Thursday Volume 523 10 February 2011 No. 116 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Thursday 10 February 2011 £5·00 © Parliamentary Copyright House of Commons 2011 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 455 10 FEBRUARY 2011 456 That is precisely why we asked the Office of Fair Trading House of Commons to look at the heating oil market. We want to be absolutely assured that there is no exploitation and that Thursday 10 February 2011 the market is open and fair, which in the long run is the best guarantee. But we are also concerned about these The House met at half-past Ten o’clock off-gas-grid homes, and in the longer term we want to ensure that they have the best benefits from the green deal. PRAYERS Stuart Andrew: Back in December, Age UK expressed [MR SPEAKER in the Chair] concern about the rise in heating fuel cost. What response has my right hon. Friend had to his announcement on the investigation into the heating oil and liquefied petroleum Oral Answers to Questions gas market? Chris Huhne: There has been cross-party support for the investigation and we await the outcome with interest. ENERGY AND CLIMATE CHANGE There is a genuine concern throughout the House that we need to be confident that people in this position can The Secretary of State was asked— secure the best possible deal in the marketplace. Oil Prices Henry Smith: Tomorrow is suggested as national fuel poverty awareness day. What steps are the Government 1. Alun Cairns (Vale of Glamorgan) (Con): What taking to ensure that people have access to better steps he is taking to mitigate the effects of high oil environmental enhancements, particularly to their homes, prices on energy consumers. [39408] for the sake of the environment and the economy? 7. Stuart Andrew (Pudsey) (Con): What steps he is taking to mitigate the effects of high oil prices on Chris Huhne: The key part of the green deal, which is the centrepiece of the Energy Bill making its way through energy consumers. [39414] the Lords at the moment and shortly to come here, is an 12. Henry Smith (Crawley) (Con): What steps he is emphasis on being able to tackle fuel poverty. If we get taking to mitigate the effects of high oil prices on to the roots of fuel poverty, which is often not low energy consumers. [39420] income per se, but people relying immensely on energy because they have poorly insulated homes, we can tackle 13. Nadhim Zahawi (Stratford-on-Avon) (Con): What the problem at its core, rather than merely stick on steps he is taking to mitigate the effects of high oil plasters. prices on energy consumers. [39421] Nadhim Zahawi: The renewable heat incentive is one The Secretary of State for Energy and Climate Change way to mitigate this. My constituents, who are early (Chris Huhne): Oil is an internationally traded commodity adopters of ground-source heat pumps and other renewable with prices derived from the global market and, as such, sources, are disappointed that it appears they will not the Government cannot control fuel prices. Within the be able to access the RHI as they will not have installed UK, we have an open market for oil, which we believe their equipment before the launch of the incentive. Will provides the best long-term guarantee of competitive the Secretary of State therefore please clarify the position prices for the consumer. We are encouraging more on RHI in relation to individuals who have not installed energy-efficient cars and homes, and we have asked the equipment before the initiative is launched, as it appears Office of Fair Trading to report on the heating oil that not only is the current uncertainty about new market. Internationally we are working to improve the installations confusing constituents, but it is affecting functioning of the global oil market, and we are reinforcing the renewables industry? the work of the international energy forum, especially by increasing transparency. The key is speeding up the Chris Huhne: Obviously, we are trying to eliminate shift to the low-carbon economy by getting us off the uncertainty as rapidly as we can and trying to be as oil price hook. clear as possible about the policy framework. As can be seen from the announcement of the review of feed-in Alun Cairns: On 17 November, one of my constituents tariffs, it is important to get these policy details right. paid £490 for 1,000 litres of kerosene heating oil. By We cannot have a situation in which the budgeting is so 18 December, they were forced to pay £745 for 1,000 litres badly miscalculated that there simply will not be the of heating oil. Although fuel price is an issue for everyone money to support it. We are determined to go ahead across the UK, does the Secretary of State recognise the with this. Individuals will be supported under the renewable particular plight of people who live in rural areas and heat incentive and the details will be forthcoming. who do not have the option of mains gas and other sources of energy? Mr Speaker: May I ask the Secretary of State to face the House when speaking and not look behind him with Chris Huhne: My hon. Friend is absolutely right; this his back to the Chair? is a key issue in rural areas to which the ministerial team have given a lot of attention. The Energy Minister, my Albert Owen (Ynys Môn) (Lab): The Secretary of hon. Friend the Member for Wealden (Charles Hendry), State mentioned that the Office of Fair Trading was has suffered the effects of this in his own home and feels looking at off-grid gas customers who have been ripped strongly, as we all do, that we need to get a grip on this. off in the way the hon. Member for Vale of Glamorgan 457 Oral Answers10 FEBRUARY 2011 Oral Answers 458 (Alun Cairns) explained. Will the Secretary of State the OFT to look at the heating oil market and why consider extending the scope of Ofgem to look at both procedures are under way to investigate doorstep selling. on-grid and off-grid energy supplies so that there is a In all markets we must be ever-vigilant, which is precisely level playing field? The OFT takes an awfully long time what the Government have been. We have put the and looks only at competition, whereas Ofgem has a consumer’s interests first. wider responsibility. Chris Huhne: Ofgem of course keeps the market Oil Prices (Supply) under review and is looking at it at the moment, and there would be a possibility of referral if it decided that that was appropriate. Clearly, it is crucial that we have 2. Nick de Bois (Enfield North) (Con): What assessment competitive markets, because that is the best guarantee he has made of the likely effects on oil prices and supply that consumers will get the best possible deal. of the political situation in Egypt. [39409] Mr Chuka Umunna (Streatham) (Lab): It has been 11. Nigel Mills (Amber Valley) (Con): What assessment mentioned that these issues affect those living in rural he has made of the likely effects on oil prices and supply areas, but of course they also hit people living in urban of the political situation in Egypt. [39419] areas. One in five homes are now affected by fuel poverty, which is the highest rate in 15 years. Will the The Secretary of State for Energy and Climate Change Secretary of State tell us how the various other measures (Chris Huhne): Egypt accounts for 2.1% of the world’s that the Government have introduced, such as the housing oil production. We do not expect that disruption to benefit changes and the VAT rise, will help those living Egyptian oil production and oil transiting the Suez in urban areas such as my constituency to deal with canal is likely. The secretary-general of OPEC and the high and rising energy prices? Saudi oil Minister Ali al-Naimi have both stated that, in the event of disruption to the Suez canal, OPEC would Chris Huhne: The hon. Gentleman will be aware that increase production to provide market-calming measures. we have announced the Warm Homes discount, which About 5% of overall crude and petroleum products will ensure, through legislation, that the particularly goes through the Suez canal. high fuel bills suffered by those in fuel poverty are tackled, which is a considerable advance on the voluntary arrangements that we have had until now. I come back Nick de Bois: I thank the Secretary of State for that to the point I made in response to my hon. Friend the answer. Will he outline what measures his Department Member for Crawley (Henry Smith), which is that we may be planning to affect price stability? must tackle the roots of the problem. The energy bills of people on low incomes can vary by a factor of six. If Chris Huhne: My hon. Friend may be referring to the they are lucky enough to be in decent home standard debate that has been going on about the fuel duty social housing, they will have low energy bills, but if stabiliser, but that of course is the responsibility of the they are in private rented housing they may have very Treasury and the Chancellor of the Exchequer.