Fuel Poverty and Energy Efficiency

Kwasi Kwarteng Excerpts

Wednesday 16th January 2013 Commons Chamber

[Kwasi Kwarteng (Spelthorne) (Con)]

I am very grateful for the opportunity to speak in this important debate.

At the outset, we must establish a couple of facts. First, as we all know, the British Government are even now borrowing £100 billion a year, so the budget is very constrained. Secondly, despite the budgetary constraints and the economic pressure that we are all under, the coalition Government remain pledged to keeping the winter fuel allowance and to their environmental commitments in the green deal. Those are significant facts.

If we look at fuel prices—I notice that the right hon. Member for Don Valley (Caroline Flint) is chuntering in a sedentary position—over the past 20 or 30 years, it is an indisputable fact that privatisation led, in its initial phase, to a fall in prices. Competition and a degree of free enterprise reduced costs.

We all know that over the past 10 years in particular, costs have increased. That has been caused by two factors. The first, which has been alluded to by the Front-Bench speakers, is the increase in fossil fuel prices and energy prices. People have talked about the rise of China. The fact that it is developing quickly and consuming a huge amount of energy has put prices up.

The second factor, to which my hon. Friend the Member for Monmouth (David T. C. Davies) alluded, is green legislation. Members from across the House hold different views about the nature or reality—or the unreality if that is what they feel—of climate change. However, it is indisputable that the green legislation that was introduced to decarbonise our economy has added to fuel costs in the short run.

[Neil Parish (Tiverton and Honiton) (Con)]

As we use tariffs to increase electricity produced from wind turbines and solar power, we are subsidising that electricity through consumers. That will, in itself, push up the price of energy and bring about more fuel poverty. We must recognise that.

--- Later in debate ---

[Kwasi Kwarteng]

There must be a realisation that we cannot expect to regulate and put more taxes on activities, while at the same time expecting those activities to be cheaper. There must be some give in all of this. The Government have managed a balancing act pretty well in very difficult times. We can look—I intend to do so in the second half of my speech—at the record of the previous Labour Government, certainly between 1997 and 2010. In many ways they were deeply irresponsible on this issue.

Another factor that drives up costs is supply. In this rather lengthy debate on which we have embarked, no one—apart from a few comments from Opposition Members bashing private companies—has mentioned supply, yet that is crucial to cost. The previous Labour Government did nothing to secure this country’s long-term energy future. There was no planning or provision for energy supply.

[Christopher Pincher (Tamworth) (Con)]

My hon. Friend makes a point about supply. Is it not the case that during Labour’s years we started with 15 energy suppliers and ended with six? The Labour party reduced, not increased, the supply.

[Kwasi Kwarteng]

I am grateful to my hon. Friend for that pertinent remark. Not only was there a reduction, but there was no recognition of any long-term strategic need of this country.

[Nia Griffith]

Will the hon. Gentleman give way?

[Kwasi Kwarteng]

Forgive me. There was, however, a considerable amount of spending, and as the right hon. Member for Don Valley (Caroline Flint) has acknowledged, that spending was not particularly smart. It was not directed to the most vulnerable; Labour simply spread it around in their usual style and hoped they would get results as a consequence. Again, that was a deeply irresponsible way in which to conduct the public finances.

[Caroline Flint]

In a mature way I was honest about acknowledging that big Government schemes often have situations in which the service is not as good as it might be. Is the hon. Gentleman saying that helping 2 million people through Warm Front was not worth doing?

[Kwasi Kwarteng]

I am not saying that for a second. I am saying that it is one thing to spend money, but quite another to spend it effectively. Under the previous Labour Government, yes, it is true, the money was spent; they were world champions at spending public money and no one disputes that. I am, however, disputing whether that money was spent effectively. Many people—indeed, the electorate in 2010—believed that that money was not spent particularly effectively.

In the remaining moments of my speech let us look more closely at Labour’s record. As the hon. Member for Edinburgh West (Mike Crockart) pointed out, fuel poverty increased hugely during the Labour years. I am not so partisan as to say that it was all Labour’s fault, and I have acknowledged that there were rising fuel costs and that we were in a commodity cycle which meant that fuel costs were going to go up. It is a fact, however—such facts cannot simply be wished away—that fuel poverty increased dramatically under the previous Labour Government for the reasons I have outlined.

It is nauseating for Government Members to be lectured on fuel poverty by the right hon. Member for Don Valley and her friends, when their record was so dismal. The Government Front Bench are trying to do exactly the right thing under straitened economic circumstances and with difficult public finances. They are trying to get a fair deal not only for our constituents, but for businesses up and down the country. There is a recognition that a lot of interests are being balanced in a fair way.