Previous SectionIndexHome Page

Mr. Bernard Jenkin (North Essex) (Con): But the Government are responsible for the framework for long-term investment in the security of energy supplies in this country. Industry will be astonished to hear the Minister say that we are "awash with gas" when it faces the prospect of interruption to its gas supplies. The failure of the security of UK gas supplies reflects the failure of eight years of Labour energy policy.

We have not sought to provoke unnecessary anxiety about gas supplies, but we have been raising the issue with the Department of Trade and Industry for many years. I wrote to the Secretary of State weeks ago to ask about contingency measures, but he never replied. The right hon. Gentleman promised a debate on security of supplies, but we have not had it. Is it not astonishing that the Government have held their first meetings with industry only in the past few weeks?

Can the Minister confirm that for many industries the price of gas for delivery is five times higher than it was a mere four weeks ago? Does not that give the lie to the Prime Minister's claim that we are still paying the lowest prices in Europe? The Energy Intensive Users Group says

Will the Minister for Energy inform the Prime Minister, who did not seem to know that? Will the hon. Gentleman confirm that the emergency summit at No. 10 on 9 November concluded that there is a very high possibility that industry will have its supplies interrupted?

Now that the Minister has done all the contingency planning that he claims to have done, will he tell the House who decides which businesses are cut off and to whom is that person accountable? Is it possible that gas-fired powered stations, which affect electricity supplies, will be cut off, too? Can he assure the House that every business that might have its supplies interrupted because of gas shortages has been informed and that they will not receive a fax five minutes before the gas is shut off, as has happened before? Have businesses been informed of the criteria that will determine which ones are shut down first? How much warning will they receive?
23 Nov 2005 : Column 1517

Does not the present situation, together with the splits and disputes going on in Government, underline the chaos of the Government's energy policy?

Malcolm Wicks: The last question was the simplest and the answer to it is: no. One or two people might be trying to talk up a crisis in gas prices, but the energy companies, most of business, the DTI, National Grid and Ofgem are not part of that. The more loose and totally inaccurate talk we hear, the worse the position may become.

The companies that have chosen—they have chosen, not I—to have contracts under which they buy on the spot   market are suffering from high prices. I have acknowledged that and we are talking with the companies concerned, which include chemicals companies and some of the steel companies. However, let us look at the prices for medium-sized businesses—the hon. Gentleman might want to know the facts as opposed to the bluster. For such businesses, the latest figures available—for the summer—show that the price of gas is 17 per cent. lower than in Germany, 4 per cent. lower than in France and 4 per cent. lower than the EU median, and the price of electricity is 49 per cent. lower than in Germany, 10 per cent. lower than in France and 20 per cent. lower than the EU median. Those are the facts.

As for the hon. Gentleman's reference to a meeting at No. 10 Downing street, to suggest that my Department reacted only in mid-November is totally nonsensical. If he cares to table a written question—no, I shall write to him anyway detailing our meetings. In summer, I met representatives of the oil and gas industry operating in the North sea and the UK continental shelf to make sure that they were doing the repairs and had the spares necessary to ensure that they were in the best possible position this winter. I met the supply companies on two occasions—my officials have done so more often—to make sure that they are in the best possible position this winter. In November, the industry suggested that there were one or two other actions that we might wish to investigate, and of course we listened to their advice. However, to suggest that we are not prepared is nonsense.

Paddy Tipping (Sherwood) (Lab): Has the Minister seen reports in some newspapers suggesting that domestic customers could be cut off? Will he take the opportunity to deny such scaremongering and confirm that even in the most severe winter, gas supplies to domestic customers will continue?

Malcolm Wicks: I am very happy to do so, because while we need to reassure business that its prices are not higher than the European average—we need reassurance as opposed to panic—it is even more important that householders, including some of our eldest and best, the vulnerable and the frail, are reassured. If those people hear that there may be energy cuts from reports that, in fact, are inaccurate, scaremongering nonsense, they may fear the effects of the cold weather that we are now experiencing. The domestic customer is not threatened at all, and through home energy efficiency schemes, winter fuel payments, the targeted focus of pension credit and so on, the
23 Nov 2005 : Column 1518
Government are doing their best to make sure that elderly people are warm this winter. That is my first priority.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): The Minister said that his first priority is the elderly, so with the increased prices for energy, how many more people will suffer fuel poverty this winter compared with last winter? Will he emphasise the important lesson that we must improve energy efficiency and the housing stock so that people can keep warm in their houses and make best use of their energy?

Next Thursday, the Minister will chair the Energy Council of Europe. How does he plan to deal with what the European Commission has identified as serious malfunctions in the European energy market? While our liberalised market is connected to a malfunctioning market there are serious concerns about the way in which the latter market will impact on our market. What progress does he plan to make next Thursday in sorting out that market? He has held meetings with representatives from industry and UK continental shelf operations, but what meetings has he had with the Environment Agency to ensure that there is minimal impact on the environment and that we maximise the economic benefits this winter? Finally, while there are arguments about our relative position in Europe, the reality is that prices are going up this winter, which is a serious concern for the economy, especially for those parts that may be shut down.

Malcolm Wicks: The hon. Gentleman raised two or three serious matters. I chair the Energy Council during our presidency, and it meets next week, on 1 December. We have made it clear from the beginning of our presidency that the issue of market liberalisation in the rest of Europe was at the top of our agenda—indeed, it is the top item on the agenda next week. The Commission has published two major reports on the issue, and it has made it quite clear that there are "serious malfunctions" in the European market. We will discuss that with Ministers, and we need to take action, because we have market liberalisation in the UK, and we need it across the European Union. That is the policy, and it should quickly become practice.

On fuel poverty, I accept that prices are rising for the domestic customer. However, they are rising across the world, so we need to see the problem in a global context. Energy demand in China, for example, is increasing by 15 per cent. a year, and the hurricanes have not helped. There are therefore serious difficulties, but we must do our utmost to protect people to whom we refer as the fuel-poor. I tend to think of them as elderly and other vulnerable people who will be cold this winter. We have taken action on several fronts, as I detailed earlier, to protect that high-priority group.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): Will my hon. Friend confirm that while increased demand is forcing gas prices up, the very fact that gas prices are connected to oil prices is also forcing the price up? Will he also confirm that last winter, at peak cold periods, 48 per cent. of our electricity was generated by coal stations, which are ready and available to produce electricity in cold periods this winter?
23 Nov 2005 : Column 1519

Malcolm Wicks: It is right to be reminded that we have a mixture of energy sources in this country, including the still very significant role of coal. For that reason, when the details of the energy review are announced by the Prime Minister, possibly quite soon, it will be a review of energy as a whole, contrary to what some people are speculating, and the future of coal will be one of the focuses of that important review. I am very mindful of that point.

Next Section IndexHome Page