Oral Answers to Questions

Debate between Stephen Kerr and Claire Perry

Tuesday 19th March 2019 Commons Chamber

[Claire Perry]

We have said repeatedly that the opportunity to create a home-grown energy source that provides thousands of jobs in parts of the country that economic policies have not been able to help, with the toughest regulations for oil and gas exploration in the world, is something that we should soberly and sensibly explore. That continues to be the case.

[Stephen Kerr (Stirling) (Con)]

What progress is being made to upgrade SMETS 1 smart meters to allow them to function interoperably?

[Claire Perry]

The switchover has already started. The priority is smart meters that have gone dumb through customers switching, because we do not want there to be an impediment to switching. The commitment is unchanged: it will be rolled out completely by the end of 2020.

Domestic Gas and Electricity (Tariff Cap) Bill

Debate between Stephen Kerr and Claire Perry

Wednesday 18th July 2018 Commons Chamber

[Claire Perry]

As Members will know, the Bill has received very broad and strong cross-party support during its passage through this House. I thank all of those who have spoken, who have worked behind the scenes, who have lobbied and who have voted for a very important piece of legislation. I repeat my thanks to the hon. Member for Leeds West (Rachel Reeves), who is not in her place, for her excellent stewardship of the Business, Energy and Industrial Strategy Committee, which contains Members from all parties, and for her continued support on the Bill. The Committee did some excellent work during the Bill’s pre-legislative scrutiny.

I also extend my thanks to the hon. Member for Southampton, Test (Dr Whitehead) and the Labour Front-Bench team for their extremely constructive approach to this Bill and for helping us to develop an amendment that we will come on to debate in a moment.

First, we must consider the amendment that was made in the other place about what will be done to protect consumers when the price cap comes to an end. That is an extremely important question. As the Government have made clear, the price cap is a temporary intervention to protect consumers on standard variable and default tariffs while other reforms continue apace to bring about the conditions for effective competition in the retail market. I understand the concerns, which have been raised by Members from all parts of the House and by Members in the other place, that there is a risk that some features of the market may remain that will need to be addressed. For instance, as the energy market is reformed, it is absolutely vital that the protection of vulnerable customers in this market is kept under review, and action taken if necessary to afford those customers the protections they need.

There are also concerns about the possible return of practices such as tease and squeeze, which is essentially enticing people onto cheap fixed tariff deals only to move them on to higher tariff deals when the fixed period ends. I agree wholeheartedly that we must seek to end those practices. However, introducing a requirement such as the Lords amendment seeks to do, which essentially commits us to an indefinite price cap, is not the appropriate solution. Instead, the Government propose amendment (a) in lieu of the Lords amendment, which will ensure that Ofgem must conduct a review before the end of the price-cap period into the pricing practices of suppliers and, in particular, identify whether there are categories of customers who are currently paying, or who may in future be at risk of paying, excessive charges for standard variable and default tariffs.

In reviewing the practices of suppliers and identifying whether consumers are paying excessive charges, the regulator must consider whether there are consumers who will be excessively negatively affected when they move from fixed rates to standard variable tariffs—the tease and squeeze problem—and also whether vulnerable customers continue to require protection. If it is the regulator’s view that protections are indeed required, the amendment says that necessary steps must be taken to provide those protections, using a broad set of existing powers under the Gas Act 1986 and the Electricity Act 1989.

It is the Government’s view that amendment (a) therefore futureproofs something that we all care so strongly about in this place—the protection of consumers from excessive charges, particularly on SVT and default rate tariffs—and rightly provides in the Bill the necessary impetus and discretion to the regulator to consider the most appropriate response to those excessive tariffs under its existing powers.

[Stephen Kerr (Stirling) (Con)]

Let me speak in relation to the amendment in lieu, which says:

“customers who appear to the Authority”—

that is Ofgem—

“to be vulnerable by reason of their financial or other circumstances are in need of protection.”

How will the data be made available for anyone to be able to make that assessment, because, currently, there is a restriction in the availability of that data to pinpoint the help that is necessary?

[Claire Perry]

I pay tribute to my hon. Friend’s work as a member of the Business, Energy and Industrial Strategy Committee and his doughty championing of consumers. He will be aware that the Government have taken through another piece of legislation, which was required to ensure that the regulator can work with Government datasets in order accurately to pinpoint vulnerable customers. I am sure that the whole House will be pleased to know that if that legislation has not yet received Royal Assent, it will do imminently. I look to my officials to ensure that that is the case.

Oral Answers to Questions

Debate between Stephen Kerr and Claire Perry

Tuesday 12th June 2018 Commons Chamber

[Claire Perry]

We have maintained, and will continue to maintain, our manifesto commitment that says that no more large-scale onshore wind development is right in England. That should reassure my hon. Friend and his constituents.

[Stephen Kerr (Stirling) (Con)]

rose—

Oral Answers to Questions

Debate between Stephen Kerr and Claire Perry

Tuesday 1st May 2018 Commons Chamber

[Stephen Kerr (Stirling) (Con)]

T4. The subsidy available to energy plant for burning wood is causing distortions in demand for virgin and recycled wood, which is constricting supply and increasing input costs for businesses such as Norbord in Cowie. Will the Minister meet me and representatives of the wood panel industry to hear at first hand about the issues that they are facing and the consequences?

[Claire Perry]

My hon. Friend is right to highlight a concerning issue. My officials are meeting representatives of the wood panel industry today, but I would be delighted to follow up with a personal meeting with him and his constituents.

Dieter Helm Energy Review

Debate between Stephen Kerr and Claire Perry

Tuesday 24th April 2018 Westminster Hall

[The Minister for Energy and Clean Growth (Claire Perry)]

It is a pleasure, as always, to serve under your chairmanship, Mr McCabe.

I understand about axolotls and chrysalises, but I did not know what a hospital pass was. I assumed that it was something people put in their windscreen when at Great Western Hospital. It made me very grateful that we unveiled the statue of Millicent Fawcett today— 11 blokes and now one woman in Parliament Square. Perhaps we can have some terms everyone understands in the future.

I thank the hon. Member for Blackley and Broughton (Graham Stringer) for securing the debate. We could discuss the issues of science and climate change, but that is not why we are here. The points he made were very good ones. The challenge of how to make policy in a way that keeps the lights on and the costs down, does not burden future generations with unnecessary costs and achieves carbon emissions reduction targets, involves important questions for debate, so I am grateful.

Before I get on to some Helm comments, I will set out a couple of ground-preparation points. We are at a tipping point. When we used to talk about low carbon, it was axiomatic to think about high cost. As we heard very eloquently from my hon. Friend the Member for Wells (James Heappey), those trade-offs increasingly are going away. I accept that renewable energy without the necessary level of battery, solid state or liquid storage will not keep the lights on and give us the hot showers we want, which is why I am such a proponent of gas, particularly clean gas, in the system in future.

Tackling our climate change issue and delivering on our carbon commitments, which are world leading in their scope, does not mean that we are looking forward to a high-cost, low-economic productivity future—quite the opposite. As we have set out in the clean growth strategy and continue to debate, we are employing more than 400,000 people in the low-carbon economy, which is bigger than aerospace in the UK. That economy is growing very rapidly, creating great export opportunities, and is doing so in the knowledge that we have decarbonised more and grown our economy more than any other G7 country. That is something of which successive Governments should be very proud.

I want to reassure the hon. Member for Blackley and Broughton that when we think about technological investments in the future, we are trying to apply a triple test. First, what happens to the carbon emissions? Can we see emissions actually coming out—can we count them? Secondly, can we see a cost-effective pathway to deployment? Can we deliver technology that will reduce costs rapidly? Thirdly, does this give us a competitive advantage based on what we are doing well in the UK, which we can export? It is not just us on this low-carbon journey; the world is pivoting to a low-carbon economy. Trillions of dollars are being spent on low-energy production and transport.

The hon. Gentleman talked rightly about coal; as a founding member of the Powering Past Coal Alliance, I wish we could persuade all countries that it is the fuel of the past. Equally, it is not right for us to dictate to some of the emerging economies their energy mix. We have to encourage and support them. India has said that it wants its entire car fleet to be electric by 2030. That will have a material impact on the price of that technology around the world. All that creates a reinforcing, positive spiral. If we can demonstrate leadership in technologies and other countries do, too, the price will drop, as has been seen with solar panels. That means that more countries can adapt and we get ourselves to a better place.

The focus on low carbon is not a win-lose situation; it is a win-win situation. The emphasis on innovation cannot be made strongly enough, which is why we have committed £2.5 billion over this Parliament just for this area of low-carbon innovation, which is part of the biggest increase ever in public spending on UK science research and innovation.

We can debate strategies, and we will, but we need to focus on costs now. Reducing costs both for consumers and for businesses is the heart of what we want to do. We have seen and heard what has happened to the input cost going into the system; I accept the point about onshore wind—the hon. Member for Kilmarnock and Loudoun (Alan Brown) and I have debated that. We have a manifesto commitment that we do not believe large onshore wind is right for England, but I am aware of other parts of the country and we are working to see what we can do.

We have seen a dramatic fall in the cost of low-carbon energy. Indeed, we have just celebrated our second period of coal-free power generation—a record of 57 hours not using coal to power our electricity in the UK. There are some other more subtle points, too. Network costs, which make up a quarter of dual fuel bills, have fallen 17% since privatisation, and the pressure is downwards on those. We have seen a dramatic increase in the level of competition in the retail energy market—there are now more than 65 suppliers. Switching levels are hitting record highs.

As hon. Members will know, I will bring back to the Floor of the House the Report stage of the Domestic Gas and Electricity (Tariff Cap) Bill next week. It sounds as if we will have strong support from all Members present. We believe that we need to do more to help that market move towards a more price-competitive place, and we want that cap to be in place for this winter.

On household energy bills, it has not just been about consumers and taxpayers investing in the future of energy generation and low carbon. Much of that investment has been offset by improvements in fuel efficiency in homes, which I believe the hon. Member for North Ayrshire and Arran (Patricia Gibson) alluded to, often directly through measures such as the energy company obligation. In fact, although prices have gone up as a result of the investment in future forms of technology, the average bill in homes has dropped by £14 since 2012, because we have become much more efficient.

[Stephen Kerr]

The Minister has not mentioned smart meters in her list. When does she feel she might be in a position to tell us where we are going with the SMETS2 meters and the connection with the Data Communications Company?

[Claire Perry]

My hon. Friend has anticipated my speech; I was also going to mention the very dramatic, large roll-out of smart meters. We know we need to move to SMETS2 and make sure that that is done as seamlessly as possible for consumers who already have a SMETS1 meter—I am happy to take that offline.

Domestic Gas and Electricity (Tariff Cap) Bill (Second sitting)

Debate between Stephen Kerr and Claire Perry

Committee Debate: 2nd sitting: House of Commons
Tuesday 13th March 2018 Public Bill Committees

[Claire Perry]

I appreciate the hon. Gentleman’s support, and I am delighted that we have cross-party support. I think we are all agreed that this is a robust Bill. I thank the hon. Gentleman for sharing his tribute to the parliamentary team, who have done a good job drafting it.

[Stephen Kerr]

I would like to pick up on the comments made by the hon. Member for Kilmarnock and Loudoun about the robust performance that we saw from Ofgem this morning. Frankly, that could be, in part, because when Ofgem appeared before the Select Committee scrutinising the legislation, it was less than robust—the witness was less than robust. I think he has got the message: he cannot be neutral on this; he has to be robust. We saw that today and that gives me great confidence that we will see this Bill enacted in the way we envisage.

[Claire Perry]

I defer to my hon. Friend’s experience. He sat through this process, doing an excellent job on the Business, Energy and Industrial Strategy Committee, and has seen the evolution of this robustness.

In response to the hon. Member for Kilmarnock and Loudoun, I think the Bill is absolutely robust. We are agreed: we have a tight, well-drafted Bill that does not allow for random amendments. The challenge is that the actual job of setting the price cap has, quite rightly, been given to the independent regulator. We have to go through a process of transparency and confidence building, if you like, with participants in the market, so that the number is set at the level we want to deliver maximum benefits to consumers without the dis-benefits of driving investment out of the industry, or indeed providing a less competitive environment. That is why I have been persuaded that Ofgem gets the deadline, believes it has the right to do it, but has asked for a period in which, quite rightly, it can go through a very transparent process. The more transparency the better, because that will head off any possible legal challenge. I wish we did not have to be in the world of worrying about future legal challenges, but I think we are all convinced that we need to make the whole process as robust as possible.

In responding to the hon. Gentleman from north of the border, Kilmarnock and Loudoun, I hope I have persuaded the hon. Gentleman from a long way south of there to withdraw his amendment.

--- Later in debate ---

[Claire Perry]

Again, it was a very effective evidence session this morning. I was just going to come on to some of the other support we are looking to provide, in particular through the Energy Company Obligation, where we may be looking to help a broader group of people than is currently eligible.

I want to touch on some of the other duties that Ofgem already has in relation to protection of this customer group. The original gas and electricity Acts place a duty on Ofgem to protect the interests of existing and future customers. In carrying out this duty, Ofgem should have regard to the interests of individuals who are disabled or chronically sick, individuals of pensionable age, individuals with low income and individuals residing in rural areas. So I would argue that Ofgem already has these duties in place as part of its conditions. Indeed, the Bill, in which we make it explicit that we need Ofgem to consider all customers and all competition in setting the cap, makes the amendment surplus to requirements.

[Stephen Kerr]

I just have a brief question. I know the Minister has acknowledged the Select Committee’s work on pre-legislative scrutiny. One of the recommendations in its report was about amending the Digital Economy Act 2017 to allow data to be shared with energy companies. That is a huge impediment right now to getting help to the most vulnerable—particularly those who are on SVTs.

[Claire Perry]

Yes. Again, I want to thank my hon. Friend and the Select Committee for bringing forward a series of recommendations, which we have accepted. He refers to a statutory instrument that is being started in the Cabinet Office, which I am assured will receive assent—or whatever the right word is—during the passage of this Bill, subject, of course, to cross-party support. That opens up the opportunity for much better data sharing to support vulnerable and disabled consumers.

It is extremely important that we continue to look at this group. We heard today that some of those we might consider most vulnerable are also the most assiduous switchers, because they simply do not have a penny to spare. I guess the issue I have, which is why we are here, is that we do not want people to have to invest the time in shopping around to feel that they are always getting the best deal.

Households that are receiving the warm home discount, in addition to qualifying for the safeguarding tariff, get £140 a year. Of course, we protect our pensioners, with up to £300 a year for winter fuel payments. Sadly, the cold weather payment was also triggered in the last couple of weeks, and that was another £25 during the cold snap. There is also the priority services register, which is a free service provided by suppliers for people of pensionable age who are disabled or chronically sick, have a long-term medical condition or are in a vulnerable situation. Those people go to the front of the queue should an emergency—a supply interruption—interrupt their heating or cooking facilities.

Finally, I want to mention the ECO consultation, which we will bring forward shortly. It is my intention, as far as possible, to pivot the whole of ECO to focussing on the challenge of fuel poverty and trying to make sure that those in the greatest poverty receive the greatest benefit, but also to use the programme to support more innovation and more targeting. I live in an off-grid area, and I am fed up of getting ECO leaflets through my door. It does not feel like the best targeted scheme to me, and I would like it to be targeted at those who are perhaps time-poor and need the help the most.

Oral Answers to Questions

Debate between Stephen Kerr and Claire Perry

Wednesday 24th January 2018 Commons Chamber

[Claire Perry]

As I was pleased to set out in the clean growth strategy, we will make almost £560 million available up to 2025 to support all forms of renewable energy. As we have now set out, we will enable offshore wind projects, which are so vital to the remote islands, to bid in that next auction. We want to keep it going; Scotland is doing incredibly well. Last year, renewable energy right across the UK contributed a third of our electricity generation. We are on a renewables road.

[Stephen Kerr (Stirling) (Con)]

7. What recent discussions the Government have had with the Scottish Government on the implementation of city region deals in Scotland.

Oral Answers to Questions

Debate between Stephen Kerr and Claire Perry

Tuesday 7th November 2017 Commons Chamber

[Claire Perry]

The hon. Lady is a great advocate for this and we discussed this matter during the recent urgent question. We want to do all we can to support the manufacturing future of that entire company, which is why we are focusing so much on trying to help it to get the overseas orders it needs.

[Stephen Kerr (Stirling) (Con)]

When does the Minister plan to respond to the Matthew Taylor review of employment practices in the modern economy?

Clean Growth Strategy

Debate between Stephen Kerr and Claire Perry

Thursday 12th October 2017 Commons Chamber

[Claire Perry]

I commend the hon. Gentleman for the efforts of his constituents and local businesses, and answer him by saying yes, absolutely; we are looking at the pathway on costing. I would be happy to have a further meeting with him to understand how this is done, because the problems that his constituents have solved are stopping many other communities taking these important steps. Perhaps we could set up a meeting.

[Stephen Kerr (Stirling) (Con)]

I welcome this important statement. May I applaud the Minister’s enthusiasm in presenting the strategy? I welcome the affirmation that action on climate and economic growth can go hand in hand, and that it is our plan to make the UK the world leader in creating clean technology jobs and businesses. Will she say whether the Treasury are considering changes to stamp duty to help energy-efficiency improvements?

[Claire Perry]

It is not energy but caffeine that is doing this. My hon. Friend asks an important question, and I welcome the opportunity to clear this up. We see many suggestions and all sorts of ideas about how we meet our carbon budgets, but tax matters such as stamp duty are ones for our excellent Chancellor and his Budgets. It would be a brave Minister who tried to make those points at the Dispatch Box.