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House of Commons

Thursday 9 July 2009

The House met at half-past Ten o’clock

Prayers

[Mr. Speaker in the Chair]

Oral Answers to Questions

Energy and Climate Change

The Secretary of State was asked—

Domestic Energy Tariffs

1. Mr. Alistair Carmichael (Orkney and Shetland) (LD): What recent discussions he has had with (a) energy companies and (b) Ofgem on the structure of domestic energy tariffs; and if he will make a statement. [285151]

The Secretary of State for Energy and Climate Change (Edward Miliband): I have frequent discussions with Ofgem and the energy companies on domestic energy tariffs. In the past nine months, and following Ofgem’s finding of unfair pricing, suppliers have removed £300 million in unfair premiums, including £96 million from those on prepayment meters. Ofgem is also changing the law to forbid future unfair discrimination against customers on the basis of where they live or how they pay.

Mr. Carmichael: I am grateful to the Secretary of State for that answer. Is he aware of the situation that faces some of my constituents? When changing from prepay meters to key meters—from card meters to key meters—they found that they had to pay the premium, which was later to be refunded by the energy company. Surely that system should not be allowed to operate.

Edward Miliband: I am grateful to the hon. Gentleman for raising that issue and I hope that the change in licence conditions that Ofgem is introducing will prevent unfair pricing practices. I should be grateful if he wrote to me, or provided me with more information, about the particular practice he was talking about, and I shall obviously draw it to Ofgem’s attention to see what can be done.

Alan Simpson (Nottingham, South) (Lab): The Secretary of State will recall that earlier in the year the Prime Minister met a group of MPs who were concerned about the complete mess the energy companies are making of social tariffs. Only 600,000 households of the 5.1 million in fuel poverty are included in the tariffs, many of which are so obscure and inaccessible that they
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are just a really bad joke. At the time, the Prime Minister said that he was in favour of a gold standard scheme that would be made mandatory for the industry as a whole. Can the Secretary of State say how close we are to having such a mandatory scheme?

Edward Miliband: My hon. Friend raises an important issue. He has a long and distinguished record of campaigning on such matters. I believe that the social tariff system needs reform. At present, the system tends to be piecemeal—who gets into it and who does not is often an arbitrary process. We shall have more to say about it in the future.

Greg Clark (Tunbridge Wells) (Con): I welcome the Secretary of State back from his paternity leave. He is looking fantastically well, considering that he is being woken every two hours of the night by bawling and screaming—but perhaps he is not returning the Prime Minister’s calls these days.

Does the Secretary of State think that the relationship between wholesale and retail gas prices is sufficiently transparent?

Edward Miliband: I think that we have brought greater transparency to it. The hon. Gentleman will know that as a result of the announcement made by the Chancellor in the Budget there is now a quarterly publication by Ofgem on the relationship between wholesale and retail prices. As always, I am open to any suggestions about how to improve the situation. I agree with the hon. Gentleman that we need proper transparency so that people can see that when wholesale prices go down, retail prices follow.

Greg Clark: I am grateful for that. Let me make a suggestion. At the moment, two Government quangos are saying contradictory things. Ofgem says that everything is under control, yet just last week Consumer Focus said that every household is paying £74 a year too much. As a suggestion, can the Secretary of State cut through the confusion and end it once and for all by a swift, forensic reference to the Competition Commission on that narrow point?

Edward Miliband: I will look at the hon. Gentleman’s proposal. Personally, I am worried about references to the Competition Commission, apart from the most extreme cases and I will tell him why: it is a lengthy process, which will not yield results on behalf of the consumer. However, I will look at the point that he raises and I undertake to discuss it with Ofgem.

Mr. Denis MacShane (Rotherham) (Lab): On unfair electricity prices, I have been on my knees to my right hon. Friend’s predecessors about industrial electricity prices. My right hon. Friend, as a south Yorkshire MP, will know of the devastation of job losses in the steel industry, caused in part by high electricity prices. Will he talk to EDF, which is a state-owned company, and if the company will not listen, will he talk to his opposite number in Paris, and ask them to agree the same tariff with Corus as exists in France or other European countries, so that greater hope can be given on the future of the steel industry in south Yorkshire?


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Edward Miliband: The difference between us and the French is that we do not direct tariffs for energy companies. We do not have that system, but I think that my right hon. Friend raises an important point. Yesterday, I met representatives of industry from the west midlands who are concerned about the position of other industrial consumers. I think that we need tough regulation in that area, which is one where Ofgem needs to act. It is something that I have discussed, and will discuss, with Ofgem.

Home Energy Efficiency

2. Paul Rowen (Rochdale) (LD): How much funding he has allocated for home energy efficiency measures in 2010-11. [285152]

The Minister of State, Department of Energy and Climate Change (Joan Ruddock): The principal schemes for delivering home energy efficiency in 2010-11 will be Warm Front, the carbon emissions reduction target, and the community energy saving programme. The budget for Warm Front in 2010-11 is £195 million. The other two schemes are funded by the energy companies, so the information for a specific year is commercially confidential. However, based on the measures that are to be delivered, we can say that estimated overall spend will be around £3.7 billion between 2008 and 2012.

Paul Rowen: I thank the Minister for that. I am sure that she is aware that there are 21/4 pensioners in fuel poverty—[Hon. Members: “21/4 million.”] Sorry; there are 21/4 million pensioners in fuel poverty, yet the pre-Budget report estimated that the increase in expenditure on the issue would deal with an extra 66,000 people only. Given that she has not told us how many people the energy companies will help, what impact will that extra expenditure have on reducing pensioner fuel poverty?

Joan Ruddock: Let me tell the hon. Gentleman that, because of our fuel poverty policies, we managed to bring 4 million people out of fuel poverty. That was a huge achievement. It is the rise in global prices that has put people, including pensioners, back into fuel poverty. However, in the winter, we raised fuel payments for pensioners to the highest level ever, and we have said that we will do that again this winter. We have ongoing programmes with the energy companies, and they are giving social assistance as well, so I suggest to him that the Government are doing a great deal to alleviate fuel poverty.

Mr. Andy Reed (Loughborough) (Lab/Co-op): While I welcome the Warm Front programme in particular, is the Minister aware that a large number of houses of a non-traditional construction will not be given a guarantee, and so cannot have the work done? It is estimated that there are 250,000 such houses across the country. Will the Minister meet me and others to discuss the problem, so that we can find some way of getting efficiency measures into non-traditional homes, and so that everybody can benefit from the work that is being done?

Joan Ruddock: I thank my hon. Friend for his question. We have, of course, had due regard to the points that he and others have made, and we are looking carefully at how to bring non-standard homes into the scheme. For
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example, for solid-wall homes, we are producing new programmes and pilots that will give us the option of using air source heat pumps. Through other programmes, such as the carbon emissions reduction target uplift, which is an obligation on energy companies, we will make it possible to do more work in homes that are not conventionally built.

Miss Julie Kirkbride (Bromsgrove) (Con): Does the Minister agree that one of the biggest and easiest hits that we can make when it comes to our climate change ambitions is tackling domestic carbon emissions? The measures taken in the home are therefore the most important. Why does she not bang heads together, get a smart metering agreement between the various companies, and implement it as soon as possible?

Joan Ruddock: I agree with the hon. Lady’s proposition. About 27 per cent. of our emissions come from the domestic sector and result from the choices that we make, so that sector is very important. We have already announced a roll-out of smart meters. It is a complex programme—it needs to reach every household in the country—so it will start next year and will take 10 years. If we can speed it up, we will. It is very important, it is the way forward, and we will do it.

Mr. David Chaytor (Bury, North) (Lab): Is not a national energy efficiency programme important not only as regards climate change, but for job creation? On the economic stimulus packages that different countries have introduced in response to the economic crisis, is it not true that the proportion of those resources that we are allocating to green jobs is far lower than in the USA, China, France, Germany and South Korea? Would not a national energy efficiency programme, clearly identified and clearly branded, be one of the most effective ways of registering our support for action against climate change, and—

Mr. Speaker: Order. May I say gently to the hon. Gentleman that I think that he has had three questions? He will, however, get one answer from the Minister.

Joan Ruddock: May I tell my hon. Friend that 21 per cent. of our targeted measures were on green jobs? We, of course, started from a much higher base than the United States; we had already put in place many measures, and were already on track to increase them. The home energy saving strategy, on which the Government recently consulted, provides for what is essentially a national energy saving programme, directed at homes and small business. That will go ahead very shortly, and I think that it will produce the kind of measures that my hon. Friend has championed in the House.

Gregory Barker (Bexhill and Battle) (Con): The hon. Member for Bury, North (Mr. Chaytor), is absolutely right. We need a national energy efficiency programme with far greater ambition than that shown in the three rather pedestrian programmes and the very vague funding that the Minister has mentioned. The fact of the matter is that, even if we include private sector funding, we spend about a third of what Germany spends on energy efficiency, and it is already far more efficient than we are. If we want a programme that is attractive and easy
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for consumers, and that will ensure the transformation in energy efficiency that the Government have failed to deliver, they will need to adopt our proposals of £6,500 for every household in the country, and a real partnership between a public—

Mr. Speaker: Order. May I say for the benefit of the Front-Bench team in the future that what we need is not a statement, but a question?

Joan Ruddock: The Government will not take any suggestions such as the hon. Member for Bexhill and Battle (Gregory Barker) has made about his programme. [Interruption.] Let me explain to him. I wrote to his colleague, the hon. Member for Tunbridge Wells (Greg Clark), to ask him to explain exactly how the Opposition’s programme was to be funded. I have had no reply to that letter. We have costed it at £200 billion. Where will the money come from? His party is dedicated to cutting the Department that sponsors such programmes. There is no way in which the programme that the hon. Member for Bexhill and Battle (Gregory Barker) mentions will be funded and we—

Mr. Speaker: Order. I think the Minister of State is being led astray by the statement. We must focus on the policy of the Government, rather than that of the Opposition.

Climate Change

3. Mr. David Drew (Stroud) (Lab/Co-op): What recent representations he has received from those living in rural areas on the effects on their living conditions of climate change; and if he will make a statement. [285153]

4. Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): What steps he is taking to inform the public of the effects on their living conditions of climate change; and if he will make a statement. [285154]

The Secretary of State for Energy and Climate Change (Edward Miliband): The recent UK climate projections spelled out the dangers of unchecked climate change: hotter, drier summers and warmer, wetter winters. As people from rural areas have made clear, this would have a particular effect on agriculture and farming. My Department, working alongside the Department for Environment, Food and Rural Affairs, is seeking to inform people of the economic, social and human consequences of this for the UK, and therefore of the need to act on climate change.

Mr. Drew: Two years ago my county was under water, which sadly is a harbinger of what climate change will probably bring. What guarantees can the Government give that we will get appropriate measures—those that we have already spoken about—and that those measures will be applied in rural areas, where we have a disproportionately high number of older people living in older property that is in desperate need of measures such as loft insulation? Can the Government reassure me about what they are willing to do?


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Edward Miliband: My hon. Friend makes an important point about rural areas. The truth is—this is why what the G8 leaders agreed yesterday is significant—that we need action throughout the world to protect people in rural areas, because we know that climate change is a global issue. Unless every country acts, we will not be able to avoid the dangerous climate change that would increase the frequency of events such as the one mentioned by my hon. Friend, which happened in my constituency, too. Again, he makes an important point about energy efficiency. One of the things that we have done in the Warm Front programme, for example, is to pilot measures for people off the gas grid, which is an issue in rural areas, to try to help them with new kinds of renewable heating. Also, the community energy saving programme that my hon. Friend the Minister of State mentioned will pilot help for some of the poorest people in rural areas.

Mrs. Humble: I very much welcome the huge investment that the Government have put into new sea defences in Blackpool and in Cleveleys, but what further action can the Government take to protect and inform people about the immediate risks of climate change and to plan for a low carbon economy that will safeguard our future?

Edward Miliband: My hon. Friend is right to say that spending on flood defences will have to increase. It already has increased to £800 million in the final year of the current spending review. That is an important investment, which will have to rise further. The best combination for us would be to adapt to the effects of climate change that are inevitable, and to strive domestically and internationally for the action needed to prevent dangerous climate change in future. That combination of measures is necessary and we must strive for it, particularly in the next six months in the run-up to Copenhagen.

Mr. David Evennett (Bexleyheath and Crayford) (Con): I noted the Secretary of State’s responses. Surely informing the public should be a top priority to get them on board. His recent pamphlet was a start. How effective does he think measures such as pamphlets are in making the public aware of the important challenges facing individuals and households, as well as industry?

Edward Miliband: The hon. Gentleman makes an important and challenging point for all of us. We are sending out copies of the leaflet on the Copenhagen manifesto, to which he refers. My assessment of the state of the debate in Britain is that it is good, because there is broad consensus politically about the need to tackle the problem and among the public about the science. However, we need to bring home the point—this relates to the point that my hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) made—that climate change will happen in the UK if we do not take action. The danger is that people think that it will happen to people somewhere else. We have to convince people that it will affect future generations in the UK significantly if we do not act.

Fuel Poverty

5. Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): What recent progress the Government have made towards their targets for the alleviation of fuel poverty. [285155]


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The Parliamentary Under-Secretary of State for Energy and Climate Change (Mr. David Kidney): We remain committed to doing all that is reasonably practicable to ensure that households do not live in fuel poverty. Between 1996 and 2005, the number of fuel-poor households in the UK fell from about 6.5 million to about 2.5 million. Rising fuel prices have reversed that trend, and that is why my right hon. Friend the Prime Minister last year announced a 20 per cent. uplift in the carbon emissions reduction target, a new community energy saving programme, higher Warm Front grants and a big increase in cold weather payments.

Danny Alexander: I am grateful to the Minister for that answer. Given that people who use heating oil and liquefied petroleum gas are more than twice as likely to be in fuel poverty than the rest of the population, will he assure me that the ongoing renewable heating incentive consultation will not propose an additional levy on heating oil and LPG? That would be paid by people who use heating oil and LPG in rural areas, and it would add to the bills of people who already pay the highest prices in the country.

Mr. Kidney: I am grateful to the hon. Gentleman for his question, but I am not prepared to give that assurance today. What I can say is that our proposals for feed-in tariffs and renewable heating incentives offer new opportunities for people to reduce their energy costs by producing more energy for themselves and, hopefully, selling back an excess afterwards. We will consult on our proposals for the renewable heating incentive, which we hope to have in place by April 2011.

Mr. Brian Jenkins (Tamworth) (Lab): Will my hon. Friend assure us all that his Department is alive to the fact that, when energy prices went up, domestic prices followed very rapidly, but when energy prices fell, domestic prices did not fall as rapidly? What is his Department doing to track those companies and ensure that they do not rip off their customers?

Mr. Kidney: I should say two things about that: first, my right hon. Friend the Secretary of State has made me responsible for consumer interests, so I personally shall take an interest in the issue; and, secondly, Ofgem has been asked to produce quarterly reports on the very point that my hon. Friend has made, so that there is both transparency and the information to hand to enable people such as me to take action if necessary.


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