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Our framework is important not just because of the objective that carbon capture and storage should be ready for commercial deployment in 2020, but because of the demand. As my hon. Friend the Minister pointed out, no other country has produced the formulation that a substantial proportion of any new coal-fired power station must involve carbon capture and storage. We will not allow building of unabated coal-fired stations. I thank all Members, and indeed members of the wider community who take an interest in these important matters, for their campaigns.
The Bill represents a milestone in that regard, and it also represents a milestone because of the consumer levy. It will add 2 to 3 per cent. to bills in 2020-we should be up front about that-but it is the right thing to do if we are make the environmental progress needed in the power sector, and also to guarantee our energy security. We know that in today's world, the best form of energy security is low-carbon energy security, and we know that carbon capture and storage represents the only way we can achieve that in relation to coal.
The first and most important part of the Bill from Labour's point of view relates to the CCS incentive. However, we are aware that the low-carbon transition involves costs, and it is important for us to take all the action we can to protect consumers from those costs. There have been significant advances recently, such as those for people on prepayment meters; a number of Members have raised that matter in the House. A year ago, people on prepayment meters paid £41 more for their energy than standard credit customers; today that differential has, effectively, been eliminated.
There is much more to do, however, so the Bill makes a series of changes in a number of areas, including reform of the regulator's powers, sending a message to the regulator about the role of competition, but also including proactive work by the regulator. There is also the market power licence condition, to try to ensure greater fairness for consumers. Another of the changes-that to do with the information that must be given to customers-was debated on Report. That, too, has been a campaigning issue for Members. It is right that proper information should be provided to consumers. As has been said, either that will be done by Ofgem or it will have to be done by Government. We are sending out a clear message. This suite of new powers is very important. It significantly strengthens the ability of the regulator to ensure that the costs of energy are fair to all consumers.
Another aspect of the Bill that should be highlighted is the action on fuel poverty. A lot has been done on that, but at a time of higher energy prices, there are much greater upward pressures in respect of fuel poverty. We have taken action on incomes, prices and energy efficiency, but again, there is more to do. I should mention one important change. We have turned a voluntary commitment by the energy companies-negotiated by my predecessor in this policy area-to provide help for vulnerable consumers, into a compulsory or mandatory commitment. I suspect this power to provide a mandatory commitment to ensure fairness for the most vulnerable consumers will become more important as the years go by. We have set out a trajectory for the amount of money that will be spent under this power: in 2013-14 the total will be £300 million.
If I may hazard a prediction, I think that future Governments will find that this power becomes more important. It constitutes a redistribution to the poorest consumers, and it sits alongside other measures that we take to protect vulnerable consumers, such as the winter fuel payment. It is an important recognition that, at a time when the transition to low carbon imposes costs on consumers, we must do all we can to protect the vulnerable. It is a very important change, which will stand the test of time, and I hope it will be welcomed by all Members. There have also been amendments to the Bill clarifying that mandatory price support could provide help other than direct financial benefits.
It is a short Bill, but it puts in place important measures in respect of the transition to low carbon. The CCS levy delivers an unprecedented amount of investment, not just in Britain but around the world, into CCS, which is a crucial technology for the future. The strengthening of the powers of the regulator is essential moving forward, as we face upward pressures on prices. There is also specific support for the most vulnerable.
I have no doubt that in the remainder of the debate Members will say that lots of other measures should have been included in the Bill. That is, at least, what the Opposition said on Second Reading, but we can never tell whether there will be consistency. What is clear, however, is that this Bill takes important steps forward. The task now is to send the Bill to the other place and to get the legislation on to the statute book, because the task is urgent and we all must ensure that we make speedy progress.
I hope all Members will support the Bill. I think it makes important progress. We always welcome consensus on these issues, and I commend the Bill to the House.
6.39 pm
Greg Clark: I would love to say what I think should be in this Bill, but I think that you would prevent me from doing so, Madam Deputy Speaker, so I shall have to contain myself. We can at least agree, in the spirit of consensus, that the great advantage of a Bill that does not contain much is that it provides little with which to disagree-and that is the position this evening. As the Secretary of State says, on energy-related issues more than most there is an imperative for the Government and the Opposition parties to maximise the scope for long-term agreement.
I am glad to say that the Bill has occasioned some agreement across party lines, although that has not always necessarily involved the Front-Bench teams. Our most recent discussions have shown that the argument was won by my Conservative colleagues, and by the hon. Members for North Southwark and Bermondsey (Simon Hughes) and for Angus (Mr. Weir), even if the majority that the Government enjoy allowed them to push their proposal through. I hope that Ministers will reflect on that expression, which clearly portrayed the feeling of the House in that very good debate.
May I wholeheartedly join the Secretary of State in thanking all those who have worked on the Bill during its passage? I wish to express my particular thanks to my hon. Friend the Member for Wealden (Charles Hendry). As shadow Energy Minister he has outlasted several of his opposite numbers, and his knowledge and experience have clearly shone through, both today and
in his work on the Public Bill Committee. I pay tribute to all members of the Committee, in particular my hon. Friends the Members for Northampton, South (Mr. Binley), for Bournemouth, East (Mr. Ellwood) and for St. Albans (Anne Main), who took the often technical subject matter to heart and gave their all.
I am sure that we can look forward to the contributions of my hon. Friend the Member for Wealden for many Parliaments to come, but I am conscious also of the contribution made to the passage of this Bill by Members of the House who are stepping down at the forthcoming general election. The issues at stake in this Bill are of long-term importance and I wish to pay tribute to those retiring Members who served with distinction during the passage of the Bill. When future generations look back on this era and ask what our generation did about the energy and climate change crises of the 21st century, they will judge the record not only of Governments but of Parliaments. The judgment of history on us all will be the kinder for the contribution made by outstanding parliamentarians such as my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) and my hon. Friend the Member for East Surrey (Mr. Ainsworth).
I also recognise the consistent dedication of Members from all parties, in particular the hon. Member for Nottingham, South (Alan Simpson), whose contribution today showed that he is the most vertebrate-I use his description-of Members of this House, the hon. Member for Morley and Rothwell (Colin Challen), who is also stepping down and who has made a contribution to these debates, and the hon. Member for Sherwood (Paddy Tipping), who is also retiring as Chair of a Select Committee. Their presence will be much missed in the House, but I trust that they will continue to enrich public life in other ways.
With their work in mind, I wish that this Bill presented a more substantial legacy, but it is not entirely without substance. As the Secretary of State says, it provides a long-overdue framework for the demonstration of carbon capture and storage. Although we have lost ground to other countries, it is not too late for Britain to establish a leading position in this emerging global industry. If the Bill is passed, a Conservative Government would certainly not hesitate to use its provisions wherever that would be of help to the UK CCS industry.
The second main area of provision in the Bill concerns the role of Ofgem. Any clarification in that regard is welcome, because as things stand it is not clear who is responsible for what in UK energy policy. In particular, we have seen Ofgem take an increasingly high-profile role in shaping policy at the strategic level, especially through the Project Discovery exercise. It is, of course, better to have some part of the machinery of government taking a comprehensive view of our future energy needs than to have no part doing so, but that part ought to be in the Department, in support of Ministers who are democratically accountable to Parliament.
The third and final leg of the Bill deals with the introduction of schemes for the reduction of fuel poverty, including mandatory social price support. It is ironic that we should be legislating on this matter in the year that fuel poverty was due to be eliminated, according to some of the Government's targets: well, there we are. Some useful powers are included in this leg. The measures in the Bill to protect the most vulnerable customers are welcome as a last line of defence, but they do not
constitute the cost minimisation strategy that should underpin energy policy. We would have liked the Bill to contain more on energy efficiency.
In our view, energy policy should have four main objectives: security, sustainability, economy and opportunity. Achieving all four will require an approach to policy that is both timely and comprehensive. The Bill is not timely but overdue, and it is not comprehensive but partial-yet every journey begins with a single step. This Bill takes more than a single step in the right direction. That is why, as it proceeds to another place, it does so with our support.
6.45 pm
Simon Hughes: May I join the Secretary of State and his Conservative opposite number in paying tribute to all those who have carried out this bit of work with mutual respect and courtesy in a businesslike way? Everyone who has participated has done so in that spirit. I thank the Ministers who led the Bill through Committee for their engagement with the issues. They did not always deliver what we wanted, but they were willing to answer questions. On one subject, they did not even deliver the document we wanted-the Government's policy on how all homes might be warm homes-although at least they promised that it was somewhere and would be seen one day. We will still be waiting.
I join the hon. Member for Tunbridge Wells (Greg Clark) in paying tribute to those colleagues who are not on the Front Benches. I pay tribute to them all in general, but want to single out two. Like the hon. Gentleman, I pay tribute to the hon. Member for Nottingham, South (Alan Simpson). He is not with us at this second, but throughout his career he has been unqualifiedly unrelenting in arguing methodically and effectively on these issues. We will miss him hugely in these debates. I am sad that he has decided to step down. I also pay special tribute to my hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis), who served with me in Committee, as well as to my hon. Friend the Member for Cheltenham (Martin Horwood), who has supported me and performed today- [ Interruption. ] And he has just come back.
May I add one other name to those to whom I pay tribute? On Second Reading, David Taylor was with us and he participated in the debate. He took a great interest in this area of policy. I have not yet paid tribute to him but, on my behalf and that of my colleagues, may I add to the tributes that have been paid to him? Through his family, I want to say thank you for the efforts and contribution he made.
In summary, this Bill takes some good small steps in the right direction. Although it is clearly too little and too late, the steps are welcome. It is better that we go down the road of trying to have carbon capture and storage to deal with our coal industry in the future, although it is to be regretted that we missed by just nine votes taking the opportunity to add emissions performance standards. I hope that the House of Lords gets the Bill soon enough to be able to remedy that. In the House of Lords, of course, the Government do not have a majority.
I am pleased that the Government saw the need, at last, after much pressure, to put on a statutory rather than a voluntary footing for the energy companies
measures to try to reduce what is colloquially called fuel poverty. It is sad that in this country so many people still pay more than 10p in the pound or £10 in £100-the definition of fuel poverty-for their fuel bills. It is sad that the target for the most vulnerable has not been met, that the number in that level of financial difficulty has gone up, and that the targets set for 2015 will not be met. I hope that the Bill will have reminded everybody to increase their efforts to deal with that problem and I regret that we were unable to win the argument to obtain a commitment to a policy that would make every home in this country a warm home over 10 years from the end of the current schemes in 2012. My colleagues and I will continue to argue for that.
The greatest regret-although the Opposition parties' one success occurred in the same area-is that we did not manage to beef up the powers and effectiveness of the regulator. We achieved one success, in that the Minister of State was kind enough to recognise our request in Committee to require the energy companies to change the rules about pricing so that they must tell consumers in advance of any changes. The Government accepted that request and today we have amended the Bill to put that mechanism in it. That is welcome.
It is frustrating that other things that we think would have helped hugely to even out the balance between consumer and energy company-allowing easy comparison between tariffs, limiting the number of tariffs, stopping the veto power of the energy companies and showing, to expose the issue, how much profit the energy companies make from the individual consumer-have not been adopted. We will return to those issues.
The Bill was published on 19 November. It has taken three months to get it through the House even though there was willingness on both sides to make progress. It had its Second Reading on 7 December and left Committee on 21 January-more than a month ago. I sincerely hope that the Government will not be as dilatory in taking the Bill to the Lords and giving them the opportunity to improve it. We all understand the pressures of the last Session of a Parliament, but if the Government are serious about energy policy as a priority, we expect that to be reflected in the House of Lords.
Let me end on this point. Two of the three great future challenges for our country are climate security and energy security. The third is economic security-by definition, they come together. Unless we remain absolutely clear, as Front Benchers have, that the threat to the planet from climate change caused by human activities is so serious that we need always to take precautionary action, a much more serious position will face the next Parliament, the next Government-whoever they are-and the Governments after them. Front Benchers have a duty to stand together on this issue, and our friends on the Conservative Benches must be tough with their colleagues who do not appear to understand the urgency of these matters.
The Government, to their credit, understand the urgency. They came to the issue late, but they now understand where we need to go. I hope that people will understand in future that we need not just to legislate effectively and in advance of issues on the energy agenda, but to have policies that will change the use, abuse and waste of energy in this country so that we conserve it
better and become far more efficient, as well as policies that will move us to renewables as fast as possible. I hope that, if that happens, energy policy will not be so controversial and that the risks to society will not be so great in the years ahead.
6.52 pm
Mr. William Cash (Stone) (Con): I have listened to the hon. Member for North Southwark and Bermondsey (Simon Hughes), but I must say that he seems not to have taken account of the genuine concerns about some of the assumptions that have been made about climate change. However, I shall not elaborate on that as there is no need to do so now.
I have taken an active interest in the whole energy question, and I agree with the hon. Gentleman on one point: energy security lies at the heart of our economic security. I commend everyone in the House for their realism on that point. However, I do not believe that wind farms, particularly onshore wind farms, are the right way in which to achieve part of that energy security. That applies particularly in environments such as my constituency where, to put it bluntly, they are totally unjustified.
I acknowledge that there should be an energy mix and that offshore wind farms have some merit. I suspect from my previous exchanges with the Secretary of State that he agrees with me about carbon capture, about which I have campaigned for as long as I can remember. I believe profoundly in British coal, which should be part of our energy security and part of our foreign policy, and I applaud those who are in favour of it, including those in Government circles. If we can develop proper carbon capture methods and get things right, we will be able to supplement the energy security that we really need. Those of us who are rather more sceptical, to say the least, about climate change as a whole will none the less acknowledge certain changes. It has been pretty cold recently, as I am sure people will acknowledge. There are important issues in the mix; carbon capture is definitely a plus, and wind farms are definitely a minus.
6.54 pm
Mr. David Heath (Somerton and Frome) (LD): I want to make a small contribution to Third Reading. First, I welcome the Bill. The Government are to be applauded for the steps that they are taking in it, as carbon capture and storage is a crucial area. I applaud the fact that they are pushing ahead with this agenda in this country, and I know from my personal involvement that they are also actively arguing the case in other countries, in particular the US. The UK is showing a crucial bit of evangelical zeal in persuading others that we need to embrace this technology as part of the mix.
I also welcome the measures on fuel poverty. I will not rehearse the arguments contained in my ill-fated Bill of last Session, other than to say that I wish that the Government had embraced it. However, these measures are, once again, a step in the right direction, and I am pleased that at least some requirements are being put on the energy supply companies.
If I may say so, however, the Bill contains a big lacuna with regard to the fuel oil and liquefied petroleum gas used by people who live in rural areas such as the one that I represent. The continuing problem
is that the people who can least afford it have to pay the most for the most expensive fuel, and we need to address that.
My final point has been touched on by others. This Bill is part of getting the whole mix right, especially in the encouragement that it gives to all forms of renewable forms of energy, but there are still inconsistencies in the Government's approach. I was a strong supporter of feed-in tariffs: I believe that it was right to introduce them and I am pleased that the Government finally adopted them, but I want to say a word on behalf of one small group of people engaged in renewable energy generation in my constituency. They use micro hydro to generate electricity and power. They often bring historic buildings back into use, but they are faced with a feed-in tariff system that involves a microgeneration certificate scheme that is wholly impractical and which in fact acts as a deterrent. Only this week, I had a message from one of them to say that they get 12p per kWh at the moment but that, as a result of the feed-in tariff, they will get only 9p.
I honestly do not think that reducing income by 25 per cent. is a good way to encourage people down a path that we want them to take. I would very much welcome an opportunity to see a Minister about that in the near future, if at all possible. I would like to bring along a group of the people engaged in micro hydro, so that the Government can understand their problem and make sure that their arguments are understood.
Edward Miliband indicated assent.
Mr. Heath: I see the Secretary of State nodding, and I am most grateful for his assertion that he would be willing to see a delegation from my constituency. I shall make immediate arrangements so that we can put that meeting in place before the election. That was the major point that I wanted to make. Having secured that agreement, I think it entirely proper that I sit down.
Bill accordingly read the Third time and passed.
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