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On unfair pricing, I wish that the Government would move towards legislation quickly, because the energy companies’ record is not good. Can the Secretary of State give an early indication of the nature of such legislation? Would it be UK-wide or would it cover England and Wales? Alternatively, would he take the
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option of having enabling clauses to allow other Welsh Assembly Governments to build on an already good basis? That would be of interest to Welsh consumers.

Edward Miliband: We need to examine the matter in more detail, but if we took legislative action to end unfair pricing in these areas, we would want to ensure, by talking to the Welsh Assembly Government and our counterparts in Scotland, that it was UK-wide. The situation may differ in different parts of the country, so I cannot prejudge that issue. Clearly, this is something that we would want to have across the country.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): I welcome my right hon. Friend’s statement and, indeed, the new team. When he met the energy companies last week, did he discuss phase 2 of the EU emissions trading scheme? As he knows, the energy companies will pick up a large sum, estimated by Ofgem to be £9 billion. Did he talk about how that might be used to deal with some of the problems that we have just discussed? Were the energy companies responsive to any of his suggestions?

Edward Miliband: The meeting that I had with the energy companies yesterday is becoming increasingly public. There is an awareness of the long-standing issue of the EU ETS and how the decision was made on carbon allowances, and of the EU ruling on that question. The companies would say that they are using that money for investment. It is also important that they realise that at this time, when people are under terrible financial pressure, they have a set of responsibilities to our wider society and to the people who are their customers—I certainly made that point to them.

Tony Baldry (Banbury) (Con): As someone who served on the Public Bill Committee on the Climate Change Bill, I very much welcome the Secretary of State’s statement, although one thing puzzles me. If we are to meet the emission targets, surely power stations such as Kingsnorth will require effective carbon capture from day one, rather than at some unspecified date in the future.

Edward Miliband: I have not prejudged—it would be wrong for me to do so—a decision about Kingsnorth, which, as the hon. Gentleman knows, is part of a process. I agree that carbon capture and storage is essential as a clean fuel of the future. It is the thing that makes fuels such as coal very important and part of our energy future. CCS must be central to our plans.

Anne Snelgrove (South Swindon) (Lab): I thank my right hon. Friend for listening to the arguments of the Labour Back Benchers on the Public Bill Committee who originally tabled the “remove 60 and replace with 80” amendment and making that replacement. Will he consider whether public sector buildings should be in the top quartile of energy efficiency so that we can achieve an 80 per cent. carbon emission cut by 2050?

Edward Miliband: I pay tribute to my hon. Friend’s work and that of Labour Back Benchers on pushing this issue forward. She makes an important point about public sector buildings, because we need to do a lot more in that area. The Parliamentary Secretary, Cabinet
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Office, my hon. Friend the Member for West Bromwich, East (Mr. Watson) is working on these issues, and I intend to work with him to move forward what we are doing in this area, because the public sector must show a lead.

Mr. Roger Williams (Brecon and Radnorshire) (LD): One of the first reports to land on the new Secretary of State’s desk will be on the viability and potential of the Severn barrage. A number of organisations are lining up against the barrage, including Friends of the Earth and the Royal Society for the Protection of Birds. Will he undertake to bear in mind, when considering that report, that other technologies could be equally productive in terms of energy, but much more friendly in terms of nature conservation?

Edward Miliband: Again, I hope that the hon. Gentleman will forgive me for being coy on such questions. I want to examine issues such as the Severn barrage properly, and I will certainly take account of the points that he raises.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I very much welcome the commitment to the 80 per cent. target. It is an ambitious target, as my right hon. Friend will agree, that will require co-operation from all levels of government. Will he therefore have a word with the Secretary of State for Transport to try to persuade him to support an amendment that I have tabled to the Local Transport Bill that would require all local authorities to have regard to issues of climate change when formulating their transport policies?

Edward Miliband: I will definitely do that. My new Department has a wider role across government, working with the Departments for Transport and for Communities and Local Government and others, on such issues. We will not always succeed in our aims, but I accept that we have that responsibility. My hon. Friend also raises an important point about the role of local authorities and communities in being part of the battle to tackle climate change.

Phil Wilson (Sedgefield) (Lab): I welcome the dynamic statement that my right hon. Friend has made today. As he knows, the north-east of England is well placed to lead the way in offshore wind farms. What is his Department doing to prioritise offshore wind farms and what part will they play in reaching the 80 per cent. target?

Edward Miliband: Offshore wind does play an important part in our plans. In the Energy Bill, we are introducing a so-called banding system for the renewables obligation that will reward offshore wind, taking account of its higher costs with one and a half renewable obligation certificates rather than the standard one. That will incentivise people to build offshore wind capacity. We are apparently overtaking Denmark and I am told by my officials and the British Wind Energy Association that that is a big deal. However, I am sure that there is further to go on offshore wind.

Paul Flynn (Newport, West) (Lab): May I urge my right hon. Friend to pursue his proposals on feed-in tariffs with vigour, because they will produce benefits quickly, and avoid being bewitched by the Pied Piper of nuclear power, which will not?

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Edward Miliband: I will try to avoid being bewitched. I will also try to take a balanced approach to these issues. We need a diverse energy supply that includes nuclear as well as renewable energy and microgeneration.

Kerry McCarthy (Bristol, East) (Lab): My right hon. Friend has certainly hit the ground running in his new job, but he may not yet have realised that Bristol has ambitions to be the green capital of the UK. That is illustrated by the fact that nearly 1,000 people have written to me about the 80 per cent. target. To achieve that target, we need fundamental changes in our behaviour, as individuals, as companies and in the public sector. What is he doing to encourage people to adopt more sustainable lifestyles?

Edward Miliband: I thought that my hon. Friend was going to ask what I was doing to adopt a more sustainable lifestyle. I am certainly not putting myself forward as a paragon of virtue, because that would be very dangerous. The argument on the science of climate change has been won, but the argument about how people can make a difference has not yet been won, and we have a lot more to do. We have the Act on CO2 campaign which my hon. Friend the Under-Secretary led in her time at the Department for Environment, Food and Rural Affairs and will lead in the new Department. However, more can be done in local communities to show how they can lead the way in tackling climate change.

Ms Celia Barlow (Hove) (Lab): My constituents will greatly welcome the measures announced today, especially the 80 per cent. target, which I called for in February. However, many of my constituents live in houses in multiple occupation. What can be done to assist them not only with pre-payment meters, but to achieve the target and become more green, which is what they want?

Edward Miliband: My hon. Friend raises an important point, but it is one to which I do not have an immediate answer. How do we encourage landlords, especially private sector landlords, to play a role in relation to energy efficiency? More can be done on that and it is something that I am considering.

Mr. William Cash (Stone) (Con): In relation to carbon capture and storage, will the Secretary of State consider preparing plans to reopen the mines, for the reasons given by the hon. Member for Midlothian (Mr. Hamilton)? We would have to run both policies in parallel, and the training that would need to go with them. Does he also recall the Radio 4 programme about three weeks ago in which Sir David King and Dieter Helm severely condemned the wind turbine policy, in line with the arguments that we are making in Norton-in-Hales and Maer in my constituency?

Edward Miliband: I shall endeavour to obtain a transcript of the programme, although I do not agree with those views on the evils of wind turbines. I do agree that coal can play an important role in our future. As I have said, carbon capture and storage and the new technologies are an important aspect of making clean coal part of the energy mix of the future.

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Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): May I reiterate the importance of improving the energy efficiency of the existing housing stock and remind my right hon. Friend that on top of the problems of older houses and private landlords there is also the issue of housing of non-traditional construction, much of which is in the control of local authorities, and almost all of which is lived in by people on very low incomes? Those houses cannot be easily made energy efficient, but they must not be left out.

Edward Miliband: My hon. Friend speaks with a deep knowledge of these issues and I look forward to hearing her suggestions on what we should do in that area. She clearly raises an important point.

Mr. David Anderson (Blaydon) (Lab): May I respectfully suggest to the Secretary of State that he does not take too much advice from the Conservatives who, after all, destroyed the cleanest coal technology in the world and put in place the companies who are fleecing our constituents? In discussions about clean coal technology, everyone talks about carbon capture and storage, but we should also consider the underground gasification of coal. Will he meet me and people from Newcastle university who lead the world in that?

Edward Miliband: I would be happy for our team to do that. CCS and IGCC—as I think it is called, although I shall not try to remember what that stands for. It may be intergasification combined cycle, or integrated—no, I should not have tried. In any case, all those technologies have an important role to play in the future.

Mr. Jim Devine (Livingston) (Lab): My constituents will welcome this statement and, in particular, the action that the Secretary of State is taking against energy companies. Has he considered similar action against the petrol companies? Petrol prices were $147 a barrel, and the price was rising almost every day, but it has now fallen. Apart from at Asda and Tesco, however, pump prices remain high, despite the fact that oil prices have almost halved.

Edward Miliband: The fundamental point that my hon. Friend makes is right. When prices go up and companies pass them on, the counterpart should be that when prices fall, the reduction needs to be passed on urgently and swiftly.

Mr. Deputy Speaker: I call Anne Moffat.

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Anne Moffat (East Lothian) (Lab): Oh you are a sweetheart, Mr. Deputy Speaker. I did not think that I was going to be called—

Mr. Deputy Speaker: Order. I have been called many things, but that was a first.

Anne Moffat: I just love you today, Mr. Deputy Speaker.

I congratulate the Secretary of State on his new job, but will he have the guts to tell the Scottish Executive that they cannot rule out nuclear power when it comes to security of supply?

Edward Miliband: I will not comment on how I regard you, Mr. Deputy Speaker, other than to say that I have the greatest of respect for you.

My hon. Friend is right that nuclear power must be part of our energy mix. We were right to lift the moratorium on nuclear power, and I am sorry that the Opposition took a long time to come with us on that issue. I will certainly make that point to the Scottish Executive.

Fiona Mactaggart (Slough) (Lab): Like everyone else, I welcome the statement, and I am especially looking forward to the letters that I shall write to those many constituents who have asked about a cut of 60 per cent. and feed-in tariffs. In his increasingly public meeting with the energy companies yesterday, did my right hon. Friend get a commitment from them that the very poorest people, who are on enforced pre-payment meters, will pay the lowest tariff?

Edward Miliband: It is fair to say that there is further to go with the energy companies on these issues. There are two questions, and we must be clear about them. First, the energy companies claim—currently supported by Ofgem—that the cost to the companies for people with pre-payment meters are higher than for other people. I am urgently investigating that claim. The second issue—also raised by the Ofgem report—is that even taking account of those higher costs, people on prepayment meters are paying too much. On that point, I have demanded urgent action from the companies. On the first issue, I am investigating the truth of those claims and what can be done about the issue in general.

Mr. Deputy Speaker: I thank hon. Members and the Secretary of State for making reasonable progress. I hope that I have not prejudiced the chances of hon. Members who wish to speak in the other debates.

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Topical Debate

Energy Providers

1.29 pm

The Minister of State, Department of Energy and Climate Change (Mr. Mike O'Brien): I beg to move,

My right hon. Friend the Secretary of State for Energy and Climate Change has just told the House that our new Department aims to have a climate change policy that is fair for people and an energy policy that is fair for the planet. The issue is how we balance those things, and I want to set out how we intend to do so.

I join other colleagues in paying tribute to my predecessor as energy Minister, my hon. Friend the Member for Croydon, North (Malcolm Wicks), who for three years provided leadership and a deep commitment to dealing with fuel poverty and ensuring energy security in this country. My right hon. Friend the Secretary of State and I look forward to working with him in his role as the Prime Minister’s special representative.

It is important that we reach a balanced view on climate change policy and energy policy. We must understand three key points. First, global circumstances shape our choices at home. Secondly, we must ensure that energy suppliers are encouraged to deliver affordable energy in sufficient quantity. Thirdly, we must be clear-eyed about the need for new energy generation in Britain.

On the first point, we know that the global financial situation means that we all face serious times. Now, more than ever, climate change and the green agenda will face a testing time. There will be what my predecessor called siren voices, who will say that to deal with the financial problems we need to forget about the green agenda. The statement made today by my right hon. Friend the Secretary of State had not only an important practical objective but a symbolic importance. He clearly said that the Government will not be distracted, will maintain their focus and will ensure that climate change is at the forefront of the Government’s agenda.

The Stern report made it clear that the longer we wait to deal with the problem, the greater it will be and the higher will be the price to pay for not dealing with it. It is important that we focus on the issue in the coming years. However, these are serious times for people who have to pay bills—for companies, small businesses and individuals. In the first half of this year, average UK domestic electricity prices were the fifth lowest in the EU; average gas prices were the lowest. However, during the following months, price rises for households and companies followed substantial rises in international wholesale prices for crude oil, natural gas and coal. That, of course, fed into the increasing prices of electricity and the bills that people receive.

International prices more than doubled between 2006 and early to mid-2008, principally because of rising global demand for fossil fuels, bottlenecks in freight and underinvestment in global production. Customers around the world are paying more for their energy and, even with a competitive UK supply market, our markets alone cannot entirely protect us from global pressures and competition for energy sources and resources.

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