Tom Greatrex
Main Page: Tom Greatrex (Labour (Co-op) - Rutherglen and Hamilton West)
Michael Fallon
I will certainly look at that. I understand the purpose behind the hon. Gentleman’s amendment and I share it, but I hope that he will recognise that a percentage cap might not be the best answer. There might be other opportunities to return to the issue as the Bill progresses, and I hope that he understands the risk that setting a percentage limit could encourage suppliers to use that limit as a default position.
I do not think a legislative solution is appropriate, but we are investigating with suppliers what non-legislative action can be taken to improve the situation with prepayment meters. We have also recently announced funding for the big energy saving network, which is a co-ordinated network of voluntary organisations and community groups that will develop and deliver support for vulnerable consumers.
I am grateful to the hon. Gentleman for his continued interest in getting a better deal for consumers. I hope that he has found my explanation on the amendments reassuring and will, on that basis, agree for the moment to withdraw them. I apologise to you, Mr Deputy Speaker, and to the House for taking an inordinate amount of time to respond to the amendments, but the group contains a range of amendments from a large number of hon. Members and I wanted to do justice to each one of them.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
I welcome the Minister to his first parliamentary interaction with the Bill. His predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), took the Bill through Committee and we know from our experience today that the Minister can speak—although perhaps in slightly less florid language—for at least as long as his predecessor could on such matters.
A range of issues are covered by this group of amendments, and I am conscious that many Members want to speak about their amendments. I shall do my best to be as brief as possible, but I want to mention a few points both in response to the Minister’s speech and in support of some of the amendments tabled by me and my right hon. and hon. Friends.
I welcome Government amendment 66, which will put in place a five-year review of the emissions performance standard. That is very important. I am sure that my hon. Friend the Member for Brent North (Barry Gardiner) will try to catch your eye, Mr Deputy Speaker, to speak in support of his amendment 150. I hope that the Minister will take that seriously in the context of the length of the grandfathering period—gas investors suggest that their investment is usually over 30 years rather than 45—and give it a degree of consideration.
In relation to the EPS, let me say a few words about amendment 179 on carbon capture and storage. The provisions in chapter 8 on the EPS will have a significant impact on the future development of CCS. The Opposition have consistently and clearly set out our support for developing that technology, which we believe has a vital role to play in our future energy mix alongside other low-carbon technologies. We do not need to go over the same ground again, but I probably first raised with the Minister’s predecessor but one some of the issues about the £1 billion that was supposedly available for capital funding. We know what the Cabinet Office document said was available for this comprehensive spending review period, although I am conscious that the Minister’s Department—or one of his Departments, the Department of Energy and Climate Change—seems to have secured its negotiations with the Treasury on the CSR. I wonder whether the remainder of that £1 billion is part of the savings that have been offered up.
If we do not get the technology developed for CCS, we will face a significant gap in our ability properly to deal with the peaks in our generation requirements. That is why we tabled amendment 179. As the hon. Member for Warrington South (David Mowat) perhaps suggested in his intervention about carbon capture and storage, we are conscious that there have been bumps in the road in moving that technology towards commercial development; I think it is fair to put it in those terms. We are concerned, as are a number of industry bodies, that an unintended consequence of the Bill is that it makes that technology less likely to be developed.
The Minister was right to say that the exemption was in the draft Bill, but was taken out as a result of concerns, expressed by the Select Committee on Energy and Climate Change and others, that it could be a loophole allowing unabated coal generation. The way in which the amendment is framed—it relates to a specific commissioning period—helps to address that sensibly, and to ensure that CCS is given the best chance of developing and being part of the future-generation mix, as many of us wish it to be. I therefore intend to push amendment 179 to a Division.
There are a number of amendments relating to contracts for difference. I am sure that the hon. Member for Brighton, Pavilion (Caroline Lucas) and others will seek to speak to some of them. I wanted to say a word on new schedule 1 and new clause 5, which stand in the name of the hon. Member for Cheltenham (Martin Horwood) and a number of other Members from across the House, on establishing a panel of independent experts to offer advice and guidance to the Government before they enter into a CFD. Although the Minister was not on the Committee, I am sure that he is familiar with the tenor of our debates on the subject; we tabled a number of similar amendments in Committee, and argued strongly for an independent expert panel to offer transparency, expertise and, crucially, protection for consumers. That differs from the Government’s plan to set up a non-statutory panel, and would deal with the concerns that the non-statutory proposals do not go far enough.
I am sure that the Minister will be aware that in Committee we argued that for many people this is still a controversial issue. The best way to ensure confidence in the negotiations that are under way—I think I heard the Minister refer to “when”, rather than “if”, the contract is secured; I am not sure whether that was a Freudian slip—is to ensure transparency around the process. Having that panel is a sensible way of providing scrutiny and transparency. If those Members who tabled the amendment seek to push it to a Division, they will have the support of Labour Members.
On a related issue, amendments 8 and 9, which are in my name and the name of my right hon. Friend the Member for Don Valley (Caroline Flint) and my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), push the Government to be more transparent about agreements with generators through investment contracts. It would be churlish of me not to recognise that the Government have moved on the issue since Committee, and have listened to what the Opposition said in Committee about what information could be restricted. I listened carefully to what the Minister said about the information that is not made available being described. However, I am unconvinced that that goes as far as it could or should. I take the point that it may be appropriate for certain information not to be put in the public domain, particularly when we are dealing with nuclear energy, but that should be the very limited exception, rather than the rule. That is why amendments 8 and 9 make it clear that the exception will be for “trade secrets”, rather than “confidential information”, as the Government could decide what was, or was not, confidential. That is important for transparency and confidence.
The Minister will be aware that the representative of EDF Energy who gave evidence at the start of Committee proceedings was very clear about the importance of transparency. It would be slightly odd if the Government sought to restrict that transparency. We will never have the confidence that we should have in nuclear as part of our generation mix if people are able to gainsay aspects of agreements between the Government and companies. The best way of ensuring that that does not happen is to make all the information available; people can then make their judgments. I am sure that that would not stop some Members from being against nuclear power, but it would give a number of others—and, more importantly, people more widely—confidence that nuclear should continue to be part of our generation mix.
David Mowat
I have listened carefully to what the hon. Gentleman said about the need for an expert panel, and all that that implies. Is it the position of the Opposition Front Benchers that the Government should not be able to enter into a binding contract with EDF, after negotiating with it in good faith, without that coming back to Parliament?
Tom Greatrex
I understand, from what the Minister said, and what his predecessor said in Committee, that the agreed contract will come before Parliament, and I would expect that to happen, but an expert panel that included consumer representatives could help to bring a degree of rigour and transparency that will be important in ensuring that there is confidence if—or when, to use the Minister’s term—an agreement is reached.
David Mowat
Does the hon. Gentleman envisage the Government coming to an agreement with EDF that is subject to ratification by some panel? Would he expect EDF to negotiate on that basis?
Tom Greatrex
I expect that EDF would want the Government to be sure that the agreement that they were entering into was safe and sound, and conformed to the best possible degree of scrutiny. An expert panel could bring some of that scrutiny, rigour and analysis. That is, in the end, in the interests of not just the Government and EDF or any other company, but the whole energy sector. That is an important point that we pushed in Committee and will continue to push today.
Martin Horwood
I thank the hon. Gentleman for his support for my new schedule 1. In answer to the point just made, the schedule does not provide for a veto by Parliament on the contract for difference, but it does expect the Secretary of State to lay before Parliament written reasons why he disagreed with the advice of the expert panel, in the event of such a disagreement. It therefore provides greater assurance of scrutiny and transparency.
Tom Greatrex
I am grateful for that clarification. I hope that helps to address the point that the hon. Member for Warrington South sought to make; it also underlines the importance of the measure. It is possible and probable that the Government would come to a conclusion that members of the expert panel did not share, but as long as that was explained, I would not necessarily think that it was a problem. It may well be that the expert panel would come to a conclusion that the hon. Gentleman and others disagreed with and I agreed with, or vice versa. It is important that there is a degree of transparency and rigour in the process. That is why we will support new clause 5 and new schedule 1, if the hon. Member for Cheltenham divides the House on them.
The Minister touched on the capacity market and the amendments in the name of my hon. Friend the Member for Southampton, Test (Dr Whitehead) relating to the strategic reserve. The Minister seemed to use the same defence that we heard in Committee—that introducing a power to have a strategic reserve would send confusing signals. Indeed, his predecessor said:
“The new clause would allow us to have both a strategic reserve and a capacity mechanism. That might be the worst possible option, because it would send a confused signal to investors about the Government’s intentions.”––[Official Report, Energy Public Bill Committee, 24 January 2013; c. 329.]
The Government argued in Committee that it would be wrong to give the Secretary of State the power to introduce a new system or mechanism in future, as it would cause uncertainty. That is very different from the stance taken by the Government in the amendments that we will discuss tomorrow on 2030 decarbonisation, which give the Secretary of State a power to set a target if he so chooses, so the argument does not stand up to scrutiny. There are important points relating to a strategic reserve that I am sure my hon. Friend the Member for Southampton, Test will seek to make. I do not think that having that power in the Bill will necessarily have the impact that the Minister suggests.
A number of amendments relating to biomass have been tabled. It was the Minister’s predecessor who took through Parliament the statutory instrument dealing with the renewables obligation earlier this year. He made a number of commitments in relation to biomass, as I gently remind this Minister, in case they were missed in the comprehensive handover that no doubt took place earlier this year. His predecessor undertook to seek from those using biomass to generate power details about the sourcing of the biomass, and to make that information more widely available.
Dan Byles (North Warwickshire) (Con)
The hon. Gentleman is probably aware that the Energy and Climate Change Committee recently had a one-off session on biomass. We concluded that this is almost certainly an issue that the Select Committee will revisit in more detail because, as he said, there is differing evidence that needs to be thoroughly teased out. Sadly, however, the results will come too late to inform this debate.
Tom Greatrex
I thank the hon. Gentleman for his intervention. I am pleased to hear that the Select Committee will be examining the matter further. I should have said that the Committee did the Bill a great service through its pre-legislative scrutiny. We will return to some of the issues on which he, as a member of the Committee, may have supported the conclusions but may not vote in line with them tomorrow. The Committee has done good work on the Bill overall and I am pleased to hear that it will do further work. It is important that we get greater clarity so that the debate is properly informed.
Finally, I shall touch on the clauses relating to tariffs, which have been grouped with the wider electricity market reform amendments. I need not remind the House that it was seven and a half months ago that the Prime Minister stood at the Dispatch Box and announced that the Government would force energy companies by law to put everybody on the cheapest tariff. For the avoidance of doubt, his exact words were:
“I can announce…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 Bill in its 200-odd pages contains no provision to put every customer automatically on the cheapest tariff. Indeed, what the Minister said in his remarks and what his ministerial colleague said on the radio at the weekend and in Committee was slightly different—that tariffs would be in line with customers’ preferences.
The intriguing source of Tory energy policy who has been busy entering the world of Twitter today talking about the impact of the measures in the Bill on consumer bills is using a figure which Ofgem suggested would be the case if every person were automatically put on the lowest tariff. If that means that the Minister is suggesting that that is the case, his amendments are deficient because they do not do what the Prime Minister said and what the Prime Minister and others have repeated in the Chamber 12 times since last October. I noticed that the Minister chose his words carefully and said “in line with”. If he is not doing as the Prime Minister said, I anticipate that the Prime Minister may seek to correct the record later in the week when we have the opportunity to ask him about that.
The Bill addresses some aspects of the energy market but there is a huge gap in it, as it does not deal properly with the retail market. We flagged up that gap in Committee and we have been clear and consistent in our stance. We want to see the Bill as the mechanism for ensuring that we get the right level of investment in our energy infrastructure. There are other issues that will be raised in another place, but the heart of the problem is how our energy is bought and sold. That is not addressed properly in the Bill. This sticking plaster attempt to implement what the Prime Minister said in October—he was particularly flustered that afternoon, as I remember it—is patently not achieved by the measures to which the Minister spoke today.
There are real reforms that could and should happen in relation to the retail market. At a time when the Bill seeks to change other aspects of the energy market, it seems odd that we are not dealing properly with the retail market, which would provide greater clarity and transparency going forward.
During the course of the Bill’s passage, we have not opposed for the sake of opposition. We will continue in that vein, as I am sure will others in another place. We have sought to be constructive in the amendments that we tabled to try to improve the framework offered by the Bill. There is a considerable amount of information that is not available to us to scrutinise. I heard the Minister say that information would be published at a later date in secondary legislation, but we are conducting our scrutiny in Committee and on Report without information that would have been appropriate.
The Minister’s predecessor undertook to publish some of that secondary legislation in draft, but that never quite happened. No doubt Members in another place will seek some of that information. Although the Bill sets out the framework for contracts for difference, some of the crucial detail about the operation and the capacity market is not available for us to scrutinise. To be able to make a sound evidence-based and comprehensive judgment of the content of the Bill, we need a degree of detail that is still missing.
Although I accept what the Minister said about the affirmative resolution procedure being used, he is obviously aware that without some of that information it is difficult to test some aspects of the Bill. I am sure other Members who speak in the next 53 minutes will make the same point. We are reliant on the Minister’s words. I have no doubt that he is sincere in his comments about the Bill to the House, but he is the third person to occupy his role in the past eight months, and those in the role have not always said precisely the same thing. The degree of confidence, clarity and certainty needed to transform the Government’s agenda and intentions for the Bill into reality requires a great deal more information to enable us to make that sound judgment. I hope the Minister will provide that information in another place to enable the Bill to address our shared concerns and to ensure that we get security of supply and a reduction in carbon emissions, and the most affordable way of doing those things.