Offshore Wind Developments

Debate between Mike Weir and Albert Owen

Tuesday 6th January 2015 Westminster Hall

[Mr Weir]

We are in danger of having a debate within a debate. I will return to the points I was making on offshore wind, although nuclear power does come into this to some extent. If we are serious about the long-term development of offshore wind, we need clear targets and commitments for developers and we need to ensure that we give certainty to support supply chain investment and development. That would undoubtedly also involve providing the necessary conditions for competition, innovation and cost reduction, all of which are supposed to be the Government’s aims. Instead, there are mixed messages on energy policy and continuing uncertainty. Strike prices are set only to 2018-19 and the levy control framework is set only to 2020. There is no real commitment to a decarbonisation target. RenewableUK described the 2020 deadline as being like a cliff edge, because of the uncertainty on what comes after.

Those points were also raised in the Green Alliance report I mentioned, which concluded:

“The research has identified five actions the next government should take to realise the industrial and decarbonisation potential of offshore wind:

1. Set a 2030 carbon intensity target for the electricity sector of 50gCO2/kWh”—

given the Government’s previous response to that, I am not holding my breath—

“2. Confirm the scale of funding available to support delivery of low carbon energy infrastructure during the 2020s under the Levy Control Framework.

3. Provide more certainty for low carbon generators by confirming the timing of funding allocation rounds for the rest of this decade.

4. Stabilise the supply chain by committing to minimum levels of offshore wind deployment in the 2020s (dependent on generators meeting cost targets).

5. Draw on international experience to derisk UK offshore wind development and ensure a robust pipeline during the 2020s.”

The hon. Member for Upper Bann (David Simpson) made a point about the impact on the bill payer, which we also have to take into account. We cannot say that we will just pump money into any sort of development, irrespective of the impact on bill payers. It is not necessarily about putting more money into offshore wind. As I have said, by investing in offshore wind, we get more than just clean energy; we get industrial investment, jobs and the economic regeneration that many of us are looking for in our areas. It is about certainty and giving the industry a clear signal that the huge amounts of money it is putting into developing these projects will not be wasted and that there is a plan beyond 2020 to ensure that these developments will come on stream, produce energy and increase industrial investment.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate the hon. Gentleman on securing this debate. Is another big issue not the cost to projects of connecting to the national grid? Many of these offshore wind developments need new infrastructure and the grid. The grid has a long-term forward plan. If we have short-term CfDs, short-term investment needed for consent and no guarantees of grid connection, the whole situation is even more uncertain than he is outlining.

[Mr Weir]

The hon. Gentleman makes a good point. I have spoken on many occasions about the difficulties that grid connections pose for many renewable generators, particularly in more remote areas such as the north of Scotland. There are a huge number of issues in relation to that. To be fair, efforts are being made to address some of those problems with the proposals for new lines down the east and west coast of Scotland and various other connections, but those are long-term projects. They will not be done quickly. The point is also that although many of these offshore wind projects are looking for consents now, it will be several years before they come on stream. I understand that from getting a CfD, it can be up to three years before the first turbines are operating or in place. There is a long-term aspect, but it is not beyond the wit of regulators to bring the two together.

[Albert Owen]

I understand what the hon. Gentleman is saying, but the point I am trying to make is that each of the individual projects will have to meet the cost of grid connection. It would be better to have the national infrastructure of the National Grid acting in the national interest by ensuring that the cost is spread across the country and not met just by the individual projects. A new grid connection costs hundreds of millions of pounds, which can in many cases make a bid uneconomic. That is my point.

[Mr Weir]

Again, I do not disagree with the hon. Gentleman. He tempts me into a discussion about the postage stamp model of transmission charges, which is a similar issue, but I shall not go there because I am coming to a close and other people want to speak.

The industry also raised concerns about the levy control framework and called on the Government to address the political uncertainty about whether 2020 is a budgetary cliff edge. Offshore projects have a four to five-year horizon from being awarded a contract for difference to the commissioning of the first turbines. The industry is concerned that there is no clear indication about what will be available post 2020.

The Minister may say that it is difficult to give a clear indication about the future—indeed, we cannot be certain about what the Government will look like in six months, never mind six years—but giving some indication of the projected budgets and the intended direction of travel would go some way to addressing the industry’s concerns. Ministers have not been so reticent about nuclear energy. They have, in principle, agreed with EDF a contract for difference at Hinkley Point at a strike price of almost double the current wholesale price of electricity. That contract will last for 35 years—more than double the length for renewables. There seems to be a willingness to do more for nuclear than for offshore renewables, which provide a much better platform for clean energy and for the industrial regeneration that is required in many areas of our country.

Energy Company Charges

Debate between Mike Weir and Albert Owen

Tuesday 4th February 2014 Commons Chamber

[Albert Owen]

Yes, absolutely—I am coming to that.

I want to deal with a number of groups and issues, including the two main themes—vulnerable customers and choice, which the Government talk about all the time but which some people do not have. This is about helping and protecting vulnerable people, and that is the purpose of the motion. It is good to see that the proposer of the motion, the hon. Member for Harlow, is now here. I am taking over his role for a few minutes, but I am sure, Mr Deputy Speaker, that he will catch your eye and will not be penalised for being late.

There has been some progress on energy prices. Compared with a few years ago, bills are more transparent and a number of tariffs have been simplified. I pay tribute to Ofgem, the regulator, for setting up the retail market review, which was helpful, and to the work of hon. Members, including those who serve on the Energy and Climate Committee, which has been very proactive in holding the energy companies to account on tariffs and the price mechanisms in bills.

A few weeks ago—it seems like a long time ago now—we debated a proposed price freeze. Many people’s reaction was to say that it was a con. In terms of cons by political parties, we have to look closely at what the Prime Minister has said on several occasions about people going on to the cheapest tariff. The reality is that many people are adversely affected by prices. If they are off the gas grid, for instance, they will never get the best deal offered by energy companies because they cannot have the dual fuel discount. Equally, there are people on fixed charges and various other things that are built into the system. However, there is now simplification and the situation is improving regardless of legislation.

[Mr Mike Weir (Angus) (SNP)]

Is not the situation even worse than the hon. Gentleman suggests? Under the legislation, people on pre-payment meters, for example, can never get anything like the lowest tariffs available.

[Albert Owen]

Absolutely—that was my next point. These people are in vulnerable positions—not only those in houses in multiple occupation but those in rural areas. I know small estates in my area where people have these very high payments and are unable to get the best tariffs. It is a bit of a con. Although we passed the legislation and had those debates, it is worth putting this in its proper context, and I thank the hon. Gentleman for his intervention.

--- Later in debate ---

[Albert Owen]

My hon. Friend is absolutely right. I am sure that that issue will be addressed again as the Consumer Rights Bill goes through Parliament. I can remember a time when cash was cool. People went in on time and paid their bill in cash, and that was considered a good method of payment. Today, people are being penalised for exercising that very choice.

The hon. Member for Harlow has singled out companies in his early-day motions, but many companies have good practices. For instance, my supplier gives an early payment bonus to people who pay early by cheque or cash, or in other forms. There are mechanisms that can be used, but they need to be adopted by the whole industry.

[Mr Weir]

The hon. Gentleman is being generous in giving way. Does he not recognise that some companies claw money back, because they now charge for sending out paper bills?

[Albert Owen]

Yes.

Energy Bill [Lords]

Debate between Mike Weir and Albert Owen

Wednesday 14th September 2011 Commons Chamber

[Mr Weir]

I very much agree with the hon. Gentleman. I, too, have called for those changes. Earlier, I was trying to make the point that new clause 19 will not help those people at all because there are no tariffs in that market: there is a set price for the oil that they buy. One of my constituents told me that last winter the supplier would not quote them a price. They had to buy the oil, paying the price set on the day of delivery, as prices were volatile. Unlike gas and electricity consumers, they do not receive a bill so that they can look at those things; they are given a price, and so much oil is delivered.

[Albert Owen]

The hon. Gentleman is absolutely right, which is why those people need greater protection. The Office of Fair Trading is undertaking a review, and I hope that, rather than just refer something to the Competition Commission, it will come up with proposals and take action. I hope—and I know that the Minister is listening, because this is a serious issue—that people who are off-grid receive better protection in future. I shall certainly work with the Government—and I know that the Select Committee on Energy and Climate Change will do so, too—and help them to try to reach those people.

The hon. Gentleman made an important point about the contracts and the sums that individuals have to pay. The hon. Member for Hexham touched on that. I have received anecdotal evidence from my constituents that, during the big freeze in December last year, an individual in an isolated hamlet applied to have their tank filled up. They were told that they could have only half the amount that they usually received, and they were charged 50p a litre. Six weeks later, the company came to replenish the tank, and charged them 70p a litre. Members up and down the country will be familiar with such examples. Those people are suffering real hardship and are in fuel poverty, which is why we should all work together to ensure that people who are off-grid receive the proper protection afforded to those on the gas and electricity mains.

The new clause is a good measure, and we are moving towards clearer bills that include such information: informed people can make informed choices, as I have said. We need that information, and the choice of suppliers should extend beyond the big six. That has been mentioned, and the Government and Ofgem are looking at it. The proposal has cross-party support, because the monopoly enjoyed by the six companies that generate 80% of electricity and gas yet supply 99% of consumers does not produce a fair market. That is why we need intervention and tighter regulations, to achieve the outcome that we all want to achieve: price stability and clarity, so that people know from their bills what percentage of what they pay is going to fund energy efficiency measures, and what percentage is used for external measures such as transmission and so on. Transmission has not been discussed at great length, and it is ironic that people who live at the periphery of the United Kingdom, in areas that generate much of the electricity that goes to the grid, pay more for their electricity and gas than people in other areas.

Post Office Network

Debate between Mike Weir and Albert Owen

Tuesday 2nd November 2010 Westminster Hall

[Mr Mike Weir (Angus) (SNP)]

I congratulate the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) on securing this important debate.

I have been debating the issue of post offices in all the time I have been in the House, and throughout that time there has been a continual decline in their number. Just before the general election of 2001, there were 1,933 post offices in Scotland. By March of this year, the figure had declined to just 1,446. In many areas of Scotland, the decline has been worse than in others.

In my own constituency of Angus, we have lost a number of post offices despite vigorous opposition to their closure. I am pleased to say that, in the last closure programme, we managed to save three post offices through local campaigns in the constituency. However, there remains a problem with many post offices, as alluded to by the hon. Member for The Cotswolds. Some are now in insufficient premises. Three of the large towns in my constituency—Forfar, Kirriemuir and Montrose—are now down to one post office that serves the entire town. Often, there are large queues at those post offices, which causes great frustration for customers.

I note that the Government have said that there will be no more closure programmes, but as the hon. Gentleman rightly said, that does not necessarily mean that there will be no more closures, because many sub-post offices are still facing financial challenges, particularly in these difficult times. I suspect that there will continue to be closures for other reasons.

I do not want to get involved in a sterile argument about who is to blame for the most post office closures—whether it was the last Government or the Tory Government before that. The truth is that post offices have been closing for a number of years, and we should look at how we move post offices forward and prevent closures in the future.

It should be borne in mind that many of the remaining sub-post offices are not stand-alone post offices but are coupled with a shop, which is often the only shop left in the local community. Indeed, I can think of only two post offices in my constituency that are not part of another business. It seems to me that in the last few years, the Post Office has deliberately gone out of its way to get rid of stand-alone post offices and get postmasters to take post offices on as part of another business, which is an interesting development to note.

The post office business itself does not provide a living for those running the business, but it is an important part of the business—the two elements cross-subsidise each other. The loss of the post office business or any other part of the business could bring the whole business down. In my view, we need to find ways of ensuring that the whole business is more viable.

I point out to the Minister the example of what has happened in Scotland. The Scottish Government have introduced a business bonus scheme that provides relief to businesses with properties in Scotland with a combined rateable value of £18,000 or less. The scheme has now been expanded, and where the cumulative rateable value of the properties of a business falls between £18,000 and £25,000, the scheme will offer some relief—up to 25%—to individual properties. As a result, all properties with a rateable value of up to £10,000 pay no business rates; those properties with a rateable value of between £10,000 and £12,000 get relief of 50%; those properties between £12,000 and £18,000 get relief of 25%; and, as I explained, if the cumulative values of the properties of a business are up to £25,000, the business can also get 25% relief on individual properties.

That scheme has been a huge boost to small businesses in constituencies such as mine, where many were struggling with the rates, which is one of small businesses’ major costs. It has obviously helped small post offices in villages and towns throughout Scotland.

In addition, the Scottish Government have launched a post office diversification fund, which has recently made awards totalling £1 million to help post offices to diversify and launch new business activities, in order to strengthen the vital role that they play in our local communities. The fund opened in July, with 49 post offices in 22 areas bidding successfully and receiving awards of up to £25,000. Examples of the diversification schemes that were approved include setting up an internet café, which the hon. Member for Ynys Môn (Albert Owen) was talking about earlier, and selling local produce. Indeed, I believe that one of the successful schemes involved setting up a post office in a fish and chip shop. That shows that those who run post offices are really thinking about how to meet the challenge of the future. The Welsh Assembly has, I believe, taken similar measures to boost post offices.

Those are concrete examples of how relatively small sums of money can be utilised—

[Albert Owen]

The hon. Gentleman is making a very strong argument about rural post offices and indeed about some post offices in urban areas, including small towns. As he said, the diversification programme gives grants, but one of the drawbacks is that if a business suffers and has to close or change, it loses that grant. Is there not an issue with mutualisation? I hope that the Minister will refer to it in his winding-up speech. Businesses are uncertain about which part will be mutual and what assets actually belong to the postmaster and can be held on to by them.

[Mr Weir]

The hon. Gentleman makes a good point and I was going to come on to the question of mutualisation in a moment.

As I was saying, the examples I have just given are concrete examples of how relatively small sums of money can be utilised to help to strengthen the post office network and hopefully put it on a more secure financial footing, thus helping to boost economic growth in many rural communities where there is often little other economic activity.

Indeed, Mervyn Jones, the commercial director of the National Federation of SubPostmasters, commented on the Scottish scheme:

“This announcement of successful applicants by the Scottish Government is most welcome. It means that many sub-postmasters can now invest in their businesses which will help them make their post offices more viable. The success of this scheme demonstrates the commitment that both the Scottish Government and our sub-postmasters have in maintaining this vital community service.”

I also note that, in a briefing for this debate, the National Federation of SubPostmasters says:

“Local and devolved government should offer full, automatic small business rates relief to support post offices; and provide grant funding to enable improvements in post offices and their retail businesses.”

That is what the Scottish Government and the Welsh Assembly are already doing, so perhaps the Minister should consider doing it in the parts of England that could also benefit from such schemes.

However much help is given to sub-post offices, it will not assist them if the basic business is allowed to atrophy. We had a lively debate on the Postal Services Bill last week. The Minister will not be surprised to learn that I still oppose the privatisation of Royal Mail, but I am interested in some of the possibilities for the post office network that are contained in the Bill, and I would like to explore his intentions with regard to those possibilities.

In that debate on the Postal Services Bill, I asked if there was any international equivalent of what is being proposed in the Bill, whereby there would be a division between the mail carrier and the post offices. I did not get a response to that question; indeed, it is a question that the National Federation of SubPostmasters has also asked. I wonder whether the Minister can let us know today if such an example exists that we can look at, to see how the proposed system might operate.

Clearly, that matter is of some importance because much of the work of the existing network comes through the inter-business agreement between the two companies in the network. Once again, the National Federation of SubPostmasters has raised concerns that that agreement might not be continued after privatisation. I know that the Minister’s view is that the brand identities of Royal Mail and Post Office are so interlinked that it would be in their interests to continue, but I am not so sure, once commercial profit becomes the overriding motive of the privatised delivery service, that it will necessarily continue with that link rather than considering other links as ways of delivering services. The future of post offices, particularly those outside major urban centres, remains in danger.

I turn to the point raised by the hon. Member for Ynys Môn about the mutualisation of the Post Office. I am a huge supporter of mutuals, and the idea is interesting. I would genuinely like to know more from the Minister and the coalition Government about how they propose to take it forward and how it would work. As I said earlier, all but two of the post offices in my constituency form part of another business. In other areas, many are situated in branches of WH Smith, for example, or a local supermarket. The structure is diverse, and it is difficult to see how it might work as a mutual organisation. I am not saying that that is impossible, but I wish that he would give us more detail so we can consider it, especially before the Bill is debated in Committee. I think that many Members would be interested in supporting the concept of a mutual structure, but we need to know the detail of how it will work. There is a great reluctance simply to accept the concept without knowing exactly what is being proposed.

Many post offices are integrated with other parts of a business, so individual sub-postmasters are concerned to know how that will work in a mutual structure. As the hon. Member for Ynys Môn asked, will the post office or the whole business be part of the mutual? How will the mutual interrelate with the rest of the business? If the Minister can convince many of us that there is a way forward, I think he will be able to gain support for the mutualisation rather than the privatisation of Royal Mail.

The post office network continues to play a vital part in the life of local communities, even in its slimmed-down state, and I hope that it will continue to do so for many years to come. I also hope that the Minister is right in saying that the days of mass closures are behind us, but it seems to me that a great deal of uncertainty remains about the future of the post office network, given the privatisation of the mail carrier and the woolly nature of the privatisation proposals. He needs urgently to flesh out Government policy on mutualisation.

The devolved Administrations are doing much to help keep existing post offices open, but we need a clear path for the future of the whole network and the confidence for sub-postmasters to continue investing in their businesses. If mutualisation is to work, they need a much stronger say in how those businesses are run, but there must still be a link to the main carrier, Royal Mail.

Fuel Poverty (Rural Britain)

Debate between Mike Weir and Albert Owen

Wednesday 7th July 2010 Westminster Hall

[Albert Owen]

I agree partly with what the hon. Gentleman says. It is easy to be wise after the event. He will remember that at the time we were in the “dash for gas”, gas was relatively cheap across the whole United Kingdom and our eye was off the ball, because people were getting cheap fuel. Yes, more could and should have been done then, and it should have been done over the past 13 years. I hope that more will be done over the next few years to ensure that we alleviate fuel poverty in rural areas.

The Minister told me he was involved in the option of promoting renewable heating, which is another important way forward. Although I shall argue for the gas network to be extended throughout the United Kingdom, we need, particularly with the low-carbon economy that we are moving towards, to consider renewables. Geothermal energy is important in many areas. It would be helpful if new estates and new housing, including affordable housing, such measures installed at the construction stage.

In my constituency—I am sure that other hon. Members have experience of this—many of the problems are not just with stone houses that are a century old or more, but with estates that were built in the 1960s and ’70s, where the developers simply did not put gas mains in and did not provide for up-to-date fuel, leaving people on the periphery of the gas mains area. I am sure that at that time people would happily have paid for access to the gas mains from those properties, and it would have been a selling point for the builders, who were very short-sighted.

When I talk about areas off the grid, I am talking about not individual isolated properties but more often about small villages, towns and hamlets that are a short distance from the mains. There are issues about getting the pressure to the level needed but, again, I am sure that in the 21st century that can be done relatively simply.

[Mr Mike Weir (Angus) (SNP)]

Does the hon. Gentleman accept that there are two problems with that? First, there are many rural areas where the gas main will simply never go, because of practical difficulties. Secondly, in an era of rising gas prices and a possible shortage of gas, does he believe that gas is really the way forward for dealing with rural fuel poverty?

[Albert Owen]

I welcome that intervention, but that is not the point that I am making. I am saying that we should have renewables as well. Areas close to the gas mains should be offered a choice. I have seen the price differential between the bills of people who are off the gas mains grid and people who are on it, and it is simply wrong and unfair that some people are paying so much more.