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Prepayment Meters
12. Sir Nicholas Winterton (Macclesfield) (Con): What recent progress he has made on phasing out domestic energy prepayment meters. [318551]
The Parliamentary Under-Secretary of State for Energy and Climate Change (Mr. David Kidney): Prepayment meters play an important role in helping some customers to control their energy expenditure and should remain an option for consumers. Smart meters will in due course replace current prepayment meters and we are committed to rolling out smart meters to all households. Meanwhile, the replacement of the older-style token prepayment meters was due to be nearly completed by the end of 2009. I await an update on the present position from Ofgem.
Sir Nicholas Winterton: There is a lot of concern about energy prepayment meters because they are used mainly by those on lower incomes. Is it right that such people should pay more for their gas than those who are better off? When will prepayment meters be entirely phased out? Phasing them out would be a good thing, and that idea is warmly supported by Labour Members.
Mr. Kidney: For the reasons that I have given, I do not, regretfully, agree with the hon. Gentleman about the presence and use of prepayment meters, but they will all be gone when we have smart meters by the end of 2020. In the mean time, one of the Ofgem licence conditions that I mentioned earlier was to rule out any unfair discrimination against users of prepayment meters. As a result, the differential between prepayment meter and standard credit rates has effectively been eliminated.
Rosie Cooper (West Lancashire) (Lab): Does my hon. Friend agree that, while we wait for smart meters, it is right that the Government should intervene to prevent the most vulnerable people from being ripped off for having to use prepayment meters?
Mr. Kidney: Yes; we called on Ofgem to carry out that probe, we supported the licence conditions that it proposed and I am pleased that they have been implemented.
Gas Storage
14. Mr. David Jones (Clwyd, West) (Con): How much additional gas storage capacity he expects to become available in the UK by 2012. [318553]
The Secretary of State for Energy and Climate Change (Edward Miliband): I refer the hon. Gentleman to the reply that I gave to the right hon. Member for Bracknell (Mr. Mackay) some moments ago.
Mr. Jones: I am obliged to the Secretary of State, but may I refer him to the answer that he gave to the hon. Member for Carmarthen, West and South Pembrokeshire (Nick Ainger) regarding developments under the sea bed? Clearly, the Crown Estate holds the key to future developments under the sea bed, but the gas storage operators group accuses it of behaving it as a monopoly. What influence can the Secretary of State bring to bear on the Crown Estate to ensure that it behaves in a commercial manner?
Edward Miliband: It is fair to say that negotiations between the Crown Estate and gas storage operators are commercial negotiations, but we engage with that and we are in discussions with the Crown Estate. They make their own decisions about tariffs and fees, but we are due to talk to them about that. We can also help by making tax changes. For example, the tax change that we made in relation to cushion gas has helped to make storage more viable.
Boiler Scrappage Scheme
15. Mr. Philip Dunne (Ludlow) (Con): What assessment he has made of the effectiveness of the boiler scrappage scheme against its objectives. [318554]
The Minister of State, Department of Energy and Climate Change (Joan Ruddock): The boiler scrappage scheme commenced on 5 January this year and is proving to be highly successful. It has, to date, received more than 95,000 applications. The scheme contributes to DECC's objectives to reduce greenhouse gas emissions in the UK through reduced energy consumption and to ensure that the UK benefits from the business and employment opportunities of a low-carbon future. We estimate that the scheme will reduce CO2 emissions by between 1.1 million and 1.4 million tonnes a year.
Mr. Dunne: I am grateful to the Minister for that answer. I am not surprised, and I am encouraged to hear about the take-up, but is she aware that, when condensing boilers are retrofitted, the water run-off pipe is often fitted on the outside of a building? When those pipes freeze, as is happening in the current freezing conditions, the boilers break, with the result that households have no heat or hot water. What are the Government doing to stop that happening?
Joan Ruddock: From what the hon. Gentleman has said, perhaps Ministers ought to be taking a course in plumbing, although I must tell him that I have no plans to do so. I have a condensing boiler myself, and my external run-off pipe has not frozen, but he may be correct about this being something that we need to look into. However, I hope that he will not want to detract in any way from the great success of the boiler scrappage scheme and the huge savings in CO2 emissions-and therefore the good effects on climate change-that it is achieving.
Climate Change Research
16. Lynne Jones (Birmingham, Selly Oak) (Lab): What recent research he has (a) commissioned and (b) evaluated into the scientific case for man-made climate change; and if he will make a statement. [318555]
The Minister of State, Department of Energy and Climate Change (Joan Ruddock): Last year, DECC and the Department for Environment, Food and Rural Affairs launched the AVOID research programme on avoiding dangerous climate change which assessed the scientific research published since the Intergovernmental Panel on Climate Change's fourth assessment report. The findings informed the UK delegation ahead of Copenhagen. The integrated climate programme at the Met Office Hadley centre is also providing new climate science research and expert advice on the findings of that research.
Lynne Jones: I thank my hon. Friend for that answer. In this country, there has been a broad consensus that the risk of dangerous climate change is real. It is based on broad and deep scientific evidence, with acknowledged uncertainties, that we cannot go on pumping billions of tonnes of greenhouse gases into the atmosphere without serious adverse effects. Does she agree that, if we are to continue to take the right decisions for the long term, it is important that that political consensus is maintained, and that we should not be distracted by the noise being made by those who claim that climate change is not a serious risk?
Joan Ruddock: I agree absolutely with my hon. Friend. We have seen nothing that undermines the main body of climate research, which goes back many decades and has involved some of the best scientists in the world. Although it is clear that there have been some errors and possible misjudgments, we know that CO2 emissions in the atmosphere are growing at an unprecedented rate. We have every reason to accept that that is the result of human activities. I am pleased that the consensus that it is human activities that are leading to the excessive warming that we see, and to the other climatic effects that we associate with climate change, holds across this House.
Oil Refining
17. Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): What recent discussions he has had with the petroleum industry on capacity reductions in the oil refining sector. [318557]
The Parliamentary Under-Secretary of State for Energy and Climate Change (Mr. David Kidney): The UK operates a market-based approach to the supply of refined products, and it is therefore a matter for individual companies to determine how best to meet their customer demand and what level of refining capacity is needed to do that. However, my Department has an ongoing dialogue with the UK downstream oil sector, including the oil refining industry as represented by the UK Petroleum Industry Association. As part of that dialogue, we recently commissioned and published a report by respected independent consultants on the UK downstream oil infrastructure.
Mr. Crabb: I thank the Minister for that reply, and for making time before Christmas to meet me to discuss this issue. However, is he aware of the enormous concern among UK refiners about the renewable heat incentive? They believe that it will load them with an additional cost burden and place them at a severe competitive disadvantage, which will only raise and heighten fears about potential plant closures and enormous job losses as a result.
Mr. Kidney: Yes, I am aware of the concern that the hon. Gentleman refers to, and I met members of the PIA this week to discuss that and other issues. The Government are listening to their point of view, and we have responded to their representations already. I know that the Treasury has certainly got in mind their point of view as it works toward this year's Budget.
Andrew Miller (Ellesmere Port and Neston) (Lab): My hon. Friend will be aware of the sale of Grangemouth, and that Stanlow in my constituency is up for sale. Will he ensure that the Department keeps a close eye on the broader public interest and, specifically, that it helps at a local level to ensure that the work force are properly protected in such circumstances?
Mr. Kidney: I am grateful to my hon. Friend. There have been a number of reviews by participants in that market in recent years, and I agree that it is important that all members of the industry are engaged in such reviews, including the work force and their trade union representatives.
University of East Anglia Climatic Research Unit
19. Mr. Andrew Pelling (Croydon, Central) (Ind): Whether he has had recent discussions with representatives of the university of East Anglia on the work of its climatic research unit. [318560]
The Minister of State, Department of Energy and Climate Change (Joan Ruddock): The Secretary of State has not had any recent discussions with representatives of the university of East Anglia on the work of its climate research unit.
Mr. Pelling: Does the Minister not agree, though, that it would be useful to have such conversations with that climate change unit in order to argue that, for the sake of belief and faith in climate change, those figures should be credible? Do you think that we should ask the university to conduct an independent inquiry, or, if it is unable to do so, that the Government themselves should initiate an independent inquiry?
Mr. Speaker: Naturally, I do not think anything on these matters, but I am sure that the Minister does.
Joan Ruddock: Indeed, I do, Mr. Speaker. I do not think it appropriate for us to be in discussion with the university of East Anglia. It has announced that an independent review, chaired by Sir Muir Russell, will look into the data and the e-mail hacking incident. It will report later in the spring, and those findings will of course be made public. That is appropriate.
On our belief in the science, I have already said in answer to my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones) that the Government remain absolutely convinced. We believe that the data worldwide are robust, and we have no reason to question them. However, it is appropriate that the East Anglian incident be investigated thoroughly.
Topical Questions
T1. [318565] Sir Nicholas Winterton (Macclesfield) (Con): If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Edward Miliband): My Department works with others to ensure that Britain can take the lead in low-carbon manufacturing. Today we are announcing a new research and development facility for offshore wind blade testing in Blyth, following Government investment of £18.5 million. We also welcome Mitsubishi's announcement that it will locate its offshore research and development facility in the UK, creating 200 skilled jobs, following last week's announcement by Clipper Windpower about its factory in the north-east.
Sir Nicholas Winterton: I obviously thank the Secretary of State for that detailed response, but it will not have anything to do with my question.
A 92-year-old, partially sighted, disabled constituent has written to me on the advice of Age Concern about her serious problems over two years with the Warm Front team, which installed a condenser boiler. The problem to which my hon. Friend the Member for Ludlow (Mr. Dunne) referred but did not receive a sensible reply has caused a total breakdown of the boiler. Warm Front can do nothing about it, and my constituent has had to spend more than £200 herself on a private contractor to provide her with heat. Will the Government do something about it, and will the Secretary of State look into Warm Front's ineffective and inefficient operations?
Edward Miliband:
The hon. Gentleman raises a serious question about his constituent, and I assure him that if he passes the details to us my hon. Friend the Under-Secretary will look into it urgently and talk to Warm Front about sorting out the problem. When the Department
came into being, there were a number of complaints about Warm Front, and we took a whole series of actions to improve the value for money and operation of the scheme. I think that they are having an effect, but when things go wrong, we want to take action as quickly as possible, working with Warm Front, and we will do so in that case.
Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): My hon. Friend will be aware that there have been 592,000 chronic obstructive pulmonary disease claims and 170,000 vibration white finger claims. In other words, 750,000 claims have gone through his Department, so a great deal of experience in them will have been gained. Will he ensure that in future, if there is a potential liability relating to a prescribed disease in the mining industry, it will be dealt with by a scheme, rather than by the courts at an enormous cost?
The Parliamentary Under-Secretary of State for Energy and Climate Change (Mr. David Kidney): Yes, I acknowledge the huge scale of the two compensation schemes that my hon. Friend mentions, and more than £4 billion of taxpayers' money has been paid out in compensation to miners who have suffered some horrendous injuries. I think that my hon. Friend alludes predominantly to the knee injury litigation that is ongoing, and I assure him that we have attempted to learn all the lessons of those earlier schemes in order to ensure that, if liability is established, we act in the way that he asks me to do. In the meantime, I credit my hon. Friend and others who have made representations to the Government about that knee condition for a new industrial injury benefit, which is now in place.
Mr. Alistair Carmichael (Orkney and Shetland) (LD): The recently announced feed-in tariff creates a two-tier structure for small generators that feed into the grid, leaving those who were prepared to take the initiative in the early stages, at their own financial risk, much worse off. How do the Government justify that unfairness?
The Minister of State, Department of Energy and Climate Change (Joan Ruddock): I have sympathy with the point that the hon. Gentleman has raised. However, he needs to bear in mind the fact that all the schemes impact on everyone, and we all have to make a contribution if the issue is to be addressed. The whole point of setting the feed-in tariff now is to enable the generation of more renewable energy, and that is why it requires the best possible incentive. Those who have already taken the initiative on their own account will not be producing more generation, and the Government's aim has to be to get more in place and to create the incentive to make that happen. If we were to equalise the payment, that would not create more generation or more CO2 savings.
Mr. Jim McGovern (Dundee, West) (Lab): In my home town of Dundee, tens of thousands of people have claimed the cold weather payment over the past year. I hope that the Minister agrees that there is still much to be done. Does he also agree that without the cold weather payment and the winter fuel allowance, many of the most vulnerable in our society would have to endure the unacceptable face of fuel poverty?
Mr. Kidney: I am grateful to my hon. Friend. That is part of our strategy of addressing the problem of people's incomes and ability to pay energy bills. He is right that even during this toughest of times and the recession that we have been through, a Labour Chancellor has maintained the higher amounts of both the winter fuel allowance and the cold weather payment this year, because he understands that that is the right thing to do for the vulnerable people involved.
T2. [318566] Andrew Selous (South-West Bedfordshire) (Con): Ofgem's latest figures show that prepayment meter customers, who are often from the poorest households, are still paying up to £60 a year more for their electricity and up to £107 a year more for their gas. Given the profits being made by the energy companies, will the Secretary of State ask them to eliminate that differential completely?
Mr. Kidney: We have eradicated the differential between prepayment meters and the standard credit, so the hon. Gentleman has now moved on to the differential between the prepayment meter and direct debit. At present, the licence condition is that a cost differential is permissible to reflect simply the extra cost of providing the means of payment. According to Ofgem, a prepayment meter costs about £88 a year more to administer than a direct debit. That would be the difficulty for me in acceding to the hon. Gentleman's latest request.
Mr. Denis MacShane (Rotherham) (Lab): On steel and energy, will the Secretary of State support the view of the Community union that the carbon credits for Tata's Teesside plant should be held in trust until the company agrees to talk with the Government and the union on resuming work there? Will he also meet me and colleagues to look at an over-rigorous interpretation of an EU regulation that might seriously damage electric arc furnace steel making in the UK?
Edward Miliband: I am sure that we can arrange a meeting with my right hon. Friend on the second question that he raised. On his first question, I should say that the Teesside issue is important. My right hon. Friend Lord Mandelson continues to be in discussions about the serious matter of what can be done at the plant. We will continue to take those discussions forward.
T3. [318567] Mr. David Evennett (Bexleyheath and Crayford) (Con): The disparity between wholesale and retail energy prices is woefully lacking in transparency. Even Consumer Focus, the Government's own watchdog, has said that households could be paying as much as £74 a year too much. The Government seem to have dithered over the issue. Will Ministers follow our advice and take some decisive action by referring the matter to an independent inquiry?
Edward Miliband: As I have said before in the House, I am not in favour of referring these matters to the Competition Commission if we can avoid it, because that will tie the whole energy industry up in knots. What is our strategy as a Government? It is to give the regulators more power, as we are doing in the Energy Bill; to eliminate some of the worst unfairnesses-in respect of prepayment meters, for example; and, rightly, to say to companies that they have a responsibility not only to their shareholders but to customers. We are doing all those things.
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