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Development Prospects (Warrington)

3. Helen Jones (Warrington, North): What estimate she has made of economic development prospects in Warrington; and if she will make a statement. [83604]

The Minister for Employment Relations, Industry and the Regions (Alan Johnson) : Warrington continues to benefit from the conditions of economic stability, high employment, low inflation and low interest rates, which are the hallmark of the Government's economic policy. The regional economic strategy illustrates the way forward for the whole region to achieve a sustainable and competitive economy.

Helen Jones: As my hon. Friend knows, Warrington needs to create more highly skilled and highly paid jobs. Will he take a personal interest in the Omega site, which is the largest industrial development site in the north-west? Will he also liaise with the Deputy Prime Minister to ensure that the regional planning guidance, which in its draft form would hinder development of the site, will in its final form ensure that we can develop it to create jobs not just for Warrington but for the entire sub-region?

Alan Johnson: I know how important the site is, and I know of the problems that were raised during public consultation on the draft regional planning guidance. I will stay in touch with my right hon. Friend the

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Deputy Prime Minister, who I am sure will take those representations into account before formulating the final version early next year.

Energy Prices

4. Mr. Bill O'Brien (Normanton): What action she is taking with regard to energy prices for private households; and if she will make a statement. [83605]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Average domestic gas prices have fallen by 10 per cent. in real terms since 1997, and electricity prices by 19 per cent. Customers who switch supplier can, on average, save about £23 on their annual electricity bill and about £55 on their annual gas bill.

Mr. O'Brien : Does my right hon. Friend share my concern for families on low incomes who face a cold Christmas? The £200 winter fuel allowance for pensioners is appreciated by many elderly people, but my concern relates to the future cost and supply of energy. We are warned that gas prices will rise, that nuclear prices will rise and that supply will diminish. The only stable fuel for energy supply is coal. Will my right hon. Friend assure us that the coal industry will be maintained, and that future energy supply will be guaranteed?

Ms Hewitt: I share my hon. Friend's concern about the plight of elderly people, in particular, who face the prospect of a cold winter. The £200 winter fuel bonus that he mentioned amounts to over a third of the annual average fuel bill. We all know from our constituencies how welcome it has been.We will shortly publish the first of the Government's annual reports on the progress of our fuel poverty strategy, but we already know that some 2 million households have been taken out of fuel poverty.

My hon. Friend raised extremely important points about security of supply, to which we will return in the energy White Paper.

Dr. Vincent Cable (Twickenham): I believe that wholesale prices have fallen by 40 per cent. over four years and retail prices by less than 13 per cent. Does that not imply that very large windfall profits are now being earned by the electricity distributors? Whom does the right hon. Lady hold responsible? Has the regulator perhaps been rather naive in lifting price-capping while competition is not fully effective? Or is the problem that the Government have given insufficient guidance to the regulator to attach priority to the protection of consumers, especially poor consumers?

Ms Hewitt: As I have said, retail prices for electricity as well as for gas have indeed been falling. Industrial electricity prices have fallen by between 20 and 25 per cent. in real terms since the beginning of the reform of the electricity market in 1998. As the hon. Gentleman will know, the actual cost of domestic electricity is a much smaller proportion of the total bill than is the case with industrial suppliers, but we have asked Ofgem to keep a close eye on the operation of the market, and we

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are already making amendments to the new electricity trading arrangements to ensure that they work more effectively in future.

Mr. Kevin Hughes (Doncaster, North): If we continue to worship the guru who says that cheap is always best, how long will it be before most of our electricity is generated from imported sources? Will that not leave us vulnerable?

Ms Hewitt: That is an important point. As both my hon. Friend the Energy Minister and I have said many times recently, in the White Paper we will look for the best way of ensuring in the medium and long term that we have the diversity of supply in our electricity market on which security of supply for all our domestic as well as our industrial customers depends.

Mr. Tim Yeo (South Suffolk): I congratulate the Secretary of State on having recently exceeded the average length of tenure achieved by previous occupants of her post over the past 20 years.

Does the right hon. Lady agree that energy prices would reflect the environmental costs of energy production more accurately if the arbitrary and burdensome climate change levy was replaced by an emissions trading system, and that such a system would allow both nuclear power and renewables to compete with fossil fuels on fairer terms?

Ms Hewitt: The climate change levy has a very specific function, which we set out clearly when we introduced it, and that is to improve the incentives for investment in new, high-quality renewables. The climate change levy, coupled with the renewables obligation, is indeed strengthening investment in renewables, while at the same time the climate change levy provides an effective and powerful incentive to industrial consumers to improve energy efficiency. I would remind the hon. Gentleman that the climate change levy was introduced following a report by Lord Marshall, the former president of the Confederation of British Industry. We are working with our European partners on the introduction of a European emissions trading system and we shall have more to say on that subject in the energy White Paper.

Industrial Policy

5. Dr. Phyllis Starkey (Milton Keynes, South-West): If she will make a statement on the place of science and innovation in the Government's industrial policy. [83606]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Science and innovation are at the heart of the Government's industrial policy.

Dr. Starkey : Part of the justification for the very large sums of money that the Government have put into scientific research is that scientific research can be exploited for job and wealth creation, but small businesses are notoriously poor at picking up those results and turning them into extra jobs. What is the

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Department doing to try to encourage co-operation between small and medium-sized enterprises and university science and technology departments?

Ms Hewitt: My hon. Friend raises an extremely important point because, despite the outstanding record of some smaller firms, the average performance in introducing a new product on which competitiveness depends is really quite inadequate. Last week, I announced a wide-ranging review of the UK's innovation performance and the results of that review will help us further to strengthen performance. What we are already doing through the LINK programme and through investment in the science base and, for instance, the centres of manufacturing excellence, is to make it much easier for small firms in particular to work far more closely with the science and technology base, and thus to introduce the new products and processes on which their future success will depend.

Mr. Derek Foster (Bishop Auckland): Does my right hon. Friend agree that the commercialisation of science and technology and innovation is crucial to areas such as my constituency in the north-east? Will she therefore congratulate the north-east centre for scientific enterprise, which is based at Durham university, on its success and perhaps even beef up the amount of Government money that it can obtain?

Ms Hewitt: I am delighted to have this opportunity to congratulate that centre on the investment it is making and on its success. I am very pleased to say that my hon. Friend the Minister with responsibility for small business will be visiting it in a fortnight. We have already in the past few years more than doubled the rate of spin-off companies coming out of the university science base, and I am sure that the centre in my hon. Friend's constituency will be just as successful in future.

Mr. John Bercow (Buckingham): In seeking to foster a climate for the growth of science and innovation and in recognising that regulation can be onerous and debilitating on the one hand, or enabling and protective on the other, can the right hon. Lady tell me and the House what assessment she has made of the benefits of the Regulatory Flexibility Act 1980 and the Small Business Regulatory Enforcement Fairness Act 1996 in the United States?

Ms Hewitt: That was a long way of getting to an interesting point about regulation. I take some comfort, though not too much, from the recent report of the Organisation for Economic Co-operation and Development, which investigated the climate for regulatory reform across all industrialised countries. It found that the UK has a much better set of policy levers for bearing down on unnecessary and over-complicated regulation than almost any other country in the world. We have in particular looked at the example of the United States and drawn on the lessons from that and from other countries, including the Netherlands, to ensure that we remain at the forefront of good regulation, because we are determined to sustain the position that the The

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Economist intelligence unit recently identified of having one of the best regulatory and entrepreneurial environments for business in the world.

Mr. Gareth Thomas (Harrow, West): Given that one aspect of science and innovation for which there is huge potential in Britain is the sustainable energy industry, does my right hon. Friend accept that a bolder and more ambitious target—such as 25 per cent.—is appropriate beyond 2010 for renewable technologies?

Ms Hewitt: I am happy to agree with my hon. Friend, in general terms, about the importance of setting ambitious targets for sustainable energy. We shall of course be setting those targets in the energy White Paper, to which I know he is looking forward with great interest.


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