Oral Answers to Questions

Justine Greening Excerpts

Tuesday 6th September 2011 Commons Chamber

[Vernon Coaker (Gedling) (Lab)]

2. What assessment he has made of the effects on the economy of recent trends in domestic energy prices.

[The Economic Secretary to the Treasury (Justine Greening)]

The Office for Budget Responsibility is now responsible for independent economic and fiscal forecasts for the Government, and that includes taking account of trends in energy prices and their impact on the economy, including on inflation. The OBR will publish a fully updated forecast in the autumn.

[Vernon Coaker]

Thousands of people in my constituency of Gedling and millions across the country will be disappointed by that response from the Minister. Consumer Focus has said that, on average, energy bills will go up by £200 a year, which means that this winter many people —pensioners and families—will be worried about switching on gas and electricity. Has the Minister met the energy companies to discuss that, and will she specifically outline some measures that she and her Government intend to take so that people are not afraid to switch on the heating this winter?

[Justine Greening]

The hon. Gentleman is right to raise the issue because it is important. The challenge that we all face is to make sure that energy bills are affordable not just this winter—the point that he makes—but in winters in 10 and 20 years’ time. The problem that we have as a country is our dependency on fossil fuels. In the long term, we need to get ourselves off that dependency so that we are not so blown about by the international winds that see commodity prices go up and down. In the short term, we are taking steps to support the most vulnerable through the Warm Homes discount. Next year, we will introduce the green deal to help energy efficiency. The hon. Gentleman asks whether we have meetings with energy companies, and of course we do every day. I am sure that he will also—

[Mr Speaker]

Order. Progress is very slow, and it needs to get faster.

[Mr Mark Spencer (Sherwood) (Con)]

The Minister will be aware of how rapidly fuel and energy prices have increased. Am I right in thinking, however, that if the Chancellor had not taken action in the Budget, fuel prices would be 6p a litre higher today?

[Justine Greening]

My hon. Friend is absolutely right. The action that we took, which was part of a £1.9 billion package to support motorists, means that fuel duty was 6p lower than it otherwise would have been under the previous Government’s proposals.

[Mr David Hanson (Delyn) (Lab)]

The Minister will know that the rise of several hundred pounds in energy costs will hit businesses hard, and that on top of VAT and price and pay freezes it will particularly hit consumers and pensioners. What is her assessment of the level of that price rise? How many meetings has she had with energy companies about the price of energy? What does she intend to do about the price of energy other than freezing the level of winter fuel payments for pensioners?

[Justine Greening]

I think I have answered those questions already; and perhaps the right hon. Gentleman should speak to his Back Benchers about their asking his question before he does. I know that it is his wedding anniversary today, and I hope that I do not upset him too much before he has dinner with his wife tonight. I can again assure him that we are absolutely committed to making sure that the Warm Homes discount scheme will support the most vulnerable people in our country so that they can afford to heat their homes.

--- Later in debate ---

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

14. What recent assessment he has made of the potential effects on the rate of inflation of recent trends in domestic energy prices.

[The Economic Secretary to the Treasury (Justine Greening)]

The Office for Budget Responsibility assesses the prospects for inflation, which of course factors in any changes in prices from Budget 2011. It will update its forecast this autumn.

[Rushanara Ali]

I thank the Minister for her answer, but with rising energy prices, stagnating real-terms income and rising unemployment, I ask her again what specific actions will be taken to help the more than 4 million households in England and one in seven households in my constituency that will face fuel poverty this year?

[Justine Greening]

We have already taken action in previous Budgets, not least by taking people out of paying income tax altogether by raising the personal allowance. As we have heard, we reduced fuel duty, in contrast to the previous Government’s plans to increase it. More than that, we are making sure that we target help at vulnerable people through the Warm Homes discount and next year, of course, we will introduce the green deal to help everybody to make their homes more energy-efficient.

[Richard Graham (Gloucester) (Con)]

Does the Minister agree that although policies to help people out of income tax at the bottom level will show positive results, it is important to maintain the pressure to provide new apprenticeships so that high-value exporting manufacturers, such as Severn Glocon in my constituency, can continue to generate significant foreign exchange benefits.

[Justine Greening]

rose—

[Mr Speaker]

Order. The Minister will want to relate her answer to domestic energy prices. I feel sure that that is what she will do.

[Justine Greening]

I shall try. I am sure that many of those apprenticeships will be in green industry, which is part of how we hope to get this economy back on its feet.

[Mr Speaker]

We are grateful.