Oral Answers to Questions
Debate between Graham Stringer and Ed Davey(10 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Davey
We are actively involved in discussions with the European Commission on this vital state aid notification and have been meeting it over the summer. Most recently, officials met Vice-President Almunia’s team in Brussels yesterday, and I had a report yesterday evening. Those discussions are intense and, I think, very constructive.
Graham Stringer (Blackley and Broughton) (Lab)
T6. The Government are supporting the roll-out of smart meters that are not so smart: they cannot communicate with smartphones. When will Ministers rectify this failure of Government policy?
Energy Company Licence Revocation
Debate between Graham Stringer and Ed Davey(10 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Davey
I congratulate the hon. Gentleman on getting that question into this debate. I say gently to him that on CfD and state aid we have clearance, so presumably the Commission has examined that matter. I have not specifically asked it that question, but it has given us state-aid clearance. The way we have proceeded with the allocation proposals for CfD is to ensure that we get just that investor confidence, and the fact that we are seeing such interest and such investment is tantamount to showing that we have it right.
Failing to focus on competition is a serious mistake by the Opposition, because many smaller suppliers competing against Labour’s big six are doing so not just on price but on the basis of better customer service. If we talk to the independents about their business model, we hear some of them say that higher quality customer service is their main competitive edge. The growth of competition since 2010 suggests that they are right and that competition has a key role to play here. From less than 1% of the market, the small suppliers now have more than 7% and it is still growing. Customers now have more choice than ever, with 25 suppliers competing for their custom.
Small suppliers provide electricity to 2 million customers, and they have gained more than 1 million customers in the past 12 months. Clearly, customers are voting with their feet when they are not happy with the service they are getting. Yes, we need to make the competition rule work more effectively, which is why we support the independent Competition and Markets Authority in the most profound investigation of British energy markets ever seen.
It was telling to hear that the right hon. Lady does not intend to wait to hear the result of the Competition and Markets Authority investigation. She will prejudge the authority’s report. That is quite a revelation, which is worthy of more debate. We are not simply waiting for that report from the Competition and Markets Authority. We have already done so much to encourage new suppliers and to make switching easier, simpler and quicker. We believe that we must continue to sharpen the competition tool for consumers, so that when they are poorly treated, they can vote with their feet.
I am acutely aware that competition has not always worked for the most vulnerable in society, such as elderly people who might not be internet savvy. During my time as Secretary of State, I have placed a focus on new business models and new ways of helping such people—from collective switching to developing, with the voluntary sector, citizens advice bureau, Age Concern and so on, new forms of advice with the big energy saving network. Ofgem is also increasingly focused on how we can ensure that energy markets better serve the fuel poor and the less well off.
Graham Stringer (Blackley and Broughton) (Lab)
The implication of what the Secretary of State is saying is that he accepts that competition is imperfect at the present time. If we have a situation in which competition improves and there is better service all round, is he saying that when an energy company behaves in an appalling fashion they should be able, in all circumstances, to continue to supply energy to consumers and that there should not be the ultimate sanction of saying, “Your behaviour is so appalling that you no longer have the right to deliver gas and/or electricity in this country”?
Mr Davey
No, I am not saying that. If the hon. Gentleman waits for a second, I will put a lot of emphasis on tough regulation, but there needs to be a balance. There needs to be competition as well, because it can often work more quickly and more effectively, and it really hits the firms that are losing customers. Some of the big six have lost tens of thousands—in some cases, hundreds of thousands—of customers because we have enabled competition. I accept that things are not perfect yet, which is why we are working so hard.
Oral Answers to Questions
Debate between Graham Stringer and Ed Davey(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Graham Stringer (Blackley and Broughton) (Lab)
T2. The Minister of State previously showed faux concern for communities that are off gas grid. Is not the implication of the Government’s energy policy that many, many more communities will be without gas supply if gas supplies are switched off when the energy industry is electrified? When will he tell those communities that they will no longer be able to have gas?
UK Nuclear Energy Programme
Debate between Graham Stringer and Ed Davey
Graham Stringer (Blackley and Broughton) (Lab)
The Secretary of State uses his fight against climate change and the need to reduce emissions to justify charging twice the market rate for energy, but this country has one of the largest carbon footprints in the world and it is increasing because of emissions input. Why does he not talk about that failure of his policy? Will he tell us what he is going to do about it?
Mr Davey
I think the hon. Gentleman is talking about the fact that a lot of the products we import come from countries with high carbon intensity production processes. It might be a little harsh to describe this as a failure of my policy, but I know that the Select Committee and the Committee on Climate Change are interested in looking at that issue, and they should do so. In fact, this simply shows that we need a global treaty on climate change. One country cannot tackle it alone. We live in an interdependent world that has an interdependent economy and an interdependent climate. That is the answer for the hon. Gentleman: he needs to get behind the push for a global treaty on climate change.
Oral Answers to Questions
Debate between Graham Stringer and Ed Davey
Mr Davey
I am grateful for my hon. Friend’s question. I think that there is a case for a decarbonisation target for the power sector, but that is still subject to ongoing discussion in Government. We are in a coalition and we need to get Cabinet approval for a decision such as this. However, it is worth noting for the benefit of the House that it is not just the Climate Change Committee and the Select Committee that have called for a carbon limit on the power sector by 2020. More than 50 companies, third sector bodies and trade bodies recently signalled their support in an open letter. There is huge support from industry for this measure and I hope that we can win that argument in this House.
Graham Stringer (Blackley and Broughton) (Lab)
T3. Do Ministers not think that it would help the energy debate in this country if the costs of renewables were itemised separately on energy bills?
Mr Davey
The hon. Gentleman seems to suggest that there is a lack of transparency in the way in which energy costs are delivered. I have to say that I disagree with him. There are huge amounts of information about the different costs of green energy. He will know that the cost of renewables for bills is tiny and that the cost of energy efficiency schemes, such as the carbon emissions reduction target and the energy company obligation, is significantly greater. The real costs involved in and the real reason energy bills are going up are the rising price of wholesale gas on global markets and the need to invest in our distribution networks that need to be replaced. Those are the real drivers behind higher gas and electricity bills, and people who suggest otherwise should look at the facts.
Oral Answers to Questions
Debate between Graham Stringer and Ed Davey
Mr Davey
As the hon. Lady will know, a Department for Business, Innovation and Skills and Department of Energy and Climate Change consultation that has now closed looked at policies to help such energy-intensive industries. My right hon. Friend the Business Secretary will introduce some of the proposals, and we hope they will cover a range of industries.
Graham Stringer (Blackley and Broughton) (Lab)
18. What steps he plans to take to reduce the cost of energy bills for consumers.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
My Department is taking a number of steps to help consumers with energy bills. Programmes such as the carbon emissions reduction target, Warm Front, the green deal and the energy company obligation are helping to make more homes energy-efficient. The warm home discount provides direct help—worth £1.1 billion until 2015—to cut bills for 2 million low-income and vulnerable households. The voluntary agreement announced by the Deputy Prime Minister means suppliers will ensure that all consumers have good information on their supplier’s best tariff.
Graham Stringer
Those measures are trivial compared with the amount of subsidy going into wind farms, which has the effect of making rich landowners filthy rich, and by 2020 will put £1,000 per head on consumers’ energy bills. When is the Secretary of State going to change those policies so the consumer benefits, rather than rich landowners?
Mr Davey
I am afraid that the hon. Gentleman has got his facts wrong. The support for renewable energy costs 6p a day per household, and in this financial year the warm home discount will result in 1 million of the poorest pensioners getting a discount of £130—so I have to say the hon. Gentleman is wrong.
Mr Davey
I saw the press reports that made that allegation and I am afraid that I do not agree with them at all. The press article was trying to suggest that particular amounts of money that come from consumer bills to support the renewables industry was the top bit that would push people into fuel poverty. It was a very poor analysis and we completely reject it.
Graham Stringer (Blackley and Broughton) (Lab)
T7. The Minister failed to answer the question earlier about when shale gas would come on line, yet this source of energy would create real jobs and partially decarbonise the energy industry as well as lowering fuel bills. Why does he not get a move on?
Oral Answers to Questions
Debate between Graham Stringer and Ed Davey
Graham Stringer (Blackley and Broughton) (Lab)
17. What steps he is taking to reduce domestic energy bills.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Government are committed to reducing domestic energy bills, and have put energy efficiency at the heart of their energy policy. The green deal will drive the take-up of energy efficiency measures in homes, helping to reduce energy bills. In addition, the roll-out of smart meters will further reduce energy use. Vulnerable customers will also benefit from the warm home discount, which is worth £1.1 billion over four years.
Mr Davey
I am grateful to my hon. Friend for that question. There are two things I would point him to. We are helping small suppliers to compete by increasing the customer threshold for participation in schemes such as CERT and CESP—the carbon emissions reduction target and the community energy saving programme—and the warm home discount scheme. Ofgem is currently consulting on proposals for a mandatory auction in the wholesale electricity market to improve liquidity, and has recently completed a consultation on tariff simplification. All these measures will, we believe, help small suppliers in my hon. Friend’s constituency and elsewhere.
Graham Stringer
Will not the biggest impact on reducing domestic energy bills be achieved by bringing shale gas online as quickly as possible?
Mr Davey
I do not think so. We had a seminar at No. 10 recently, which the Prime Minister participated in, along with myself and the Business Secretary. We heard from experts in the shale gas industry who had been working in America and looking at the major opportunities in places such as Ukraine and China. They were clear that it would take some time for shale gas to be exploited in the UK. They were also clear that we needed strong regulation to proceed and that the shale gas reserves in this country are not quite as large as some people have been speculating.
Oral Answers to Questions
Debate between Graham Stringer and Ed Davey
Mr Davey
My hon. Friend is a huge champion of energy efficiency in his constituency, and he is absolutely right. It is the ECO scheme that is making such policies possible. As a result of such measures, we can move on to solid-wall insulation, which for too long has been a poor second cousin.
Graham Stringer (Blackley and Broughton) (Lab)
AF Consult estimates that huge savings could be made by changing the energy mix away from windmills. Why does the Energy Secretary not truly dash for gas and utilise the huge shale gas resources that are in Lancashire?
Mr Davey
We need to balance a range of priorities in energy policy, including energy security, affordable bills and tackling climate change. That is why this Government have a portfolio approach to energy generation. We are looking at low-carbon technologies, including wind power, carbon capture and storage, and new nuclear.