Lindsay Hoyle
Main Page: Lindsay Hoyle (Speaker - Chorley)(11 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I remind hon. Members that an eight-minute limit on speeches has been imposed.
Barry Gardiner
The hon. Gentleman is right to focus on security of supply, which is an essential part of the future of the market. He said that the price of gas would go up and down in accordance with the cost of procuring it on the open market. Can he explain why the wholesalers who generate the electricity by means of that gas do not drop their retail prices when wholesale prices have dropped in the international markets?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I remind those who continue to intervene that they will be placed at the bottom of the list rather than the top, because they have already spoken? I am sure that they will want to save something for their speeches.
Gordon Birtwistle
I take the hon. Gentleman’s point, and I agree with him. Maybe it takes a while for the price of gas to go down. Gas is bought in advance, and gas bought six months hence could be a lot cheaper than that bought now, but the expensive gas might have to be used up before the cheaper gas can be used. I do not know the gas market; I am only trying to make the point that we are in a world market and we buy in those markets.
As for the idea of pooling—a suggestion made by the Opposition Front-Bench team—who will be the suppliers? We do not know who they are. That is an issue, but the main issue is that we have to be able to understand the tariffs. I do not understand the tariffs. I have been with the same supplier since I signed up many, many years ago. I buy my gas and electricity from British Gas, because it tells me that I am getting the best deal. Every time British Gas changes the tariff, it tells me what the tariff is and assures me that, because I am a loyal customer, I am on the bottom deal. I have never checked: I believe British Gas and I accept what it says, because basically I cannot be bothered to have a look. However, at the end of the day, we have to resolve the issue by ensuring that the people who can be bothered have a chance to do that, if they are able. The collective switching arrangement that has been suggested by the Secretary of State is an extremely good idea—certainly the arrangement is extremely good for Cornwall, where everybody can take advice from a switching consortium, as is the arrangement taken up in Oldham only yesterday. Indeed, the same thing can take place right across the country.
If I remember rightly, many years ago we had things called co-ops. We used to buy from the co-operative, which had itself made purchases, with discounts given through the system. I remember that my mother’s divvy number was No. 50, and we got a divvy every year from the savings that the co-op had achieved by buying in bulk and selling to the general public.
In the time I have left, I would like to talk about the real way to save money on electricity: by using less. If people use less, they obviously pay less. I would like to mention a scheme from my constituency of Burnley, where well over 15,000 properties got solid-wall insulation from outside cladding. It was done in co-operation with the Government, British Gas and the registered social landlord that owned the properties, a company called Calico. I took great notice of what happened—it was the biggest scheme in the UK, I was told—and I have since followed it up and visited quite a number of people who had their properties done. I said to them, “Apart from the house looking a lot better than before—you’ve had the outside cladding done, your roof spaces all clad and all the new boilers fitted—can you tell me whether you have had a substantial change in your electricity bill?” The first gentleman I spoke to said to me, “The house is now so warm that I’ve persuaded my wife to turn the thermostat down, which in itself is a major achievement. I had my loft space insulated and my wife volunteered to turn down the thermostat, because it was now too warm to wear the extra jumper that she was wearing.”
When I asked people, “So have you found that by turning your thermostat down you have seen a major saving?” the answer every time was “Yes, and a substantial saving.” In one case, the gentleman had taken a note of the savings he had made, which were approaching 30%. No matter what tariff someone is on, no matter where they look for discounts and no matter what allowances are made for certain people, they will never, ever be able to get a 30% discount. The Government could not fund a 30% discount, the companies supplying the electricity could not give a discount of 30% and the tariff changes will never give a 30% discount. I believe that the way forward and the way to save money is to spend money on cavity-wall insulation—the outside stuff: I am not keen on filling the cavity with insulation, because that creates damp—plus everything that goes inside, plus the new high-efficiency boilers. That is why I welcome what happened in Burnley and why I welcome the new green deal, which will enable RSLs to provide such insulation on the properties they rent out, particularly in my constituency. I do not really accept that what is in today’s motion will change things.
Finally, on Ofgem, I have to say that I am definitely anti-quango. We have far too many quangos. The day we get rid of 90% of the quangos will be the day I can leave this place and say that I have really done something. However, we do not replace a quango that is inefficient with another quango. The way to do it is to get the existing quango to do its job. I hope that the Secretary of State will lean on Ofgem and make it do what it is paid to do and make it deliver to the general public what it is supposed to deliver. If Ofgem is not doing that, we should not change it, but get rid of the people in it who are not performing and replace them with people who will deliver what Ofgem is supposed to deliver.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am going to have to drop the limit to six minutes to get everybody in. [Interruption.] It is no use sighing with great disdain. If Members were a bit more careful and took up less time with interventions, this would not have happened. Let me remind Members: if you want to speak, try not to intervene; and if you do intervene, understand that you will end up at the bottom of the list.
David Mowat (Warrington South) (Con)
I want to draw attention to a couple of areas where I agree with Opposition Front Benchers. First, it is clear that the best way of making progress is better insulation. The green deal is fundamental to energy policy, and Ministers need to be accountable for making progress with it. It is also true that we need more transparency in the energy market. The hon. Member for Glasgow North East (Mr Bain) noted that there are 430 separate tariffs; that is unacceptable and it needs to be fixed. I understand that it will be fixed by next summer, but I am disappointed that it is taking so long. I also agree with Opposition Members that the market needs new entrants and that the process of new businesses coming in has been too slow.
Where I disagree with Opposition Members is on their lazy assumption that there is a cartel in operation—leaving aside the fact that that is a criminal offence, and that if they have evidence of it they should take it to the police. I intervened on the Secretary of State to point out that in the gas market we are 26th cheapest out of 27 in the European Union. If that is a cartel, it is not a very effective one. The reason we are so cheap has nothing to do with tax. In France and Germany, gas prices are 60% more expensive than ours, but that is a market effect difference not a tax difference. It would be good if we addressed some of that. On electricity, the position is less clear; our prices are not so cheap. Frankly, that has a lot to do with the decisions that we make in this House and the tariffs we impose on the market.
The gas market and the electricity market are two separate markets. We sometimes talk about them as though they are the same, but they are not. There is an issue with off-grid gas, as we have heard from several Members on both sides of the House. In the case of on-grid gas—Members can, by all means, intervene on me if they disagree, but we have had a three-hour debate that has been broadly fact-free—the evidence is that our prices are not more expensive than anywhere else. Other Members have talked about shale gas, and I will not go any further on that, other than to say that this morning, on the Henry hub, US gas prices were one quarter of our gas prices in the European balancing point. That will make a massive difference to the competitiveness of the US economy in a variety of ways. Even if we do not, or cannot, exploit our shale gas to that extent, we need to start to think about the differences in economics that will arise with America.
The three main policy areas in the electricity market are carbon and decarbonisation, which we must achieve, cost, and security. Interestingly, we sometimes assume that we are behind as regards carbon. It is true that we are behind France—with massive amounts of cheap nuclear energy, we use more carbon per head than the French by a long way—but we use a lot less per head than Germany, despite the fact that Germany has four times as much renewable energy as we have, because it continues to burn coal to a massive degree. That is what we need to address in terms of our decarbonisation agenda. The previous Government signed us up for renewables targets that were extremely onerous and will have only a minor impact on the amount of carbon that we use. The country that has reduced its carbon by the most over the past year or so is the United States as it has replaced coal with shale gas.
The big issue is security. Ofgem, which we are giving one of its routine kickings, has said that we will have about 4% surplus electricity capacity by 2015-16. We seem to be in a slow-motion car crash with electricity supply. The likelihood of there not being power cuts by the end of this decade is getting increasingly low. When the House starts to debate that issue, we will begin to make progress on what will really be important. One of the mechanisms by which we can avert this situation is imports. I gently say to the Minister that imports now represent about 10% of electricity in this country. That is a massive policy failure. French nuclear electricity and Dutch electricity is coming to this country, and there are no jobs in that.
I do not have much time to talk about costs. My hon. Friend the Member for Tiverton and Honiton (Neil Parish) made several good points about the somewhat hypocritical tone that this House can have in imposing costs that create fuel poverty and then beating up the people we perceive as being responsible for not somehow wishing those costs away. It is right that we—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We have 15 minutes left and three more speakers. I call Jamie Reed.