Oral Answers to Questions
Debate between Gavin Shuker and Ed Davey(10 years, 3 months ago)
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Gavin Shuker (Luton South) (Lab/Co-op)
18. What steps he is taking to secure a legally binding global climate agreement.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
If we are to meet the objective of the convention and avoid dangerous climate change, it is imperative that we secure an international, legally binding agreement, with mitigation commitments for all, in Paris in 2015. To facilitate that, I have pressed our case at a number of international ministerial climate change meetings this year, as well as bilaterally with my counterparts in Governments and with other key actors across the globe, including in China, the US and India. I will, as usual, attend the United Nations framework convention on climate change ministerial conference of parties in December this year, and I will also attend the UN Secretary-General’s climate summit in September, which will be the first meeting of leaders focused solely on climate change since 2009. Closer to home, I am continuing to push for EU agreement to an ambitious 2030 emissions reduction target of at least 40%, including by convening the green growth group of Ministers.
Gavin Shuker
Climate change will affect the poorest people in the poorest parts of the world. Can the Secretary of State confirm that he is working with officials and Ministers at the Department for International Development, and that the Government are looking to make an announcement about initial capitalisation of the international green climate fund before the Ban Ki-moon summit?
Oral Answers to Questions
Debate between Gavin Shuker and Ed Davey
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
There are three main actions we are taking to help households with energy bills, including direct financial help, improving competition and energy efficiency. With direct financial help, the coalition introduced the warm home discount, which will take £140 off the energy bills of over 2 million of the poorest households this year. We permanently trebled cold weather payments, and we continue to spend over £2 billion a year on winter fuel payments. Last December, we reviewed Government policy costs, to take an average of £50 a year off a household’s bill.
Gavin Shuker
Today, 3.4 million people pay their energy bills with their credit cards. Although some will do that to manage their finances efficiently, half report that they are doing it because of the rising costs of energy. Is it not about time we had a price freeze?
Mr Davey
A bit of a non-sequitur there! We have made it very clear that we are doing everything we can to help the people on the lowest incomes, and we shall shortly be publishing our fuel poverty strategy, the first in more than a decade. It is interesting to note that when we considered how fuel poverty was measured under the previous Government, we found it was very inaccurate. We have therefore improved it so we can get to the people who are really struggling. The hon. Gentleman knows in his heart of hearts that the price freeze is a complete con. It will not help consumers, but it will undermine competition and prices will end up going up.
Grangemouth Refinery
Debate between Gavin Shuker and Ed Davey(11 years, 2 months ago)
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Mr Davey
I am grateful for that question. One of the first issues I had to deal with when I became Secretary of State was the potential for a tanker drivers’ dispute. I got very involved in thinking about energy security with respect to transport fuels. The Department has set up a unit that was not there before. When we talk about energy security, we normally mean the security of the electricity supply, but actually the issue is much wider than that. I have personally given a lot more focus to that than previously, particularly in respect of what the hon. Gentleman mentions—not just for Scotland, but for the whole UK. The review of refinery capacity is part of that, but only part; we have to look at a number of issues to make sure that the people who drive the cars, lorries and vans on the roads get the fuel they need, given the critical role that that transport sector plays for our economy.
Gavin Shuker (Luton South) (Lab/Co-op)
To what extent does the Secretary of State believe that the current structure of the industry—a small number of large sites, often with foreign owners—effectively stacks the deck in favour of those owners and against the needs of the wider community?
Gas Market Fraud
Debate between Gavin Shuker and Ed Davey(12 years, 1 month ago)
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Mr Davey
I draw a conclusion that we need stiff competition powers. When I was the Minister with responsibility for competition, I looked at the competition framework, the institutions and the laws that we had inherited from the last Government, and I felt that they needed to be toughened and strengthened. I therefore hope that my hon. Friend will support the Enterprise and Regulatory Reform Bill, which this Government have put before the House to make those reforms to competition powers.
Gavin Shuker (Luton South) (Lab/Co-op)
Was the Secretary of State personally made aware of any concerns about manipulation in the gas market—in general, not just specific terms—prior to last Friday?
Energy Market Reform
Debate between Gavin Shuker and Ed Davey(12 years, 2 months ago)
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Mr Davey
I want to make some progress and I will come to my hon. Friend in a moment.
The Government’s policies combine competition and energy saving, and are designed to drive a wedge between rising world energy prices and the actual energy bills that people in Britain end up paying—decoupling bills from prices. If tougher competition in the UK energy market can take the sting out of rising global prices, and if we can help people to use less energy, we can cushion families and firms.
In many ways, the right hon. Member for Don Valley (Caroline Flint) said similar things. She talked about competition and markets, and it was music to my ears. Where we differ, however, is in the detail, and in particular on how to generate the extra competition that she spoke eloquently about.
Mr Davey
No, I will make some progress and give way later.
When we consider competition in energy markets we must first separate the retail side from the wholesale side—or, in English, competition between firms that sell us energy and firms that generate it. There are, of course, many firms that are on both sides of that equation, just as there are policies to help on both sides.
Let me start with the suppliers, the retailers, the people to whom we pay our bills. We can drive competition in that area in two ways: by making the existing bigger players compete harder to keep their customers, and by enabling more firms to enter the market and grow—something on which the right hon. for Don Valley is rightly keen. Switching has, of course, been the principal way to do both those things, which is what happened by letting customers choose their supplier and forcing energy firms to offer better deals to hold on to customers. As the right hon. Lady rightly said, however, that system has not been working well, and switching has not helped the vast majority of people. In fact, it seems that switching rates have been falling just as prices have been rising. That bizarre finding seems to be the result of the virtual end of door-to-door selling which, as many of us know from our constituencies, was fraught with problems. Switching rates appear to have fallen in recent years, and those who continue to switch tend to be the internet savvy and often the more well-heeled, leaving the less well-heeled and less internet savvy out in the cold when it comes to getting the best deals. In essence, it is a very unsatisfactory situation.
The policy question is about whether we can promote competition through switching in other ways, or whether switching is simply not the way to go. I am delighted because it seems from the right hon. Lady’s speech that the Opposition have not given up on switching, and in fact they seem to be copying some of the policies that I first articulated. Since imitation is the sincerest form of flattery, I take that as a vote of confidence. For Members who may have missed that neat trick from the Labour Front Benches let me explain. The right hon. Lady talked about her commitment to collective switching, and she mentioned Labour’s “Switch Together” scheme. The Government support collective switching because we talked about it first. The right hon. Lady knows that the Labour party could have pushed that idea when in government, but it did not, and it was this coalition Government who got it.
When I was the Minister responsible for consumer affairs in the Department for Business, Innovation and Skills, I pushed the general notion of rekindling the spirit of co-operatives into different retail markets, and, in league with Co-operatives UK, I set up a competition to stimulate new ways for communities to buy things together. From that work, energy co-operatives emerged as among the most promising. That is because gas and electricity are pretty similar commodities, wherever and however people buy them, and because people are increasingly worried about their bills. However—this is crucial—many people find it too difficult to switch by themselves, and I have been addressing that problem. I have talked to a range of people about the barriers to collective switching, and I have got people—including Ofgem, the large energy companies or firms, and organisations capable of managing a collective switch—round the table where we have made real progress.
Regulatory barriers are coming down. Last week, we announced a nationwide competition, in which the winners, whether councils, community groups or others, will get seedcorn cash to help them get going. That national competition—not a Labour party competition—is called Cheaper Energy Together and should provide a boost to awareness and learning that could transform switching in the UK, not least because winning bids must show how they would involve the fuel poor in their schemes. If we are to see a revolution in switching, with collective switching, I will insist that the most vulnerable are part of that.
It must be slightly embarrassing for Labour Members to know that when they were in government, they did not use the collective principle to help people. It must be embarrassing because, although the current Government are using the collective principle to tackle fuel poverty, the Labour party did not. I am, however, genuinely delighted that the Opposition have overcome their embarrassment, and taken up our idea.
Mr Davey
The only way to ensure greater transparency is to have more liquid markets. That is the whole point of liquid markets. Without them, people cannot compete or buy and sell their electricity forward, and we cannot ensure price transparency. That ought to be welcomed by the Labour party. I would be worried if it set its face against greater liquidity in the forward market. It would be a very odd position to take.
I have spent some time explaining how our various policies will promote fiercer competition and help cut bills, and I have set out why I think the Opposition’s proposals are fundamentally flawed.
Gavin Shuker
What social obligations does the Secretary of State feel would be appropriate to place on energy companies?
Cost of Living
Debate between Gavin Shuker and Ed Davey(12 years, 7 months ago)
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Mr Davey
No, I will not.
Our first priority is to encourage consumers to switch suppliers, which could save households up to £200 per year. I am surprised that the right hon. Member for Don Valley was so negative about switching. The problem is that, despite rising prices, only one in six consumers switched their supplier in 2010. She was right that the number of people switching has been falling. There are several reasons for that, one of which, as she will know, is the plethora of energy tariffs. There are currently about 120 tariffs. We want fewer tariffs and much clearer pricing, so that customers can find a better deal more easily. That is the right approach. We support much of Ofgem’s work as part of its retail market review and will work with it to bring more transparency to the energy market.
Last month, my right hon. Friend the Deputy Prime Minister announced the deal that we secured working with the six big energy companies to give customers a guaranteed offer of the best tariff. From the autumn, suppliers will contact consumers annually to tell them which is the best tariff for their household, and if consumers call energy companies, they will have to offer them the best tariff. That is real progress—progress that Labour failed to make but which I have made in my first few months as Secretary of State.