Tom Blenkinsop
Main Page: Tom Blenkinsop (Labour - Middlesbrough South and East Cleveland)(10 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text
David T. C. Davies
Maybe it is and maybe it is not. Maybe, as the Prime Minister has suggested, we should be looking at dealing with antibiotics and the rise in diseases that are resistant to them. Maybe we should be doing something about a comet strike, which may or may not happen. Maybe we should be worried about a complete economic collapse—which, incidentally, is made far more likely by the policies of spending money that we do not have that are propagated by Labour Members. That is far more likely to keep me awake at night. Of course, we should also be very concerned about terrorism.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
On the first point, I remind the hon. Gentleman that this Government have doubled the national debt. On the second point, in relation to industry, although the level of energy prices is a major issue, it is actually Government policy that has put energy-intensive industries in a bit of hole. The carbon floor pricing scheme that this Government unilaterally introduced has a compensation programme that does not come in until 2016. An even bigger issue is the explosion in non-EU imports into the UK market in the past year.
David T. C. Davies
The hon. Gentleman is certainly right about the strike price, but may I remind him that his party has supported all sorts of environmental measures? It is no good attacking me for something that I do not actually agree with. I am quite up-front about this. I think that most of us have made a big mistake in bringing in taxes that have affected home owners and businesses, particularly large-scale manufacturing companies—cement manufacturers, steel manufacturers, and others.
David T. C. Davies
Broadly speaking, I am agreeing with the hon. Gentleman, so I do not know why he is trying to pick a fight with me over this. The point is that we should not be doing these things because we do not have a problem. There has been no increase in temperatures since 1997, so our whole discussion is based on a false premise.
Tom Blenkinsop
The point of having a carbon price across the EU market is to ensure that countries do not isolate themselves or make themselves less competitive in the EU. We had the EU emissions trading scheme and then added our own tax, which other EU nations did not do. That happened under this Government and was one of the first measures that the Chancellor set out.
David T. C. Davies
I am not going to defend that. I think there is—shall we say?—a change in mindset going on at the moment. It is obviously happening in the hon. Gentleman’s party as well, and that is why we are having this debate. Front Benchers on both sides of the House seem to agree that we should be making energy as cheap as possible. Everyone is absolutely right about that. However, we are not going to do that by attacking the big six energy companies. The only way we will be able to bring about a sustained decrease in energy prices is by reducing the taxes and other regulations that the hon. Gentleman mentioned.
David Mowat
I am sympathetic to that view. Countries are acting increasingly unilaterally in the area of climate policy. The fact that the Germans, the Dutch and other countries are building unabated coal power stations at scale raises that question. My honest answer is that we should look at how things develop. Later, I will discuss a vote that took place on 4 December, in which the Opposition went through the Lobby—I do not know whether the hon. Gentleman did—in support of a Lords amendment that would have accelerated the closure of our power stations by bringing in the emissions performance standard for existing stations, rather than just for old stations. That was an extraordinary thing to have happened. The Opposition’s position on coal has, in many respects, been extraordinary.
I want to respond to the remarks of the hon. Member for Llanelli (Nia Griffith) on energy costs. There is a difference between gas and electricity prices. This morning, table 10.2.1 on the website of the Department of Energy and Climate Change, showed that our gas prices for 2013 were lower than median prices in the EU. That is not the case for electricity, and I am pleased that the Secretary of State has asked the Competition Commission about that. However, if we are to debate these matters incessantly on Wednesday afternoons, I think it is worth having a debate based on the facts. I will say this again—hon. Members can intervene on me if they believe it not to be the case—this country has among the lowest gas prices in the EU. If that is the case and if a cartel is in operation, as I have said before, it implies that it is a pretty bad cartel. Nevertheless, let us investigate the industry and have a look.
As I have said about my constituents in Warrington South, what matters are lower prices. The Government have addressed that, just as the Opposition have made suggestions. We want to simplify tariffs and encourage new entrants. We have acted on green levies, and I think the point made earlier about it all being switched to general taxation was wrong. We want better and faster switching.
It is true that the market has been sticky—I am not defending that and it needs to work better. We must make it easier to switch, and some of the things introduced in the Energy Act 2013 regarding compensation to consumers are to be welcomed. In my view, the Opposition policy has three prongs. One is the price freeze, which has been mentioned. The second is what I would generally describe as name calling—describing energy companies as cartels and referring to price fixing and secret deals. All those things are illegal, and if evidence for them exists, it should be brought before the courts. These are public companies, and directors should go to prison if such things are happening. I repeat that if they are happening in the gas market, it is a pretty ineffective cartel, but let us have a look.
The third strand of the Opposition’s policy is that they vote for higher prices whenever there is a vote in this place on how we can influence energy prices. Let me give some examples of that. In 2011, the then Minister was trying to reduce the subsidy for solar panels—solar PV tariffs—from six times grid parity to something like three or four times grid parity. Solar electricity would no longer be six times as expensive as everything else, but four times as expensive. We had a vitriolic response from the Opposition who said that that would see the end of the solar industry and that such subsidies were absolutely necessary. Labour Members trooped through the Lobby to vote against that policy, which was an attempt to minimise the amount of subsidy being given and to reduce energy prices. Well, so be it. That is what happened.
Similarly, we had a debate on the 2030 carbon target. Earlier, the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) intervened on the carbon price floor. I will not defend that; my view is that it is wrong, but it is also wrong for us to impose unilateral carbon targets. These are not EU laws; the EU is not doing this. Again, however, when the issue was debated on the Floor of the House, Labour Members trooped through the Lobby to oppose it. I can only imagine that there are two Labour parties, and I really believe this to be the case. There is the Labour party up in Hampstead—let us call it the north London set of the Labour party—which thinks all this stuff is great, and the other part of the Labour party that represents constituencies where there is energy-intensive industry, and where 700,000 people have jobs that depend on energy prices. If I were one of those people in the Labour party, I would be a little more sanguine.
Tom Blenkinsop
Let us return to the hon. Gentleman’s point on solar panels. By removing the subsidies from solar panels, the Government decimated the solar panel construction industry that supplied panels to UK homes. We now have massive imports of Chinese products, which mirrors what is happening in the rebar steel industry where there has been an explosion of more than 20% in the number of steel products coming from China. That did not exist two years ago.
David Mowat
That is not the intervention I had expected or hoped for. The hon. Gentleman mentioned solar PV, but that policy is not directed at Chinese manufacturing, or anybody else. We do not subsidise British versus Chinese manufacturing, or whatever.
Tom Blenkinsop
I am chair of the all-party group for the steel and metal related industry, which met yesterday. We met an industry leader who works at Celsa Steel in south Wales. He commented that what the industry wants is consistency in prices that is long-term and set out, irrespective of whether prices are lower or higher. What we have are fluctuations and the market lacks confidence because it does not know what Government policy is.
David Mowat
I thank the hon. Gentleman for that intervention, and ask him to reflect on the fact that I am also chair of an all-party group—the all-party group for the UK aluminium industry. Industry wants lower prices and not higher prices regardless of whether those prices are static or not. Perhaps if he were to reflect on that, he would see that I am right.
The third instance of Labour Members voting, whenever they get the chance, for higher energy prices occurred on 4 December 2013, and this is perhaps the most interesting example. We heard earlier about the closure of coal stations in this country because of the large combustion plant directive. On that day Labour Members went through the Lobbies to support a Lords amendment on the emissions performance standard that would have required all existing stations to stop burning coal within a short period. That would have accelerated the rapid closure of our coal stations, and apparently for green reasons. That was an extraordinary thing to do, and the cost to generation would have been extremely high. As I said, I do not know which part of the Labour party did that, but it is an odd thing to have done.
Before I conclude, I ask Opposition Members to reflect on the three policies they are suggesting: the price freeze, the name calling about persistent cartels, and the fixing of prices and all that goes with that. More importantly, whenever we get a vote in this place, they should think about the impact of that vote on their constituents, and stop supporting unilateral action. I do not agree with my hon. Friend the Member for Monmouth (David T. C. Davies) because we need to take our climate change obligations seriously and follow the EU on that. However, we do not need to continue acting unilaterally in the way that we are doing.
Tom Blenkinsop
That is one point on which I agree with the hon. Gentleman. The carbon price floor scheme was unilaterally introduced and no conversation was held with industry. That was introduced by this Government. Labour policy, along with our EU colleagues and within a market, was to maintain a framework whereby we would not make ourselves less competitive than our closest EU competitors.
David Mowat
If you will indulge me, Madam Deputy Speaker, I will answer the hon. Gentleman’s point. I have a lot of sympathy with that, but all I would say about that policy, which has now been capped, is that at least it resulted in revenue for the Treasury, which I know is generally regarded as a bad thing by Opposition Members. That is part of what we had to do to pay off the debts we inherited. The other green levies that were voted for and that I mentioned are straight subsidies and they do not result in that and are unnecessary in terms of our carbon commitments. Finally, our carbon per capita and carbon per unit of GDP is lower than the EU average, and a third lower than that of Germany.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Following the excellent speech by our shadow Secretary of State, this debate wandered into the metaphysical question of whether a power of revocation exists or not, and, if it does exist, in what way it is demonstrated. The point that those of us on the Labour Benches have made very clearly—and which will resonate outside this place—is that such a power needs to exist and that a system of escalation needs to be put in place so that certain companies, whether in the energy industry or any other sector of the economy, can be held to account for their actions and behave within the regulations. It is the old philosophical debate between those of us on the Labour Benches and those on the other side of the House. We want regulation; they consistently argue against it—in particular, prior to the 2007-08 financial crash, when they were asking for less regulation in financial services. [Interruption.] I thought I would just throw that one in to provoke debate.
If we are talking about vacuous or tokenistic politics, as the hon. Member for South Derbyshire (Heather Wheeler) was, I would like to read out a few things that the Prime Minister has recently said on this question. For example, at Prime Minister’s questions in October 2012, he announced that he would be legislating to require energy companies to put all their customers on the lowest tariff, saying:
“We have encouraged people to switch, which is one of the best ways to get energy bills down. I can announce, which I am sure the hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers”.—[Official Report, 17 October 2012; Vol. 551, c. 316.]
The Prime Minister has since repeated that promise 12 times. However, the Government’s own Energy Act 2013 gives the Secretary of State the power to require a supplier to change a customer’s tariff only when a customer is on a closed tariff. As a result, only people who are on dead tariffs—which are the most expensive and more expensive than the standard evergreen tariffs—will be moved to a cheaper tariff. Based on figures provided by the big energy companies, that is estimated to affect less than 10% of people. If we are talking about meaningless gestures or tokenism, I would highlight that as a prime example, but there is more.
Julie Hilling
Before my hon. Friend moves on, will he acknowledge that if everybody had to be on the lowest tariff, there would only ever be one tariff, which would always be the lowest, even though it could be much higher than the current low tariffs?
Tom Blenkinsop
Yes. I totally agree with my hon. Friend.
In December 2013, the Government announced changes to green levies on energy bills. The Prime Minister repeatedly claimed that that would save all consumers £50 on their energy bills. He told the House:
“It is on this side of the House that we have delivered the £50 off bills by rolling back the cost of the green levies.”—[Official Report, 12 February 2014; Vol. 575, c. 846.]
On another occasion he said:
“we have also cut energy bills by £50 by rolling back the cost of some of the green measures”.—[Official Report, 22 January 2014; Vol. 574, c. 300.]
However, much to the Prime Minister’s consternation, four of the big six energy companies—npower, Scottish Power, E.ON and EDF—refused to pass on the full £50 reduction to customers on fixed-price deals. In January 2014, the Government said that if the energy companies failed to pass on the savings of the changes to the green levies, that would not be acceptable. Indeed, the right hon. Member for Bexhill and Battle (Gregory Barker) told the BBC’s “You and Yours” programme that he was unaware that some suppliers were not passing on the reduction and that this “would not be acceptable”.
Despite that, the Government have taken no action to force energy companies to pass on those savings to customers on fixed-price deals, with an estimated 3.8 million households missing out on the Prime Minister’s promised £50 saving as a result. Furthermore, the Government’s own figures show that the energy companies should be cutting their prices even further, after the big six saved more money than first thought from the reductions in green levies. In their response to the consultation on the future of the energy company obligation, the Government admitted that the changes to the scheme were likely to mean that the energy companies would make more money. In fact, their document, “The Future of the Energy Company Obligation: Government response to the 5 March 2014 consultation”, says:
“ECO companies are likely now to be in a position to make greater savings than they had originally projected in December.”
However, rather than setting out concrete plans for how they would recoup those savings, the Government merely invited the energy companies to let them know.
Let us look at another area. Under this Government, fuel poverty is most definitely getting worse. The latest annual poverty statistics report shows that the number of households in fuel poverty is projected to increase to 2.33 million in 2014, while the average fuel poverty gap—the difference between people’s bills and what they can afford—has grown to £480 in 2014.
There are a number of areas, which I have highlighted, that show where the Government could now be taking action far more stridently. The argument being made by Labour Members is about having a power of revocation as a final threat or market check. As I have always said—and as I am sure many of my Labour colleagues believe too—the market makes a fantastic servant, but a terrible master. At the moment, the market, in whatever dimension and by whatever name—I would probably hazard the description “oligopolistic”, rather than “free market”—is behaving in an oligopolistic manner and needs to be held to account far more appropriately.
I remind hon. Members that Labour is making that argument, while those on the Government Benches are arguing for the status quo. Indeed, I would be interested to know whether any Government Members would be prepared to engage in a similar debate—not just in this House, but on the doorsteps in their constituencies—because I imagine that if their average constituent was told about the content of the argument they have been making, they would look at them far more sceptically at the next general election.