Michael Fallon
Main Page: Michael Fallon (Conservative - Sevenoaks)
Nic Dakin (Scunthorpe) (Lab)
8. What steps he has taken to support energy-intensive industries.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
We recognise the competitiveness concerns of electricity-intensive industries, which is why the recent Budget included new compensation for the costs of the renewables obligation and feed-in tariffs, and capped the carbon price support mechanism. We are also providing compensation for the costs of the European Union emissions trading scheme, and to date we have paid out £31 million to 53 companies.
Margot James
Following the £7 billion package of support for the energy-intensive industries, EEF, the manufacturers’ organisation, said that it will
“help to level the playing field these companies need to compete effectively with others around the globe, and keep production here in the UK.”
What estimate has my right hon. Friend made of the potential for reshoring in the chemicals sector, now that conditions are so much more attractive to investors?
Michael Fallon
I am grateful to my hon. Friend for her question. By 2018-19, British business will have saved some £4 billion from the measures we have put in place. We have cut green taxes for households and now we are cutting green taxes for business. That should be a further incentive for the chemical industry not only to grow in this country, but to bring further investment back to the UK.
Nic Dakin
Will the Minister take this opportunity to guarantee to energy-intensive industries that the compensation for the carbon floor tax that this Government introduced will be backdated to the date from which the Government have promised compensation, which is April 2013?
Michael Fallon
Carbon price floor compensation is something that we are still pursuing with the Commission in Brussels. I am hopeful that that will be agreed soon. The state aid clearance procedures are lengthy in these cases. Obviously, we are continuing to press the case for backdating.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The carbon price floor tax introduced by this Government makes it four times harder for UK industry to compete with EU competitors. How many companies have received compensation for the carbon price floor tax? Is it more than one or fewer than one?
Michael Fallon
We have introduced compensation for the EU emissions trading system, as I have said. We have already paid out compensation to more than 50 companies in the steel, paper and chemical industries. Some of the major industries concerned have welcomed the further proposals that the Chancellor announced in the Budget, including Tata Steel, which said that the measures that were announced in the Budget
“will make an important difference to Tata Steel in the UK.”
Annette Brooke (Mid Dorset and North Poole) (LD)
6. What steps the Government are taking to help people who live in park homes to reduce their energy bills.
Graham Stringer (Blackley and Broughton) (Lab)
12. What recent assessment he has made of the effectiveness of Ofgem.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
The Government formally reviewed Ofgem’s role in 2011. Since that review, we have strengthened its powers to investigate and penalise market manipulation, and Ofgem has taken firm action to improve competition, including reforms of the retail and wholesale markets. Last week it proposed referring the energy markets to the competition authorities—the first ever such reference.
Graham Stringer
Finally, one might say, Ofgem has referred the six big energy companies to the Competition and Markets Authority. If the Minister reads the small print in Ofgem’s statement, however, he will find that it does not cover power generation. Is that not another failure by Ofgem to deal with the problem properly? It is not possible to deal with the issue if power generation is left out. Is it not time that Ofgem had the plug pulled on it and we had a real regulator with teeth?
Michael Fallon
I am afraid that the hon. Gentleman is not right about that. This reference is of the energy market; it includes power generation. Simply winding up Ofgem would mean that another regulator had to be set up in its place. Labour set up Ofgem, and now they want to abolish it, but they would have to set up another regulator. They seem to have a quango fetish.
Barry Gardiner (Brent North) (Lab)
Does the Minister of State agree with the consumer report published by Which? at the end of last year which said that consumers had been put out by £4 billion a year since 2010? If he does agree with that report, does he think it is consistent with the regulator having done a good job, as he has just assured the House it has done?
Michael Fallon
This Government and the regulator have introduced simpler tariffs and clearer bills and made it easier to switch. The regulator has fined companies a total of £30 million since 2011. Last year it fined a single company, SSE, £10.5 million.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Last December the Secretary of State declared that Ofgem was fit for purpose. Is not last week’s reference to the CMA evidence that it is not fit for purpose and needs to be scrapped?
Michael Fallon
It is Ofgem that made the reference, so I do not follow the hon. Lady’s logic. We have strengthened the powers of the regulator, and for the first time ever, the regulator has referred the energy markets to the competition authorities. That is evidence of a strong regulator doing its job.
Mel Stride (Central Devon) (Con)
13. What steps the Government is taking to ensure security of energy supply.
John Healey (Wentworth and Dearne) (Lab)
T3. The Secretary of State will know that almost alone among advanced economies, the UK economy is still smaller, and our industry is still producing less, than before the global financial crisis. Does he agree that strategic industries such as steelmaking are essential for growth that is more manufacturing-based and investment and export-led? While the Budget announcement of relief on the rising costs of the renewables obligation is very welcome, two years is too long to wait. Will he seriously consider the case that Tata and other energy-intensive users are making to bring this in sooner?
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
Tata Steel has made it clear that it welcomes the announcement in the Budget. It is important not to promise a scheme that could not necessarily be delivered by April 2015, because these schemes, like the others, take time to receive state aid clearance in Brussels.
Miss Anne McIntosh (Thirsk and Malton) (Con)
What are the procedures for a fracking permit to be issued for deep-well shale gas drilling, and what opportunities will those living locally have to express their concerns about the process in the planning application?
Michael Fallon
The process is that applicants must first have a licence and then receive planning permission from the local planning authority. They then need authorisation from the Health and Safety Executive for the method of fracking, permits from the Environment Agency concerning the protection of water and the environment, and, finally, a consent from the Department. The key to that process is that the major decision within it is local. It is a matter for the local planning authority to decide whether the application, on its merits, is appropriate for that particular site.
Mr Andy Slaughter (Hammersmith) (Lab)
T5. Almost 5,000 households in my constituency are living in fuel poverty. Apart from increasing energy bills by an average of £60 this year and cutting insulation projects by 90%, what is the Secretary of State doing on this issue? Please do not refer to the green deal, which is a complete flop. My constituents want a price freeze. Why does he prefer energy company profits over people who cannot afford to heat their homes?
Martin Vickers (Cleethorpes) (Con)
Despite much positive news in recent weeks, Ministers will be aware of the concern in the Yorkshire and Humber region following the decision in the recent funding round not to support Eggborough in converting to biomass. Will the Minister update the House on the future of biomass generation?
Michael Fallon
Biomass generation is one of the technologies that is receiving support under our final investment decision renewables round. We had some 16 applications, which include biomass generation, and we hope to be able to confirm the first investment contracts under that regime this month.
Michael Fallon
On 21 March, new proposals for a managed closure of the two collieries—not survival—were submitted to the Government on behalf of a number of interested parties and supported by the existing UK Coal management team. We have been considering those proposals with interested parties and with the Commission in Brussels. I am fully aware of the urgency of the situation and will continue to keep the House informed.
Barry Gardiner (Brent North) (Lab)
The Secretary of State rightly spoke of the importance of last week’s IPCC report on climate change. Will he tell the House of any new policy he is considering in the light of that report as a way of advancing progress from the UK on these matters?
Mr Dennis Skinner (Bolsover) (Lab)
If we can get away from the green deal for a bit, we can talk about 1,300 jobs that are going to go in two of the last three pits in Britain—people who work in the blackness of a coal mine. I want to know the answer to a question that Ministers have been asked on three separate occasions: was there a proposal to use the money from the mineworkers’ pension fund—not the protection fund—in order to save these two pits? Was it raised with the EU? What is the answer? It is time the Government came clean.
Michael Fallon
Let me be very clear: these issues are being and have been discussed with the unions. I had discussions with the unions last week and we continue to discuss the proposals with the Commission. Any proposal for taxpayer support would have to show good value for money and it would have to be for a clearly defined period. We continue to discuss the proposals for a managed closure with all the parties involved.