Cost of Living: Energy and Housing

John Hayes Excerpts

Thursday 5th June 2014 Commons Chamber

[Sir John Randall]

I recognise that, and I have been following the issue for some time. In fact, the measure would save me money because I would have to give out fewer carrier bags. However, we might also be put in an awkward position. My family’s store is not a convenience store and we sometimes sell quite high-value items. If someone has bought something for £200 and we then say, “It is 5p for a carrier bag”, that puts the retailer in a difficult position. I recognise what the hon. Lady says, but we do have to think about such a measure. I am an advocate of it, however, because it is environmentally desirable.

Fracking is a more controversial issue and we need some detailed thought on it. I heard what the Opposition spokesperson, the right hon. Member for Don Valley (Caroline Flint), said. There is uncertainty on both sides of the argument. I agree that fracking is not the only answer to our energy problems, but some of the stories put out to frighten people about someone turning up outside the back door with a rig ready to drill through their garden are false. We have to get the legislation right. Strong environmental concerns about water and all sorts of other issues have to be looked at carefully. I do not want us to rush into this because it is a fundamental issue. I hope that we can look at fracking in as non-partisan a way as possible because it is important for the future of our country.

Like my right hon. Friend the Member for Meriden (Mrs Spelman), the one thing in the Queen’s Speech that I am most delighted about is the introduction of a modern-day slavery Bill. Like her, I pay tribute to Anthony Steen of the Human Trafficking Foundation—I declare an interest as a trustee of that organisation—and to the right hon. Member for Birkenhead (Mr Field), with whom I have been privileged to sit both on the review that the Home Secretary asked him to carry out and on the scrutiny Committee for the draft Bill. For the past six months, since deciding to no longer keep an eye on my colleagues to ensure that they vote in the right way, I have devoted myself to that cause. As with so many things, modern-day slavery is something that people cannot ignore once they find out about it.

Anyone who has watched and been appalled by “12 Years a Slave” must realise that almost the same sort of conditions exist for some people today—being kidnapped, having no escape or being too frightened to find any way out. If nothing else were to be done in this Session, we could still be a world leader with this Bill. It is the most important measure. There are things that the scrutiny Committee has advocated that were not in the draft Bill, and I look forward to seeing whether they will be incorporated—no doubt some will and some will not. I will reiterate a few of those recommendations.

My right hon. Friend the Member for Meriden mentioned the Proceeds of Crime Act 2002 and things that we could be doing. We want not only increased penalties, but to ensure that the activity is simply not lucrative. As with a lot of crime, but particularly modern-day slavery, one of the problems is that by the time of conviction the criminals have moved all their ill-gotten gains around the world. In Italy, where the authorities have experience with the mafia, they now freeze assets on arrest. I hope that we can go some way down that line. It does not mean confiscation; it is simply freezing. People are allowed something to exist on, because they remain innocent until proven guilty, but we have to look at such a measure in order to stop the goods and money being taken away. Otherwise, for some of these people, five years in jail is nothing, as long as they have the billions when they come out. During debate on the Children and Families Bill, some Members in the other place were advocating guardians for trafficked children. Such a measure has to be included for child victims of modern-day slavery—I think the Government will do so, because they said that they would.

[The Minister without Portfolio (Mr John Hayes)]

I thank my right hon. Friend and the other members of the pre-legislative scrutiny Committee for their work. Does he acknowledge that the role of the new anti-slavery commissioner will very much be to co-ordinate the law-enforcement process, including internationally, where international co-operation plays the part that he describes? Clearly, in consideration of the Bill, the role of the commissioner can be looked at in some detail in that regard.

[Sir John Randall]

I agree with my right hon. Friend. I am a little cautious, for understandable governmental reasons, about ensuring the independence of the commissioner. No one likes to give up power entirely. The commissioner’s role will be important, but we have to recognise that to a great extent, the commissioner will have to have independence from Departments. That is another aspect.

My right hon. Friend the Member for Meriden talked about the supply chain and ensuring that businesses have due regard. I am sure that that theme will be raised on Tuesday when we are discussing home affairs and certainly when we debate the Bill itself. It is one of the most controversial issues, but it is essential. How far that is put into legislation will have to be discussed. I know that the Government, rightly, do not want to burden businesses with unnecessary regulation, but I think that most businesses, as my right hon. Friend the Member for Meriden said, will want such provision for their own reputational advantage, so that they are seen not merely to pay lip service to having no slavery in their supply chain but to ensure that they do not. Nobody can be sure at any particular stage and some of the evidence we heard over recent months has put me off purchasing all sorts of items. For example, many of the prawns we get in this country, from Thailand and elsewhere, are produced in conditions, which, if we knew more about them, would make us very wary of buying them.

--- Later in debate ---

[Mr Mike Weir (Angus) (SNP)]

I am pleased to follow the right hon. Member for Uxbridge and South Ruislip (Sir John Randall), who made some good points, particularly about the modern slavery Bill, and some effective comments about immigration and what happens to youngsters coming into the country. I think that that is something on which we could all agree.

I am pleased to make a small contribution to the debate and, perhaps unsurprisingly, would like principally to address some issues about energy. I am somewhat perplexed by the apparent headlong rush to do everything possible to allow fracking to take place. I remain sceptical about the potential of fracking and would be more cautious about taking it forward, because despite all the claims that are made of a new energy revolution, the situation in the UK is vastly different from that in the United States, and even there considerable controversy surrounds the technology.

Much of central and eastern Scotland, including parts of my constituency, is included in the latest map of possible sites for unconventional oil and gas. It seems to me, however, that we need to take a balanced, responsible and evidence-based approach, listening to the concerns of communities, and to proceed with caution. I particularly wanted to raise this issue, because I am a little unclear as to what is proposed in the infrastructure Bill. In Scotland, the situation is different from that in England. Although onshore oil and gas is vested in the Crown and subject to the same licensing regime at present as the remainder of the UK, planning law is devolved and the law of property is also significantly different, and both are the responsibility of the Scottish Parliament.

The changes to the law to allow fracking under properties without owners’ permission has already produced a considerable public response. In fact, I received a number of e-mails on the subject overnight. Although I accept what the right hon. Member for Uxbridge and South Ruislip said about the amount of misinformation and misapprehension over what is meant by those changes, I had assumed that the proposed changes to the law would not affect Scotland, since property and land law is a devolved matter. However, the notes to the Queen’s Speech issued by the No. 10 press office state, in relation to the infrastructure Bill:

“Subject to consultation, this Bill would support development of gas and oil from shale and geothermal energy by clarifying and streamlining the underground access regime.”

Furthermore, in a section headed “Devolution” it goes on to say:

“The provisions relating to roads, Nationally Significant Infrastructure Projects, planning consents for local projects and public sector land assets would apply only to England. The provisions relating to the local land charge aspects of the Land Registry and invasive non-native species would apply to England and Wales. Where the Bill deals with devolved matters, we are engaging with the Devolved Administrations as needed.”

Now, that raises a question in my mind: what is the situation with

“streamlining the underground access regime”,

as the notes put it? Can the Minister clarify whether it is the Government’s intention to seek changes in Scotland on these issues or is it indeed a specific matter for England? I had understood that the problem was with the specific English law of trespass, a law that is different in Scotland. If the Government’s intention is the former, what specific changes are they seeking? Many questions are being asked by my constituents and I do not want to give them false information, so I need to be clear about exactly what is happening and how far it will affect them.

The notes also refers to the future of North sea oil and gas and the report from Sir Ian Wood on maximising economic recovery of oil and gas reserves. This report perhaps already holds a special place in history as the only review to which both the UK Government and the Scottish Government, and almost everyone in between, has subscribed, even though it has some fairly uncomfortable things to say to both Government and industry. We will, of course, look closely at the part of the Bill that seeks to implement the proposals, although we have a different view of the future—these matters will become academic for this place following September’s referendum.

It will, however, be interesting to see how the Government propose to proceed. They say that they will

“introduce a levy-making power so that the costs of funding a larger, better resourced regulator can be paid for by industry rather than by the taxpayer as is currently the case.”

I support that objective, but as other parties now seem to be falling over themselves to offer some crumbs of further devolution to fight off the growing momentum towards a yes vote, it will be interesting to see whether that includes basing the proposed new regulator in Aberdeen, the oil capital of Europe, or whether it will be yet another London-based outfit.

What the Gracious Speech did not do was tackle some of the many issues affecting the energy industry and consumers in Scotland and throughout other parts of the United Kingdom. Over the years in this House, I have repeatedly raised the issue of the unfair transmission charging regime that increases costs for generators, particularly renewable generators, in Scotland, adding to the costs of producing energy, which are invariably passed on to the consumers. After much pressing, Ofgem finally came up with Project TransmiT, which seems to be interminable. Although far from perfect, the proposal was to make some changes to the regime that would have benefited renewable generation, particularly in Scotland, yet its implementation has been postponed yet again and is now promised for sometime next spring.

The project has been postponed several times, and energy producers and consumers continue to pay more. Dealing with such issues could do a lot to help ameliorate the costs that consumers must pay towards their energy. If this Government are truly intent on enhancing the United Kingdom’s energy independence and security, as stated in the Gracious Speech, they need to get a grip and ensure that we have a regime that truly encourages the growth of renewable energy, which will not only create jobs but, as I said, ensure lower prices to consumers in the longer term.

There are many other issues that impact upon energy consumers and the cost of living of specific groups which could be dealt with to give real benefit and relief, but yet again they are completely missing from the Gracious Speech. It is interesting to note in passing that much was said earlier by the Secretary of State about companies voluntarily freezing prices. That has undoubtedly happened in some cases, but as those of us who looked at price freezes in another context know, it comes at a cost. There is no magic bullet. Along with its proposal to freeze prices, Scottish and Southern Energy announced significant job losses and pulled out of several investment projects. That must be borne in mind when thinking about such a proposal. It is not a one-way street.

I have long championed the cause of introducing a simple measure that would help pensioners who live off the gas grid, and have introduced two Bills on the matter, as well as raising it during the passage of various energy Bills. I may well take part in the ballot for private Members’ Bills and, if successful, introduce such a Bill again. The simple fact is that those who are off the gas grid pay higher costs than those on the grid, and pensioners are particularly badly hit. The problem in many rural areas is exacerbated by the fact that much of the housing is old and of construction that makes it very difficult to install energy-saving methods, such as cavity wall insulation.

Of course, those households will continue to receive the same winter fuel allowances as pensioners on the gas grid, but the crucial difference is how the energy is delivered. Those who are on the gas grid will receive their winter fuel bill around the time that the winter fuel allowance is generally paid, and the system therefore works very well for them. Indeed, in their explanatory notes to the regulations that last amended the benefit, the previous Government said specifically:

“They are paid in a lump sum each winter to ensure that money is available when fuel bills arrive.”

That is not the case for those who are off the gas grid. They face the difficulty that they have to pay for their liquefied petroleum gas or home fuel oil up front at the beginning of winter, well before they have the benefit of the winter fuel allowance. Many find it difficult to do so and may well not fill up the tank completely, leaving them having to do so in the depths of winter, which brings problems of its own.

When the Office of Fair Trading looked at the market a few years back, it found that there were many competing suppliers in the market. By definition, many of these were small suppliers, and although some of the larger players will offer greater flexibility for payment, many smaller ones are unable to so. The price of fuel is rising, often quite substantially as winter approaches, and even those suppliers who offer a fixed winter price will do so at a price higher than the summer price. There is also the problem of getting a delivery. Members will recall the dreadful weather two winters ago, during which many of my constituents faced huge difficulties in getting their tanks filled up, some being left with no fuel in the run-up to Christmas. That was perhaps exceptional, but it shows the additional problems that off-grid consumers face.

I am very pleased that the Labour Opposition have now supported the measure. I welcomed it when they did so and I welcome it again today, but the cynic in me notes in passing that I have now had support from all three of the other parties in the House for the measure. Unfortunately, it has always been when they were in opposition, not when they were in government. I hope that in the event of a change of Government, this time we will see an all-party approach to try to get the matter dealt with finally. It is an issue that has been going on for years and it is a simple matter that could make a real difference.

As I said, my Bill put forward a suggestion as to how we might tackle the problem, as was mentioned earlier by the hon. Member for Ogmore (Huw Irranca-Davies), by paying the winter fuel allowance earlier. The regulations could be amended simply by changing the date on which it is paid to off-grid customers. The scale of the problem was highlighted this week by a report from Scotland’s Rural College which showed that nearly 60% of the over-60s in rural areas are in fuel poverty, compared with 45% in urban areas. That is a truly shocking statistic. We need urgent action to tackle this situation.

The other point that I have often raised and will raise again is that there are no proposals in the Gracious Speech to tackle the problems of off-grid consumers under the present green deal. That is not working as well as it should, partly because it is left to the energy companies to set up and administer. There is such a complete lack of trust among consumers towards energy companies that many will not take up any deal offered by them. One example that I raised earlier and will mention again relates to the lack of ability to get a home fuel or LPG boiler under the energy company obligation scheme.

In Scotland the situation is slightly different. Under the home energy efficiency programme, the old scheme partly for central heating that was introduced by the Scottish Parliament, it is possible to get an off-grid boiler if it is replacing part of the central heating scheme. As I understand it, this is not available in other parts of the United Kingdom and it is not available under the energy companies’ ECO scheme. We have repeatedly been told that ECO is technology-neutral but this is clearly not the case, as none of the companies will include off-grid boilers in their schemes. I appreciate that these boilers are more expensive than traditional boilers, but that rather emphasises the point that those who are off the gas grid are doubly penalised—they pay much higher prices and at the same time cannot get replacement equipment that would be more efficient. Surely there are economies of scale that could reduce prices if the companies offered such technology, but I suspect that it will take the Government to force them to do so.

I am disappointed that despite talking about this matter—I know that the Minister without Portfolio, the right hon. Member for South Holland and The Deepings (Mr Hayes) took an interest in it when he was an Energy Minister—the Government have not grasped the nettle and included provisions to deal with these issues. There is a missed opportunity in many of the proposals relating to energy, which could have made a real difference to people’s lives.

[Mr Hayes]

As the hon. Gentleman cited the impressive record that I had as the Energy Minister, will he acknowledge—I know he is very generous about these things—that we have made strides in greater transparency and clarity, at least in terms of tariffs, and that that progress was partly inspired by contributions from Members across the House, including him?

[Mr Weir]

I have always acknowledged that even off grid the Minister was responsible for setting up the ministerial round table which has opened up discussion on these issues. I acknowledge that, but what we need is action before next winter on these specific issues, because there are serious problems among pensioners in rural areas, and not just in Scotland. In the highlands of Scotland it is a particular issue, but it is also an issue in rural Wales, Northern Ireland and many parts of rural England. We need action on that. It is not expensive. It could be done relatively easily and I am disappointed that the issue has not been tackled.