Ed Davey
Main Page: Ed Davey (Liberal Democrat - Kingston and Surbiton)(9 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Grahame M. Morris (Easington) (Lab)
15. What steps he is taking to help households with energy bills.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Mr Speaker, with permission I will answer this question with questions 3, 7, 10, 15 and 16.
There are three main ways in which we help people with their energy bills: first, with money, to help vulnerable customers with their energy bills with policies like the winter fuel payment, the warm home discount and cold weather payments; secondly, by helping people save energy and so cut their bills with policies like energy efficiency, product regulations, the energy companies obligation and the green deal; and, thirdly, by making our energy markets more competitive, where our reforms have seen the market share of smaller independent companies grow from less than 1% in 2010 to 10% today, enabling people to save hundreds of pounds on their bills by switching supplier.
Mr Reid
The price of oil has been coming down quite dramatically in recent weeks. This opens up the prospect of lower prices, particularly for people who live off the gas grid. What is he doing to ensure that companies selling to those consumers bring their prices down to help them with their heating bills this winter?
Mr Davey
First, Mr Speaker, I apologise for not getting the list of questions right. My hon. Friend the Member for Argyll and Bute (Mr Reid) makes a good point. We expect heating oil companies to pass on the savings they are making. They do not hedge in the way that electricity and gas companies do in relation to the long-term forward markets; I understand that heating oil forward purchases are done on a much shorter time scale. We would therefore expect reductions in the price of oil to be fed through much more quickly.
Nia Griffith
It is all very well to talk about making the energy companies reduce their bills, but does the Secretary of State not agree that it would be a lot more effective if the regulator had the power to force them to bring prices down, as Labour is proposing?
Mr Davey
Actually, it was the last Labour Government who got rid of price regulation from the regulatory tool book. This Government have supported the referral of the energy market to the independent competition authorities. That is a policy that the last Government—and the present Leader of the Opposition when he was doing my job—failed to pursue.
Andy Sawford
Does the Secretary of State share my concern about the annual fuel poverty statistics report, which shows that the fuel poverty gap—the difference between people’s bills and what they can afford—has grown to £480 in 2014? That is a shockingly worrying statistic, and the real story behind it is being told in the homes in our communities. Does he agree that it is now time to back Labour’s energy market reforms?
Mr Davey
Fuel poverty needs to be tackled thoroughly, which is why we are bringing forward ambitious fuel poverty targets and a new fuel poverty strategy. Opposition Members should note that fuel poverty has actually fallen under this Government, whereas it rose under the last Government. That suggests that we should not be taking advice on energy policy from the Labour party.
Kate Green
Households with a disabled member have high fuel poverty levels, but working-age disabled people are not always able to access warm home discount schemes. In bringing forward a fuel poverty strategy, what will the Secretary of State do to ensure that that vulnerable group is protected?
Mr Davey
We have a whole panoply of measures to help vulnerable people, as I set out in my original answer. Some of the wider policies that we are implementing, particularly those relating to competition, are helping people across the board. We are in discussions with other Government Departments, particularly the Department for Work and Pensions, in relation to the point that the hon. Lady has raised.
Grahame M. Morris
It is not just heating oil prices that have fallen. Wholesale gas and electricity prices have fallen significantly in the past year, yet consumers have seen little reduction in their bills. Does the Secretary of State now regret voting against Labour’s motion on 18 June, which would have given powers to the regulator to ensure that when wholesale costs fell, the reductions were passed on to the consumer?
Mr Davey
It is interesting to look at the history of wholesale prices coming down and reductions not being passed on. There were much greater falls in wholesale costs when the Leader of the Opposition was doing my job, and they were never passed on. This Government have taken action by giving consumers far greater choice. They can now switch from companies that are not offering them a good deal and, in some cases, cut their bills by hundreds of pounds.
Mr David Nuttall (Bury North) (Con)
Does the Secretary of State agree that the best way for the Government to keep energy bills down is to stop subsidising working windmills? We are now subsidising those that are providing energy when the windmills are not working. Instead, we should get cracking with fracking.
Mr Davey
That is a good soundbite, but I have to tell the hon. Gentleman that his understanding of how these things work needs a little work. It is important that we have an energy mix. That encourages greater competition as well as enabling us to tackle all our energy objectives, including keeping bills down and ensuring that we cut carbon and have secure energy.
Mark Pawsey (Rugby) (Con)
The Minister is right to say that the number of households in fuel poverty has fallen every year since this Government came to power in 2010. However, those who are affected the most are the poorest families living in energy-inefficient homes. Will he tell us what steps are being taken to help that vulnerable group of people?
Mr Davey
My hon. Friend is absolutely right; energy-efficiency should be at the heart of our policies. Our new fuel poverty target is focused on energy-efficiency for the very reasons he outlined. I can tell him, and announce to the House today, that up to October this year the green deal and the energy companies obligation have together led to more than 1 million energy-efficiency measures being installed, producing permanent reductions in energy bills, this Christmas and every Christmas.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I wish to place on the record the contribution of the warm home discount scheme to Thirsk, Malton and Filey. Does my right hon. Friend agree that it would have been particularly ill-advised to have frozen energy prices at the time a certain party was recommending that policy?
Mr Davey
Indeed, one danger of the regulatory approach is not only that it discourages investment and reduces competition, but that one can freeze prices at a high level. The benefits of competition and falling wholesale prices will mean that bills will come down—indeed, people can save on their bills through the competition we have stimulated.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Members on both sides of the House recognise that some of the households with the highest bills are in the private rented sector, where we simply have to raise standards. We want to go further than the coalition, but the Secretary of State has repeatedly assured us that the coalition Government will act to improve the very worst homes by 2018. May I therefore ask him, straightforwardly, whether this Government will introduce the regulations on the private rented sector before the end of this Parliament? If not, why not?
Albert Owen (Ynys Môn) (Lab)
17. 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 remains the most energy secure country in the European Union and is ranked fourth in the world by the US chamber of commerce. On electricity security of supply, we are successfully implementing short, medium and long-term policies to overcome the legacy of underinvestment that we inherited, so we will keep the lights on. From National Grid’s supplemental balancing reserve to the capacity market auctions this week through to the £45 billion investment in the UK’s electricity generation networks in 2010, this Government have delivered on energy security for the UK.
Mr Bain
Meeting our security of supply challenge requires stable investment, and investors need confidence in the long-term direction of Government policy. After 2020, when the levy control framework expires, that confidence evaporates in this Government’s current road map, so will the Secretary of State give the industry a big pre-Christmas present by finally committing this Government to a 2030 decarbonisation plan to give the sector the certainty it needs?
Mr Davey
I have done a lot better than that. Through UK leadership in the European Union, we now have European Union 2030 targets, which are among the most ambitious in the world. The UK led that and that gives confidence to the sector not just in the UK, but across the whole European Union.
Albert Owen
The Secretary of State was right earlier when he said that to get energy security we need a proper rich energy mix, but is he as disappointed as I am that the most predictable of energy sources, tidal energy, has not progressed beyond the demonstration schemes and into commercial energy projects, including Siemens in my constituency? Will he meet me and a delegation from the Anglesey Energy Island to see how we can progress so that national needs can be met by local sources?
Mr Davey
I will always be delighted to meet the hon. Gentleman. Although there have been some setbacks with Marine Current Turbines being put up for sale by Siemens, there are some positive signs—for example, MeyGen in the north of Scotland is the world’s first tidal array, and we are very proud of that. Moreover, I hope the hon. Gentleman will welcome the fact that we are intensifying our negotiations with Tidal Lagoon Power over Swansea bay.
Philip Davies (Shipley) (Con)
16. What estimate he has made of how much subsidies for low-carbon energy will add to domestic energy bills over the next 20 years.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The impact of our policies on average household energy bills in 2020 is to cut them by 7%, compared with those energy bills without our policies. That is equivalent to an average saving of £92. The impact estimated for 2030 is to cut bills by 4% or £62 per annum.
Philip Davies
The Committee on Climate Change has said that households already pay an average of £45 a year to support low-carbon power, and that will rise to £100 in 2020 and £175 in 2030. Can the Secretary of State confirm that those figures are true? Does he agree that there is nothing more nauseating than hearing people in this House on the one hand calling for lower energy prices, and on the other hand calling for more climate change policies and renewable energy, which are the one thing that increases prices? Is it not time that we had more cheaper energy and less greener energy?
Mr Davey
I expect any figures from the Committee on Climate Change to be correct, but of course the ones my hon. Friend quotes do not tell the full story of our policies, which was told by my response to him. My hon. Friend just does not get the green energy opportunity, but in the spirit of Christmas let me cheer him up by telling him that the green energy savings I mentioned come partly from regulations—the type of Government intervention he dislikes so much. Worse still for my hon. Friend, his constituents are saving money, thanks to green regulations from the European Union.
John Robertson (Glasgow North West) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The most significant development for my Department since the last DECC oral questions has been the climate change agreement secured in this year’s talks in Lima last week. British leadership on the European Union’s position on climate change helps to secure an ambitious 2030 target for EU cuts in greenhouse gases. This European leadership has been significant in accelerating political momentum into the Lima talks and beyond, through to the crucial Paris summit on climate change next year.
John Robertson
I congratulate the Secretary of State on what happened in Lima. Let us hope that when we get to Paris we can solidify all the things that were talked about.
Secretary of State, I sent your Department, Ofgem, the chief executive officers of the big six companies and many other interested groups a copy of a report that I did for the Energy and Climate Change Committee on how to help the safety of vulnerable people at times of need. Everyone except your Department and Ofgem has replied: why? All the others have contributed to a voluntary code of practice, and I am happy about that. Why cannot DECC and Ofgem put people before political point-scoring?
Mr Speaker
I do not have a Department and I have not failed to reply, but if someone has I am sure he or she will take responsibility.
Sir Nick Harvey (North Devon) (LD)
T2. My right hon. Friend will be aware that the marine energy sector has recently had bad news with the proposed sale of Marine Current Turbines by Siemens and Pelamis going into administration. In the light of fierce competition from France, which has signed partnership agreements to develop two schemes off the Brittany coast, what is he going to do keep the UK at the forefront of this, and will he promote opportunities such as those off Lynton and Lynmouth as a way of doing so?
Mr Davey
My hon. Friend is right to say that we have had some disappointing announcements on Marine Current Turbines and Pelamis, which is unsettling for those companies and the families involved. However, there has been some good news: as I said to the hon. Member for Ynys Môn (Albert Owen), MeyGen is the world’s first tidal array project, and I think that the Lynton and Lynmouth demonstration zones will be able to take forward further tidal arrays. The fact that we are looking very intensively into tidal lagoon power is a real shot in the arm for the tidal industry.
Caroline Flint (Don Valley) (Lab)
May I take this opportunity to wish you, Mr Speaker, and all hon. Members a very happy Christmas? May I also wish the Secretary of State good luck, as I understand he is appearing in pantomime this Christmas? I am sure that we all want to wish him the best of luck. It is good to know that the Liberal Democrats are beginning to think about their career options after the next election.
Caroline Flint
I understand that he is playing a drunken monk in “Robin Hood”.
The best way to help households permanently to cut their energy bills is to make their homes more energy-efficient. According to the Government’s own figures, 5 million households would still benefit from cavity wall insulation and over 7 million would benefit from loft insulation. Why, then, has the number of households getting loft and cavity wall insulation fallen by more than half compared with last year?
Mr Davey
First, Mr Speaker, may I wish you, the right hon. Lady and all other right hon. and hon. Members a happy Christmas? I am afraid that those who wanted to buy a ticket for the pantomime at the last moment will be disappointed, because I appeared with St Paul’s Players in Chessington two weeks ago; I should have given more notice. It was “Robin Hood”, and some of us originally from Nottingham believe in some of those principles.
The right hon. Lady asked a very important question about energy efficiency. She will know that our approach has been to go after measures not only on loft insulation and cavity wall insulation—which are very important but declining in terms of availability and options because so much has been done—but on solid wall insulation, which is more expensive but vital for tackling fuel poverty and climate change.
Caroline Flint
The Secretary of State does not want to admit it, but the reason so few households are getting help is that the Government caved in to the energy companies and cut the number of households they have to help. The chaos does not stop there. The latest round of the green deal home improvement fund for solid walls opened last Wednesday and closed the very next day. This is not just incompetent but wasteful. Instead of just giving money away, we could make the funding go further, in a fairer way, if it was used to support zero-interest loans for energy-efficiency, as we have proposed in our green paper.
Mr Davey
The right hon. Lady picks an odd day to ask about energy-efficiency when we have announced 1 million energy-efficiency measures through the green deal and the energy companies obligation. The solid wall part of the green deal home improvement fund had to close early because it was so popular and successful, so for the right hon. Lady to criticise that is remarkable. All those people who will benefit from that measure will note her words.
Mr Speaker
It was a very good question; it was not about the money resolution for the Affordable Homes Bill, either.
Mr Davey
I am grateful to my hon. Friend for that question. In our community energy strategy and our work with both the solar and the onshore wind industries, we have stressed the importance of community benefits, and that is having a marked effect. We have enabled that through voluntary protocols, community benefit registers and the like. We have accepted and are taking forward the report of the shared ownership stakeholder group, which has also shown that people can be directly involved and have a stake in local renewable energy projects.
Mr John Spellar (Warley) (Lab)
T7. Following the story in The Sun today, may I congratulate the Secretary of State on slapping down his jobsworth official by wishing us all a merry Christmas, and may I reciprocate those wishes? May I also take him back to the reply given to me at the last Energy questions by the Under-Secretary of State for Energy and Climate Change, the hon. Member for Hastings and Rye (Amber Rudd), who claimed:“There will be no blackouts this winter”?—[Official Report, 6 November 2014; Vol. 587, c. 951.]Does the Secretary of State agree with her?
Miss Anne McIntosh (Thirsk and Malton) (Con)
T6. May I correct my right hon. Friend the Minister of State on one point? Other than one example, there has been no deep well fracking for shale gas in this country. In Fylde, self-regulation and self-monitoring were proved disastrously wrong. Will he give the House a commitment that there will be no self-monitoring or self-regulation but a very cautious approach, and that the regulatory authorities will monitor seismic and other aspects of fracking at depth for shale gas?
Mr Davey
I am delighted that the hon. Gentleman agrees with us that the green investment bank has been a huge success. We have seen it develop further, and we are keen to see it develop still further. He will know that my right hon. Friend the Business Secretary and I are in agreement that our manifesto will say that the bank will be given borrowing powers.
Gregory Barker (Bexhill and Battle) (Con)
May I congratulate my right hon. Friend on the important role he played at Lima, along with our excellent team of negotiating officials, but does he agree that there is much more to do? Perhaps the single most important thing that the UK could do in the coming year, in the run-up to Paris, is to demonstrate to the world that a country can grow its economy strongly—we have strong economic growth—at the same time as reducing emissions.
Mr Davey
My right hon. Friend is absolutely right, and I am grateful for his comments. One of the reasons I set up the green growth group in Europe was to push the argument that a country can grow and go green, and that argument has been won in the debate in the European Union. He may be interested to know that in Lima we worked with Latin American countries—particularly Peru, Costa Rica, Colombia and Mexico—because our Latin American friends now want their own green growth group.
Douglas Carswell (Clacton) (UKIP)
The Secretary of State reels off statistics about home insulation, rather like a Soviet-era apparatchik talking about tractor production. Thousands of homes in Jaywick were promised home insulation at the beginning of this year. Why, at the end of the year, have only a handful of homes had that insulation, and why has the promise that more homes would get it evaporated?
Mr Davey
I have to say that we have a very good record on energy-efficiency, as today’s announcement of 1 million energy-efficiency measures from the green deal and the ECO demonstrates. I do not know about the particular example in the hon. Gentleman’s constituency. I can tell him that because of some of the changes we made to the ECO this time last year, some energy- efficiency schemes have not gone ahead, but what has gone ahead is a £50 cut, on average, in people’s energy bills.
Mr Christopher Chope (Christchurch) (Con)
Does the Secretary of State think it is fair that at the public inquiry into the Navitus Bay offshore wind park, the applicants have in the middle of the inquiry put forward a separate and different application? It is now being considered alongside the original application, which has not been withdrawn. Is that not oppressive and a breach of the principles of the rule of law?
Nic Dakin (Scunthorpe) (Lab)
Even after the bodged, late and partial mitigation of the carbon floor price, it remains a tax on UK manufacturing that is unilateral to this country. When will the Government come forward with an energy policy to support our UK manufacturing that matches the best in Europe?
Dr Matthew Offord (Hendon) (Con)
It is disappointing that there has not been a ministerial statement about Lima this week, particularly given the warning from the Union of Concerned Scientists that the negotiators have left too many contentious issues unresolved before the deadline in Paris. Will the Secretary of State advise us why the deal is so good?
Mr Davey
In fact, if one follows the details, one finds that we secured more than we expected to on going into the Lima summit. The reason is that there were some good negotiations, particularly on the information that countries will have to supply in what are known as—I am sure that the House will have followed this closely—their intended nationally determined contributions, which will be announced in the first quarter of next year. Nailing that down was the key issue in Lima and we did so.
Dr Alan Whitehead (Southampton, Test) (Lab)
As the Secretary of State will recall, the Prime Minister said recently that now that 10% of power is supplied by onshore wind, onshore wind should seek its passage through the planning process. I am sure he is aware that in terms of operational schemes and schemes that have planning permission, it makes up far more than 10% of the system already. Does he propose to put the Prime Minister right on this, or does he intend to rescind planning permissions so that the Prime Minister does not look silly?
Mr Davey
I am slightly confused by the hon. Gentleman’s question because he misquotes what the Prime Minister said on Tuesday. The fact is that onshore wind supplies just over 5% of our electricity today. By 2020, with the onshore wind farms that are in the planning stage and with the assumption that some will not get through, we expect to get to about 10%.
David Mowat (Warrington South) (Con)
It is odd that we have nearly got to the end of DECC questions and nobody has mentioned nuclear power. To redress that, will the Secretary of State confirm that Hinkley Point C is going ahead at speed, and that the generation of power stations after Hinkley Point C at Sellafield, Wylfa and Sizewell are doing so as well?
Mr Davey
That is certainly our policy. We have managed to agree commercial heads of terms, as my hon. Friend knows. We have received state aid clearance for Hinkley Point C. We are in final negotiations with EDF and it is putting together its consortium of investors. We are not at the point of a final investment decision, but we are getting closer.
Kevin Brennan (Cardiff West) (Lab)
What is the Secretary of State’s position on fracking, particularly following the news that New York state has decided to ban it?
Mr Davey
I am sure that the hon. Gentleman would like every Government to follow everything that New York state does, but we are an independent country and we make our own decisions. He will know that the Government’s policy on fracking is to support it through a robust and strong regulatory regime to ensure that health and safety and environmental concerns are fully taken into account, but also that we can exploit this important resource.
Philip Davies (Shipley) (Con)
When people voted for the Climate Change Act 2008 in the last Parliament, we were told that if we passed that legislation, every other country would follow suit. Have not the Lima negotiations proved that to be a complete and utter load of old cobblers, like much of what the Secretary of State says? If what I am saying is wrong, why, in a recent Westminster Hall debate, did Labour MP after Labour MP, many of whom voted for the Climate Change Act, complain that it was doing untold damage to the steel industry?
Mr Davey
I think that my last answer to the hon. Gentleman, in which I recommended EU product regulations as very effective in reducing his constituents’ bills, must have annoyed him a tad. The UK’s leadership on climate change is acknowledged not just in this country or in Europe but around the world. We are taking forward the climate change negotiations successfully and I look forward to a successful agreement in Paris. The one thing that we have to achieve next year is to ensure that the deal is ambitious enough.
Albert Owen (Ynys Môn) (Lab)
The Secretary of State will be aware that the Energy and Climate Change Committee has produced a report on small nuclear reactors. May we have a quick response from the Government very early in the new year? When we produced a report on fracking in 2010, it took three or four years before it became a flagship policy of the Government. We could go on to lose the opportunity.
Kerry McCarthy (Bristol East) (Lab)
Analysis by climate change scientists of pledges made by Governments at Lima shows that the world is currently at risk of experiencing about 3° C of global warming. What can be done to reduce the global ambition gap on emissions by the time of the Paris summit, so that we do not cross the 2° C threshold?
Mr Davey
The hon. Lady is right that there is a real risk that when all the countries make their pledges next year, we will be some way short of what is required to keep global temperatures below the limit of a 2° C rise, which is what scientists say we need to achieve. We are doing a lot of work, not just in this country but in Europe and beyond, to see what can be done. There are pre-2020 measures that we should focus on, because the treaty would not come into effect before then. That is one reason why, when we negotiated the EU 2030 package, the phrase “at least” 40% was important—it gave us a chance to raise our ambition levels in Europe if we can persuade others across the world to do so.
Charlie Elphicke (Dover) (Con)
The villagers of Shepherdswell in my constituency are concerned about plans for onshore gas exploration there. They are adjacent to an area of outstanding natural beauty, so will the Minister restate the guidance on that matter?
Mr Mike Weir (Angus) (SNP)
Many offshore wind developers have expressed concern that owing to the structure of the current contracts for difference allocation round, only one development will be given a CfD, imperilling many of the others. Can the Secretary of State give them any reassurance that there will be greater consideration of offshore wind in future CfD allocations?
Mr Davey
First, it is worth putting it on the record, as it is Christmas, that Britain leads the world in offshore wind, with more offshore wind farms installed than in the rest of the world combined. In the current round of CfD allocations—of course, it has not been completed yet, so I cannot talk about the details—we have ensured that we have sufficient allocation for offshore wind, but we have also ensured that the levy control framework includes further allocations for it, so that the consumer can benefit from dropping prices.
Nia Griffith (Llanelli) (Lab)
The Secretary of State has mentioned the cuts in the energy companies obligation. When those cuts were made, Ministers made it clear that it would not be acceptable if energy companies did not pass them on to consumers. Will the Secretary of State explain why 4 million households have still not received the full saving and what he intends to do about it?
Mr Davey
I do not recognise the figures that the hon. Lady gives, and I have to tell her that the energy companies obligation is one of the most successful energy efficiency policies ever implemented. A huge number of steps are being taken, and I hope that any future Government will continue and build upon them. We have given the industry much greater stability—it has never before had three years of reassurance about the future regime, which we gave it last year.
Andrew Gwynne
The Government claimed that the green deal would be the largest home improvement programme since the second world war. If that is correct, will the Secretary of State tell the House why fewer than 3,500 homes have had work done?
Mr Davey
The hon. Gentleman’s figures are, shall we say, inaccurate. Our analysis shows that large numbers of people—getting on for 350,000—have had green deal assessments, and more than 80% of those have either gone on to have that work done or plan to have it. There are now nearly 8,000 green deal finance plans, and that number is increasing. Although I will happily admit that the green deal has not been as successful as we had hoped, we have learned a lot of lessons and a lot of measures have been taken because of the green deal.