pits at Thoresby and Kellingley, I inquired about the person sitting at the back and was told that he was representing the Minister? In other words, he was jotting down everything that we said—he was acting on behalf of the Minister alone—and therefore the Business Secretary was not able to talk to us frankly, and when we asked for the £70 million to save the pits, they refused. He was like a spy in the camp.