- Quote
- I beg to move, That leave be given to bring in a Bill to promote sustainable energy and energy efficiency; to make further provision in respect of the regulation of the gas and electricity industries; to provide Ofgem with new environmental and social duties; to make further provision about the role of local authorities in meeting the United Kingdom’s carbon reduction and fuel poverty targets; and for connected purposes. This debate takes place at an auspicious moment in Parliament’s history. It is the end of one era and the beginning of another. What connects the two eras are the serious challenges of fuel poverty and addressing climate change that will be inherited by the new Prime Minister and the framework of governance that he will bring with him. The truth is that we sit within a policy framework that is not fit for purpose, in terms of our ability to meet the targets that we have set ourselves. Let me give the House some of the benchmark figures that lead me to say that. First, last week I received a reply from the Minister for Housing and Planning, confirming that there are 2.2 million households in abjectly fuel-poor properties that have a standard assessment procedure rating—an energy efficiency rating—of less than 30. Department of Trade and Industry figures confirm that if there is a steady increase in energy prices, as is predicted, by 2016—the date by which we are legally supposed to have completely eradicated fuel poverty in the UK—there will be more than 3 million fuel-poor households in our country. We also know from the papers that have been produced in support of the Climate Change Bill that on current projections we will not meet our 2020 climate change commitments. We need a new framework—a step-change framework—that will allow us to address those points, and I have tried to incorporate such a framework in the Bill. It seeks to address four issues. First, it would give towns and cities a duty to produce their own sustainable energy plans that would meet or exceed the national targets. Secondly, it seeks to reform the role of Ofgem. Thirdly, it would introduce the concept of citizens’ allowances, for both electricity and gas, to underpin a shift in the tariff system framework. Those allowances would have to be delivered at the company’s lowest tariffs, and we would then move to a system of higher charging for increased energy consumption. Finally, my Bill seeks to give the Secretary of State the power to introduce feed-in tariff systems, which would have preferential payback frameworks that would give an entitlement to the citizens who provided that feed-in energy. I shall go through those four aims one by one. We know that by 2016 the Government hope to provide five new eco-towns that are carbon-neutral in their built design. By that time, however, Germany will have 40 to 60 eco-cities, made up of existing properties in which people are living now. That is the challenge for the UK, too. The building of 200,000 new houses a year is important, but the test is what we are going to do with the 25 million properties in which people are living today and in which, in all probability, they will live the majority of their lives. There is therefore a big step change from 200,000 properties a year to the 25 million with which we will have to deal in 10 years. If we are to get there, we must provide a different rules base for our energy system, which is why we must change Ofgem’s framework or terms of reference. I have spent the past four or five years going round all the major energy companies, asking them what plans they have over the next five years to sell less energy for consumption. Not a single company in the land has any plans to do so. When I ask why, they say that Ofgem requires them to enter into least price competition for the sale of energy, so they are locked into short-term contracts that are suicidal in the race towards a precipice of increased energy consumption that will accelerate the problems of climate change. That must be changed by giving Ofgem a different remit so that it has a duty, first, to promote reduced energy consumption and, secondly, to promote the development of an energy market for the sale of energy services, rather than the sale of energy consumption. It would be helpful, too, if we removed some of the constraints or confines within which energy companies are required to work. For energy companies themselves, part of the dilemma is the fact that they are locked into the 28-day rule. They are required by the Government to spend about £560 million a year as part of their energy efficiency contribution to alleviate fuel poverty and achieve carbon reduction targets, but they do not know how to do so within 28-day contracts. They want to get out of that lock. I suspect that citizens would say pretty much what every hon. Member would say when asked whether they would sign up to a 10-year contract with an energy supply company: “There’s not a cat in hell’s chance, because before the ink is dry, the company will double or treble the prices, so we would be hooked into a punitively priced contract for 10 years.” We must therefore move to energy services companies that are community owned or municipally owned, just as they are in large parts of Europe. By allowing those 10-year contracts between people and energy companies we can secure long-term partnership contracts that will allow the companies to spend their e-contributions in a much more productive and sustainable way. The most important aspect of the Bill is the Secretary of State’s powers to introduce feed-in tariffs. A couple of weeks ago, I brought Hermann Scheer to Parliament. In Germany, he is recognised as the father of feed-in tariff legislation. He is a German parliamentarian, and he was responsible for piloting a measure through the German Parliament in 2000. The German Secretary of State is empowered to set tariffs that can be put in place for 20 years and, for the same period, citizens are paid up to four times the market price for clean energy that they put back into the system. That has driven the transformation of the German energy sector, so that in the last year alone it delivered 97 million tonnes of carbon savings, which is 10 times what the UK aspires to but fails to deliver. That has delivered jobs and the lead in the incorporation of renewable technologies, and it has made a radical impact on the concentration of fuel poverty in Germany. That is the core of what I hope the Bill would deliver. The key features of the Bill are that it would move us into a different conceptual framework for what the next energy era will look like. The Bill is both visionary and practical. It is deliverable and economically viable. It is urgent, possibly more so than anything else in my lifetime. It creates jobs, as the Germans have done—about 240,000 jobs. It takes people out of fuel poverty and cuts carbon emissions like no other single measure has been able to do. It delivers a sense of community ownership of both the climate change agenda and the determination to eradicate fuel poverty. It was Victor Hugo who said that there was nothing more powerful than an idea whose time had come. I believe that the combination of the four elements in the Bill encapsulates that idea, and I hope the House will determine that its time has come too. Question put and agreed to. Bill ordered to be brought in by Alan Simpson, Mr. David Amess, Peter Bottomley, Malcolm Bruce, Mr. Dai Davies, Dr. Ian Gibson, Mrs. Sharon Hodgson, Dr. Brian Iddon, Mrs. Linda Riordan, Sir Robert Smith, Andrew Stunell and Mr. Mike Weir. Energy Markets (Carbon Reduction and Warm Homes) Alan Simpson accordingly presented a Bill to promote sustainable energy and energy efficiency; to make further provision in respect of the regulation of the gas and electricity industries; to provide Ofgem with new environmental and social duties; to make further provision about the role of local authorities in meeting the United Kingdom’s carbon reduction and fuel poverty targets; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on 19 October, and to be printed [Bill 131].
- Time
- 16:26
Alan Simpson (Nottingham, South) (Lab)Labour